Peloton’s new subscriptions leave behind its pricey hardware
Peloton has been eager to remind everyone that it’s not just “that bike company.” To do that, the company announced today it’s launching three new app-only memberships to highlight its range of fitness content — no expensive Peloton machine required. It’s also revamping the app’s overall design, including Peloton Row workouts for the first time, and introducing Peloton Gym, a new type of strength training content that offers written workouts and video demos.
The three new memberships will vary in price and access to content. The Peloton App Free membership is, as the name suggests, free of charge. It will include access to 50 classes across 12 of Peloton’s 16 exercise types. The four types that won’t be included are Row, Row Bootcamp, Bike Bootcamp, and Tread Bootcamp. Classes, which exclude live content, will be rotated on a regular basis to keep things fresh. As for how often classes will be rotated, Peloton spokesperson Ben Boyd told The Verge that an update cadence has yet to be fully decided.
As for paid tiers, the Peloton App One membership will be the midrange option and keep the previous $12.99 monthly or $129 annual cost. This tier will give users access to thousands of on-demand classes in nine exercise types, including strength, meditation, outdoor walking, and yoga. The App One subscription also gets users access to three equipment-based classes per month (eg, treadmill, rowing, cycling) and will include live classes, challenges, programs, and collections. The premium tier will be dubbed Peloton App Plus and will cost $24 per month or $240 annually. The App Plus membership includes unlimited access to all classes, excluding Peloton’s Lanebreak and Scenic options, which are tied to the company’s hardware.
“If we did our job today, the marketing will introduce the company to someone who really doesn’t know us or thinks we’re a bike company. They can get all that stuff they’ve read about and download it for free in the app,” says Boyd. Users will not have to provide a credit card to get started on the free tier.
These options bring the total to five different subscriptions. The other two are tied to Peloton hardware. The All-Access Plan, which is required for Peloton bike, treadmill, and row owners, costs $44 per month and gets you access to everything Peloton has to offer. It’s also separate from the Guide Membership. That’s for owners of the Peloton Guide strength-training camera, costs $24 monthly, and, content-wise, is the same as the App Plus tier. The main difference between these two hardware-centric memberships is the Guide includes different metrics and integrations, such as rep counting.
As for existing Peloton app subscribers, Boyd says they’ll be automatically upgraded to App Plus membership without a change in price until December 5th, 2023. At that time, users will be able to choose whether they want to pay the increased price or move to a cheaper tier.
Boyd says the idea is to give users a wide variety of options, as well as the ability to adapt membership depending on the season. For example, summer is generally Peloton’s most challenging quarter, as it’s a time when many people leave the gym (and, therefore, their equipment) in favor of outdoor exercise. In that case, members have the option of upgrading to a more premium tier during winter and opting for free membership when the weather gets nicer.
Meanwhile, the company is also introducing a new feature called Peloton Gym, which is similar to what you’ll find in other strength training apps. Instead of following along with instructor-led strength classes, you’ll be to view written floor-based workouts accompanied by video demos for specific moves (ie, how to do a Bulgarian split squat.) The idea is to enable users to move through workouts at their own pace — and listen to their own music while they’re at it.
While the new tiers are rolling out starting today, don’t worry if you don’t see it just yet. Boyd says the update is currently rolling out to all five of Peloton’s global markets over the next few days.
Overall, the move is par for the course with CEO Barry McCarthy’s strategy to emphasize Peloton’s content as its “real” product over its hardware. Case in point, Peloton’s release notes that more than half of all classes taken on the app have nothing to do with cycling. Since taking the helm, McCarthy, who cut his teeth building up subscriptions for Netflix and Spotify, has introduced a number of new business models for the beleaguered connected fitness company. That includes a leasing model for Peloton’s bikes, plus the ability to buy through third-party retailers and purchase discounted, refurbished bikes. As for whether it pays off, we’ll have to see. While the company has made recent strides toward recovery, it’s still yet to regain profitability, with stock prices hovering around $7 compared to a pandemic-high of $162 in December 2020.