Cheaper devices and more expensive subscription offers – the new management of the sporting goods supplier Peloton is screwing up the business model after high losses. The company’s exercise bikes and treadmills will be reduced in price in all markets, Peloton announced Thursday. For example, the cheapest Peloton bike in Germany now costs 1445 euros, 300 euros less than before. In the home market of the USA, customers should also pay 44 instead of the previous 39 dollars for networking with online training hours. The subscription prices abroad remain “currently” unchanged, while the range of content is being expanded.
Peloton was one of the big winners at the beginning of the corona pandemic – but greatly overestimated the growth prospects. Many customers of closed fitness studios brought the company’s comparatively expensive training bikes and treadmills home. But the boom abated when the corona restrictions were relaxed.
In November, the company had to cut its sales forecast for the fiscal year ending in mid-2022 by up to one billion US dollars. In February, Peloton then cut around a fifth of the jobs with 2800 jobs and stopped building a factory in the USA. Co-founder John Foley gave up the post of CEO. The company is now led by Barry McCarthy, who, as the former chief financial officer of Netflix and Spotify, is an expert on subscription models.
Accordingly, a focus on subscription revenues to earn money had already been expected. With the lower device prices, they want to expand the customer base and market share, Peloton explained. At the same time, the company risks angering early customers in the USA, who initially paid more for the hardware – and will also have to pay higher subscription prices in the future.
Peloton’s stock market value had fallen from a peak of $50 billion at the beginning of the pandemic to around $8 billion. And there hasn’t been any movement since the change of boss either, which caused criticism from the major shareholder Blackwells this week. (dpa)