Peloton Makes Surprising Move to Combat Plummeting Share Prices
It’s been a rough year-plus for . The fitness company has struggled in the face of shipping delays and product-safety issues, and it recently made headlines after its laid-off employees crashed new CEO Barry McCarthy’s first all-hands meeting. Now with McCarthy at the helm and share prices continuing to fall, the company is reimagining its strategy — raising subscription rates for the first time ever and reducing equipment prices, CNBC reports.
In a previous interview with CNBC’s Jim Cramer, McCarthy, a former Netflix and Spotify executive, said cutting costs in key areas could go a long way towards establishing more recurring monthly revenue. “I think there’s enormous opportunity for us to flex the business model and dramatically increase the [total addressable market] for new members by lowering the cost of entry and playing around with the relationship between the monthly recurring revenue and the upfront revenue,” McCarthy said.
On June 1, the price of Peloton‘s all-access subscription price in the U.S. will go from $39 to $44 per month and from $49 to $59 a month in Canada. It will remain the same for international members, and for people who don’t own Peloton equipment, plans will still be $12.99 a month.
Yesterday, Peloton reduced the prices of its connected-fitness bikes and treadmills. The price of its Bike dropped from $1,745 to $1,445, including a $250 shipping and set-up fee; the Bike+ from $2,495 to $1,995; and the Tread machine from $2,845 to $2,695, including a $350 shipping and set-up fee.
The company is also experimenting with a rental option in select U.S. markets; users can pay a monthly fee between $60 to $100 to rent a Bike or Bike+ and access Peloton’s workout content library.
Peloton had 2.77 million connected-fitness subscribers as of Dec. 31 and boasts more than 6.6 million total members.
Peloton was down 4.63% today as of 11:36 a.m. ET.
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