Peloton’s subscription test tries to rent his bike for less than $100 a month
Peloton CEO Barry McCarthy wasn’t shy about how he plans to get the struggling fitness company back on track. A few weeks ago, McCarthy both quashed sales rumors and dangled the idea of shaking up Peloton’s subscription models. Now Peloton says it will pilot a new subscription model called One Peloton Club in select states starting Friday.
Under the new model, customers will pay a one-time monthly fee of $60 to $100 that covers bike rental and course costs, depending on a the wall street journal report. If the customer decides to cancel, Peloton will take the bike back for free. The pilot will be available in Texas, Florida, Minnesota and Denver for a limited time. Customers will need to stop by a local showroom to register – this is not available online. You can see the addresses of these locations here. In some markets, Peloton will also charge a one-time delivery fee of $250.
“Peloton has created a limited pilot program in select US markets to explore various pricing models and options for new members,” Peloton spokeswoman Amelise Lane said. The edge in an email. “It aligns with Peloton’s belief that intuition drives testing and data drives decision-making as the company sets course for the next phase of its evolution and growth.”
Until now, users had to purchase the bike and pay a separate $39 monthly subscription. If a customer were to use financing, that would mean a monthly payment of $45. With the monthly subscription, that’s $84 per month until the bike is paid off. Under the new pilot, it is possible to pay less each month to have the bike at home. Previously, the cheapest option would have been Peloton’s digital-only subscription, which costs $12.99 per month. This rental does not reimburse your bike, but Peloton says that, like car leases, subscribers have the option of purchasing their bike with a “Buyout” price detailed in the club agreement.
This is not the only decision made by Peloton to attract new customers. Last week, Peloton extended its free at-home trial from 30 to 100 days for a limited time.
Whether the new pricing strategy pays off or not, it’s a clear sign that McCarthy is putting its stamp on things. McCarthy was previously the chief financial officer of Spotify and Netflix, and former CEO John Foley pointed to his experience with subscriptions as one of the main reasons McCarthy was hired. During last month’s second quarter results, it was also clear that Peloton was aware that it needed to shift from a hardware-focused strategy to one that puts its content front and center. McCarthy echoed that sentiment in a recent FinancialTimes maintenance.
That doesn’t mean Peloton is dropping hardware altogether from its overall business. The company is expected to launch its camera-based Peloton Guide weight system this year, and a connected rowing machine has also been rumored.