Peloton hikes subscription fees by 13% in first-ever rate hike
Connected fitness company Peloton is hiking the monthly subscription fee users pay to access dozens of types of fitness classes — a first for the company. At the same time, it is cutting the price of equipment, including bikes and treadmills, in hopes that more consumers will buy its products.
The cost of a monthly membership is rising for the first time since 2014, and will jump from $39 to $44 in the United States starting June 1, reflecting a 13% price hike. In Canada, the fee will rise to $55 per month, up from $49, or a roughly 12% increase.
Peloton announced the pricing changes in a blog post Thursday, saying its hardware will also be cheaper because the company wants "more people to be able to afford" it. While the blog post didn't disclose the new prices for its exercise machines, CNBC reported the cost of Peloton's bike will drop to $1,445 from $1,745, while its Bike+ will decline to $1,995 from $2,495. The Tread machine will drop to $2,695 from $2,845, CNBC said.
Peloton justified the subscription price hike by highlighting the expanded content and features that membership now includes, compared to eight years ago when the company had only one piece of equipment — a bike — six instructors and fewer than 400 classes a month.
Today, Peloton manufactures two types of bikes as well as a treadmill. It offers 80 different class types and has 54 instructors who teach more than 1,000 classes a month.
"We've consistently added content, disciplines, music, instructors and new features, across three products: the Peloton Bike, Tread and Guide," the company said Thursday.
The drop in the price of equipment is intended to bring more people into the Peloton community.
"This is a strategic decision to play for scale and increase market share," the blog post read. "The pricing changes we are announcing today are part of our new CEO Barry McCarthy's vision to grow our community as we continue to deliver for our Members and shareholders as the leading global connected fitness platform."
Peloton's co-founder and former CEO John Foley stepped down in February, while the company announced it was axing 2,800 workers across its global operations.