Peloton recently announced that it will hike the cost of its all-access subscription for live and on-demand classes from $39 per month to $44 per month beginning on June 1, 2022.
Peloton users in the United States and Canada will be the only ones affected by the increase in Peloton subscription prices. Peleton stated that they are still in the process of expanding their library of content for their global audience, and with that, international membership pricing remains unchanged for the time being.
To attract more customers, Peloton is raising the monthly fee for its on-demand fitness content for the first time in the company's history, while also slashing the prices of its Bike, Bike+, and Tread machines under the leadership of CEO Barry McCarthy.
These are significant changes for Peloton with Barry McCarthy as the newest CEO, in charge of the company for a little more than two months. It comes at a time when Peloton is trying to get its stock price back up after a big drop recently.
Peloton Price Increase in Subscription
Peloton, after eight years of not raising the price of its membership, was the first to announce that it would be raising the price of its all-access membership in North America.
Over the past eight years, Peloton has spent a lot of money on improving the subscription experience.
Peloton is making major changes! This includes more affordable fitness equipment and an all-access membership price increase.
Its three products, the Peloton Bike, the Peloton Tread, and the Peloton Guide, have all seen consistent content, disciplines, music, instructors, and new features introduced.
As a result, their members are getting more value from their membership: the number of monthly workouts per all-access membership has more than tripled from 4.4 in October-December 2014 to 15.5 in October-December 2021.
According to TechCrunch, Peloton cited the cost associated with producing exceptional content and developing an engaging platform. According to the company, the price increase will allow them to continue to provide value to their members.
As a result, the company will raise the price of its monthly North America All-Access membership fee from $39 to $44 in the United States and from $49 to $55 in Canada, effective June 1, 2022.
Lowered Prices for Peloton Equipment
In addition, according to Peloton, besides the price increase for all-access membership, Peloton announced that they will counter the price increase by lowering the prices of the exercise equipment on their roster. The lowered price will include all of Peloton's Bikes and Treads in all markets.
Peloton stated that they would like to have more customers able to afford our hardware. And, this is a strategic decision made in order to gain market share and scale up operations.
According to CNBC, beginning Thursday at 6 p.m. ET, Peloton will start cutting prices for its fitness equipment.
- Peloton Bike price will be reduced from $1,745 to $1,445 effective immediately. Including a $250 shipping and setup fee.
- Peloton Tread machine will be available for $2,695, which is a reduction from the previous price of $2,845. The new Price also includes $350 is charged for shipping and setup fee
- Peloton Bike+ will be reduced in price from $2,495 to $1,995.
Read Also: Peloton Adds Apple Watch Integration for All Machines - Here's How It Works
Peloton CEO Deploys Changes
Changes in Peloton have been signaled for quite some time now. This comes after Peloton co-founder John Foley decided to step down from being the company's CEO for ten years and instead transitioned himself as the company's executive chair.
Barry McCarthy was asked to replace the CEO position. He is also known for being a former Netflix and Spotify executive. He assumed Peloton's CEO post last February.
McCarthy has been publicly vocal about where he wants the company to head, stating in previous interviews that he intends to reduce costs while also examining the size of its workforce and production levels in the near future.
He also revealed previously that cutting costs on Peloton equipment is a good opportunity. As it would lower the barrier to entry for a consumer, the company could pivot its focus to growing monthly recurring revenues, which is exactly what the public is seeing now.
Read Also: Peloton to Restructure? Company to Replace CEO, Cut Jobs, and Appoint New Board Members
