Under new leadership, Peloton is hoping to attract new members with its new One Peloton Club bundled subscription. For one monthly fee, Peloton provides a subscribing household with a Peloton bike and access to the company’s complete library of live and on-demand classes. Members are essentially paying to rent a Peloton bike and get access to Peloton’s live and on-demand content. The new bundled subscription (bike + content) is a pilot program available in Florida, Minnesota, Texas and Colorado.
The fine print
There is a lot of tiny print though, available on Peloton’s Terms and Conditions page.
- The bundled subscription program is only available for the company’s original Peloton Bike.
- Members must live within 30 miles of one of the showrooms.
- In some markets, new members will be charged a one-time non-refundable delivery fee of $250.
- A credit card is required to join the program. This payment method will be used to charge a monthly program fee, beginning with the delivery of the bike.
- The monthly program fee, which is not explicitly stated, includes the cost of the Peloton All-Access Membership. All fees are outlined in the One Peloton Club Agreement, which doesn’t appear to be available online.
- Members of the One Peloton Club can cancel their membership at any time on the Peloton website. The agreement, however, continues on a monthly basis until a member cancels it or selects the buyout option.
- When canceling the membership, One Peloton Club members will lose access to Peloton content at the end of the monthly period in which they cancel. They have 30 days to schedule a time to have Peloton pick up the bike.
- Members can choose the buyout option if they want to purchase the Peloton bike. Pricing is available in the One Peloton Club Agreement. To retain access to content, members must still pay for their all-access membership until they cancel.
- Anyone who has signed up for a Peloton All Access Membership in the last 12 months or has started a a 30- or 100-day free trial is ineligible.
- There is more tiny print on separate pages for Peloton’s Terms of Service and Membership Terms.
Peloton does not share pricing on any of the One Peloton Club pages or the related terms and conditions pages. However, The Wall Street Journal reports that subscriptions run between $60 and $100 a month. By itself, a Peloton All Access membership is $39 a month. The original Peloton bike ranges in price from $1,495 to $2,035. The newer version, the Peloton Bike+, starts at $2,495.
The new bundled subscription is being launched about five weeks after the company announced a major corporate restructuring. Peloton CEO and co-founder John Foley resigned his position and will become executive chair of the board of directors. Barry McCarthy, previously in leadership roles at Spotify and Netflix, will serve as CEO and president, while the immediate past president, William Lynch, will leave his leadership role to serve as a non-executive director on the board. At the same time, the company announced they would cut 2,800 jobs worldwide, representing 20% of the company’s workforce.
“Peloton is at an important juncture, and we are taking decisive steps. Our focus is on building on the already amazing Peloton Member experience, while optimizing our organization to deliver profitable growth,” said Foley. “With today’s announcements, we are taking action to ensure Peloton capitalizes on the large, long-term Connected Fitness opportunity. This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline.”
Investors are not impressed with the new bundled subscription offer it seems. On February 9, when the restructuring and layoffs were announced, Peloton stock was valued at $38.77 per share. As of 6:03 p.m. Eastern yesterday, Peloton had dropped to $20.20 per share.
We have so many feelings about this. On the one hand, we appreciate the attempt to lower the barrier to entry for people who want to try Peloton. Previously, it has been too expensive for many to purchase a bike and pay for the all-access membership on top of it. We also like that the company is testing this idea before rolling it out on a larger scale.
On the other hand, will this really make Peloton “stickier” with members, and are they reaching their target audience with this new product? This subscription allows a member to rent a bike with no obligation. What happens if the bike is returned damaged? What happens if people quit after two months? Will Peloton get any ROI from a brief relationship with a new member? And what will the company do with returned bikes?
And, of course, the terms and conditions are in three different places, not including the One Peloton Club agreement which does not appear to be accessible online. This violates subscription best practices to make their terms and conditions clear and conspicuous. What are subscribers really signing up for? Where could this go wrong for Peloton? It feels like there are more questions than answers here.