Peloton announced in a press release today (via CNBC) that it plans to raise the cost of its all-access subscription for live and on-demand classes from $39 / month to $44 / month starting on June 1st, 2022. However, new, lower prices for Peloton’s exercise equipment are set to go into effect at 6PM ET today, according to CNBC — the Bike will cost $1,445 (including a $250 shipping fee) instead of $1,745, the Bike Plus will go for $1,995 instead of $2,495, while the Tread will drop to $2,695 (including a $350 shipping fee) from $2,845.
The change only applies to customers in the US and Canada and doesn’t affect the $12.99 / month app-only membership. As noted by CNBC, the subscription price in Canada will go from $49 CAD to $55 CAD, but there’s no word on how much the equipment will cost.
The lower equipment cost could help attract customers who may have been intimidated by the company’s steep price tags and gives Peloton the opportunity to gain more revenue from recurring subscriptions. This, in addition to the Bike rental program it’s testing, also helps Peloton slough off the excess inventory it gained from making too much equipment amid low demand.
“We want more people to be able to afford our hardware,” Peloton said in a press release. “There’s a cost to creating exceptional content and an engaging platform, and this price increase will help us continue to deliver for our Members.”
Peloton CEO Barry McCarthy, who previously served as a Spotify and Netflix executive, took over the helm at the company’s rockiest point in its history. He hinted at overhauling Peloton’s business earlier this year and said he wanted to find the “sweet spot” between equipment and subscription costs. This meant slashing the price of Peloton’s workout hardware while raising the prices of its subscription, potentially to “$70 or $80.” McCarthy hasn’t hiked up costs that much, but the modest price adjustments signal that he’s following through on his promise.
Update April 14th 1:10PM ET: Updated to clarify that the change won’t affect customers outside of the US and Canada and that it also won’t change the price of the app-only membership. Also added updated subscription prices in CAD.