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Dive Brief:
Ahead of the holiday season, athletics company Peloton has increased membership prices across all of its tiers, per a Wednesday press release. Effective in October, its All-Access Membership increases from $44 to $49.99, the App+ Membership jumps from $24 to $28.99 and its App One Membership rises from $12.99 to $15.99.
The news coincides with a revamp of Peloton’s entire product lineup to better accommodate cross training; that includes a 360-degree swivel screen for its higher-end machines, improved audio, quicker connectivity and more. The company also deployed an AI system called Peloton IQ across all connected fitness equipment new or old, which provides real-time workout feedback through camera tracking.
Additionally, the company launched a new line of commercial equipment called the Peloton Pro Series, per a separate announcement. The line comes out of Peloton’s newly formed Commercial Business Unit, with products designed for increased use with improved durability, motors and more.
Dive Insight:
Peloton says its new membership costs are meant to support its company-wide product and service enhancements.
“This is the start of a new chapter for Peloton,” Peloton CEO Peter Stern said. “We’re doubling the value of our hardware with the Cross Training Series by delivering world-class cardio and strength in a single machine. With Peloton IQ, we’re introducing a new level of intelligent personalization to become the ultimate partner in our Members’ wellness journeys. This is more than an upgrade; it’s a relaunch.”
Stern took on the CEO position in January in the midst of Peloton’s turnaround, leaving an executive role at Ford and bringing on previous experience at Apple. Peloton has tapped several other new executives for its C-suite since Stern began, including for its chief commercial officer, chief marketing officer and chief operating officer positions.
The relaunch’s increased pricing is not the first time Peloton has hiked costs for subscribers in recent years.
During a previous turnaround endeavor in 2022, Peloton increased prices on both its hardware and the monthly membership fees. Those changes occurred as the company also reduced its headcount and worked to handle shifting consumer behaviors during a wind down of the COVID-19 pandemic.
Reminiscent of that year, Peloton also announced in August that it would reduce its workforce further, by 6%. The move is part of a larger cost-cutting plan that aims to generate $100 million of run-rate savings by the end of fiscal year 2026.
In its fourth quarter, the company saw total revenue drop 6% year over year to $606.9 million and its member base declined about 6% to 6 million. However, it posted a $21.6 million net income, compared with a $30.5 million loss in the year prior.