Peloton’s Ongoing Death Spiral, Sizing up the Digital Fitness Opportunity
Hello everyone. We are getting to the last few CY2Q23 earnings reports. Today’s focus: Peloton. After going over the key numbers from the quarter, we look at the broader market opportunity found with digital fitness. Let’s jump right in.
Peloton’s Ongoing Death Spiral
For the past two years, we have been closely following Peloton’s implosion. Early red flags appeared in the company’s Form S-1 filing (IPO). Jump ahead two years and growth metrics began to deteriorate when the company should have been seeing explosive growth figures.
The Peloton story eventually shifted from being a possible Apple Fitness+ competitor to offering another look into the still young digital fitness space.
Back in May, Peloton unveiled a branding pivot to focus on accessibility (to appeal to more users). New membership tiers for digital fitness classes were also announced. Both came across as not fully thought out. Peloton moved away from its premium workout branding while not moving away from premium product pricing. The result is cognitive dissonance. As for the membership tiers, they are too confusing, limiting, and expensive.
Accordingly, it doesn’t come as a surprise that Peloton’s FY4Q23 earnings had every membership-related line item show continued deterioration.
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