It's been a rough year-plus for Peloton. The fitness company has struggled in the face of shipping delays and product-safety issues, and it recently made headlines after its laid-off employees crashed new CEO Barry McCarthy's first all-hands meeting. Now with McCarthy at the helm and share prices continuing to fall, the company is reimagining its strategy — raising subscription rates for the first time ever and reducing equipment prices, CNBC reports.
In a previous interview with CNBC's Jim Cramer, McCarthy, a former Netflix and Spotify executive, said cutting costs in key areas could go a long way towards establishing more recurring monthly revenue. “I think there’s enormous opportunity for us to flex the business model and dramatically increase the [total addressable market] for new members by lowering the cost of entry and playing around with the relationship between the monthly recurring revenue and the upfront revenue,” McCarthy said.
Related: Peddling Up a Steep Hill: Peloton Cuts Thousands of Workers, Offers Them 1-Year Free Subscription
On June 1, Peloton's all-access subscription price in the U.S. will go from $39 to $44 per month and from $49 to $59 a month in Canada. It will remain the same for international members, and for people who don't own Peloton equipment, plans will still be $12.99 a month.
Yesterday, Peloton reduced the prices of its connected-fitness bikes and treadmills. The price of its Bike dropped from $1,745 to $1,445, including a $250 shipping and set-up fee; the Bike+ from $2,495 to $1,995; and the Tread machine from $2,845 to $2,695, including a $350 shipping and set-up fee.
Related: Reports Reveal 2 Huge Brands Are Thinking About Buying Peloton
The company is also experimenting with a rental option in select U.S. markets; users can pay a monthly fee between $60 to $100 to rent a Bike or Bike+ and access Peloton's workout content library.
Peloton had 2.77 million connected-fitness subscribers as of Dec. 31 and boasts more than 6.6 million total members.
Peloton was down 4.63% today as of 11:36 a.m. ET.
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