Peloton is making a significant change to its membership pricing structure, introducing a tiered model that will feel familiar to anyone with a Netflix subscription.
Update – This article was published on April 1st and was an April Fools joke. As the disclaimer at the bottom stated – “Note that today is April 1st, and this article is an April Fools’ Joke (for now).”
Starting May 1st, the Peloton All-Access Membership (which is what anyone who owns a hardware device has) will increase from $49.99 to $54.99 per month. However, members who wish to stay at the current $49.99 price point will have that option – with a catch. Those who remain on the lower tier will see ads inserted into their classes several times per workout. Peloton is calling the two options “Peloton All-Access Premium” ($54.99/month, ad-free) and “Peloton All-Access Standard” ($49.99/month, with ads).
According to sources familiar with the plans, ads on the Standard tier will appear 2-3 times during a class, depending on the length, typically between song transitions or during recovery sections. A 30-second ad overlay will appear on the screen while the instructor continues teaching – though the instructor audio may be muted during the ad. Peloton says they are working to ensure the ad placements feel “natural and non-disruptive,” though it remains to be seen how members will feel about an election ad popping up during a Zone 5 effort.
A Peloton spokesperson shared that their internal research showed that in their previous advertisement tests, the lululemon look cam, members did not quit those class at a higher frequency than normal. Based on that, Peloton does not expect any negative sentiment based on these new ads either.
Peloton last raised their membership costs from $44 to $49.99 last fall, along with the announcement of the Cross Training series of hardware.
This is a reversal from CEO Peter Stern’s recent comments on the topic. Just a few weeks ago, we reported that Stern had said Peloton was not currently exploring advertising as a revenue stream. However, sources say the landscape shifted rapidly after activist investor Elliott Investment Management entered the picture.
According to multiple people briefed on the matter, representatives from Elliott took one of their Southwest planes to New York, arriving at Peloton’s headquarters with duffel bags of cash and a detailed list of operational demands. Among the stipulations: the immediate introduction of an ad-supported membership tier to boost revenue, a restructuring of the studio experience, and what one source described as “a general attitude of doing things differently around here.”
Elliott, of course, is the same activist investment firm that recently took a stake in Southwest Airlines and pushed through sweeping changes to the carrier’s decades-old open-seating policy in favor of assigned seats and premium cabin options. It appears they’re bringing a similar playbook to Peloton.
In what appears to be directly inspired by that Southwest overhaul, Peloton is also doing away with its current entry system that sees members granted entrance based on whether it’s their first time to the studio, someone with a milestone, or a repeat visit (and then first come first serve within those groups). Starting this summer, in-person classes at Peloton Studios New York and Peloton Studios London will shift to a “paid boarding group” model with three tiers:
- First Class ($75/class) – Priority entry, front-row guaranteed seating, and a post-class smoothie from the studio cafe.
- Studio Select ($45/class) – Early boarding with preferred bike/tread selection, but no front-row guarantee.
- General Boarding ($35/class) – Standard entry after First Class and Studio Select members have been seated. Remaining bikes/treads assigned at random.
Members in the General Boarding group will line up in the plaza area and board in numbered groups, which Peloton says will be determined by factors including Club Peloton tier status, lifetime class count, and “overall vibes.” A Peloton spokesperson clarified that the “vibes” metric is still being calibrated internally.
The changes are expected to go into effect in phases, with the ad-supported tier launching May 1st and the studio boarding group system rolling out over the summer.
Note that today is April 1st, and this article is an April Fool’s Joke (for now).
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All access members price was increased less than a year ago. And now this? If Peloton members collectively want to cancel their membership I would show solidarity and cancel my membership. This is embarrassing for Peloton. I always thought I would just keep paying the increases, but this is disgusting.
I will take a good hard look at Soul Cycle, The Ladder, BODi and more. Fly wheel where you at?
Peloton ya gonna get dropped. Don’t take your members for morons. You just took your crowns off.
It’s an April Fool’s joke Clearly you didn’t read the whole thing.
Now, and I probably shouldn’t say this (as I am an app user who does NOT own Peloton equipment (outside of the Guide)), but if I had bought hardware from Peloton and they effectively were giving me less for more ($49.99 + ads) I would be pissed.
They (Peloton) would be better to implement this on their lower cost tiers that aren’t machine dependent (e.g. someone like me who uses the app with my own rower, tread and bike which are not from Peloton) and make the barrier to entry lower there to drive subscriptions (and revenue).
This change to those who’ve bought wholeheartedly into the Peloton ecosystem is a slap in the face.