Bloomberg has published a brand new interview with Peloton CEO Barry McCarthy that contains a number of interesting developments regarding the rower timeline, Tread+, Bike self-assembly, and a “freemium” model for apps.
First, McCarthy is hopeful about the Peloton rower (Peloton Row) launching in time for the holiday season. This tracks with our latest reporting on a potential timeline of a sale launch date in September or October, with shipping occurring in October or November. The device is reportedly already out for beta testing, and Chief Supply Chain Officer Andrew Rendich recently stated in an interview with Bloomberg that they are on track for a 2022 release. Based on McCarthy being “hopeful” about the holidays it’s possible the original timeline has slipped slightly.
In addition, McCarthy reiterated his hope that Peloton will be able to relaunch the Tread+. As a reminder, the Tread+ – Peloton’s original Treadmill that launched in 2018 – has not been available to purchase for over a year due to a U.S. Consumer Product Safety Commission recall (CPSC). Peloton has not recently shared any news about the status of the Tread+, but McCarthy emailed a member earlier this summer stating that he was “hopeful” about its potential return. According to McCarthy’s latest interview with Bloomberg:
The Peloton CEO said he would like to reintroduce the company’s high-end Tread+ treadmill, which was recalled in 2021 after it was linked to injuries by children and one death. Any relaunch needs to be cleared by the government and that will require negotiation, McCarthy said.
Next, McCarthy shared that Peloton is actively working on a self-assembly option for the Bike. In other words, instead of having a professional delivery and set-up team that visits each customer’s house for installation, the customer would be able to receive the product via shipping and assemble it themselves. McCarthy told Bloomberg:
“We’ve been working on it for a while, and it’s a real thing,” he said. “We’ll continue to cost-reduce the hardware and we will engineer it so that you can assemble it, so that we can ship it via FedEx.”
We’ve previously reported that Peloton is exploring a self-assembly option for their rower, but this latest interview confirms that they are looking at self-assembly for their other devices as well. This follows last week’s news that Peloton will close warehouses and shift all deliveries to a third-party vendor, part of their ongoing effort to reduce costs.
Lastly, McCarthy explained that Peloton is exploring a “freemium” model for their digital app. This means that some features of the app would be completely free, while other features would remain behind a paywall:
Consumers can already use the company’s $12.99-a-month app on a range of devices, including smartphones, tablets and set-top boxes. The hope is that sharing Peloton content more widely will help bring its user base to 100 million.
Users could ultimately pair a smartphone or tablet over Bluetooth with a third-party bike or treadmill and beam that content to the equipment’s display, McCarthy said. That approach would be reminiscent of how Apple Inc. lets users show content from their iPhone on the screen in their car over CarPlay.
McCarthy took this opportunity to reaffirm his belief – that he has repeatedly stated since he became CEO – that Peloton’s success lies within its software, not its hardware:
“We’re making the bet that if you love our service as much as the rest of our users do, you’ll exhibit low monthly churn and have a high lifetime value,” McCarthy said. “We’ll recoup the investment we made in the hardware plus profit over time.”
This interview follows a very rough past few days of news for Peloton. They announced a price increase on Bike+ and Tread devices; laid off hundreds of member support employees; and will begin closing a high number of showrooms and retail stores in the U.S. and Canada. A judge also ruled that a 2019 class action lawsuit against them may move forward.
You can read the full interview from Bloomberg via their website.
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