Peloton removes free app memberships
A stationary bike inside a Peloton store on January 25, 2022 in Manhattan, New York City.
Carlo Allegri | Reuters
peloton The company quietly removed the free unlimited membership tier less than a year after the fitness app's launch, the company said, because the efforts failed to convert users into paid members.
Within the past few weeks, Peloton has discontinued its free option for new users, which was once a key part of the business's growth strategy. Peloton said users who signed up for the company's free unlimited membership before it was removed will still have access.
New users looking to workout with the company's app currently only have access to two tiers: $12.99 per month or $24 per month, with the option of a 7-day free trial.
Last May, Peloton debuted a flashy rebrand The company promoted itself as a fitness company for everyone and made its digital app the centerpiece of its marketing campaign. The rebrand introduced a new tiered app strategy, including an unlimited free membership option and two other paid tiers with varying levels of content.
The rebrand was carried out with CEO Barry McCarthy thinking as follows. convert peloton From companies that focus on hardware to those that invest in apps as well. As the company's sales steadily declined, he was trying to attract new customers who were interested in the brand but might not be willing to pay thousands of dollars for the equipment.
Mr. McCarthy, former Netflix and spotify Executives have long wanted a free tier for their company's apps. He was betting that free users would fall in love with Peloton's content, try the app and decide they wanted more content, then jump to paid memberships, which offer a much wider variety of classes. .
Apparently that bet was a failure.
mccarthy told investors in November The company said the reboot was “less successful in attracting and retaining free users and converting them into paying members” than the company expected.
Shortly thereafter, the unlimited free tier was no longer available.
inside morgan stanley At a conference in March, finance director Liz Coddington said the company “quickly” understood that the free tier was “cannibalizing” its efforts to convert free trial members to paid members, and that it led the company to move to a free trial model.
“It's important to know that our app is still a work in progress. We still have a lot of room for improvement,” Coddington said. “What we found is that we needed to figure out how to better engage them during the trial period, convert them to paid, and keep them engaged over longer periods of time to achieve higher retention.” We believe that if we do that, we will improve our marketing efficiency because we will increase our retention and conversion rates.”
Although app subscribers declined during Peloton's fiscal second quarter (ending Dec. 31), Coddington said the company still “believes.”[s]” into its app strategy and remains a “key part of the business.”
Peloton stock was down more than 6% as of Monday's close and has fallen more than 45% this year. The company's market cap has shrunk to about $1.2 billion, a fraction of the $47 billion it was at the height of Peloton's success during the coronavirus pandemic. Not too much.
Summarize this content to 100 words A stationary bike inside a Peloton store on January 25, 2022 in Manhattan, New York City. Carlo Allegri | Reuterspeloton The company quietly removed the free unlimited membership tier less than a year after the fitness app's launch, the company said, because the efforts failed to convert users into paid members. Within the past few weeks, Peloton has discontinued its free option for new users, which was once a key part of the business's growth strategy. Peloton said users who signed up for the company's free unlimited membership before it was removed will still have access.New users looking to workout with the company's app currently only have access to two tiers: $12.99 per month or $24 per month, with the option of a 7-day free trial. Last May, Peloton debuted a flashy rebrand The company promoted itself as a fitness company for everyone and made its digital app the centerpiece of its marketing campaign. The rebrand introduced a new tiered app strategy, including an unlimited free membership option and two other paid tiers with varying levels of content.The rebrand was carried out with CEO Barry McCarthy thinking as follows. convert peloton From companies that focus on hardware to those that invest in apps as well. As the company's sales steadily declined, he was trying to attract new customers who were interested in the brand but might not be willing to pay thousands of dollars for the equipment. Mr. McCarthy, former Netflix and spotify Executives have long wanted a free tier for their company's apps. He was betting that free users would fall in love with Peloton's content, try the app and decide they wanted more content, then jump to paid memberships, which offer a much wider variety of classes. . Apparently that bet was a failure.mccarthy told investors in November The company said the reboot was “less successful in attracting and retaining free users and converting them into paying members” than the company expected.Shortly thereafter, the unlimited free tier was no longer available. inside morgan stanley At a conference in March, finance director Liz Coddington said the company “quickly” understood that the free tier was “cannibalizing” its efforts to convert free trial members to paid members, and that it led the company to move to a free trial model. “It's important to know that our app is still a work in progress. We still have a lot of room for improvement,” Coddington said. “What we found is that we needed to figure out how to better engage them during the trial period, convert them to paid, and keep them engaged over longer periods of time to achieve higher retention.” We believe that if we do that, we will improve our marketing efficiency because we will increase our retention and conversion rates.” Although app subscribers declined during Peloton's fiscal second quarter (ending Dec. 31), Coddington said the company still “believes.”[s]” into its app strategy and remains a “key part of the business.” Peloton stock was down more than 6% as of Monday's close and has fallen more than 45% this year. The company's market cap has shrunk to about $1.2 billion, a fraction of the $47 billion it was at the height of Peloton's success during the coronavirus pandemic. Not too much.Don't miss exclusive information on CNBC PRO
https://www.cnbc.com/2024/04/15/peloton-removes-free-app-membership.html Peloton removes free app memberships
