Peloton to slash prices on equipment but raise prices on subscriptions

Peloton is cutting the price of its bikes and other equipment, but at the same time, it’s raising its subscription fees.

The connected fitness company’s moves come after a cold, hard winter in 2022. The company previously paused production of its fitness equipment in order to regroup, cut thousands of jobs, and introduced a new CEO.

“The pricing changes being announced today are part of CEO Barry McCarthy’s vision to grow the Peloton community,” a company spokesman told CNBC.

When McCarthy joined the company, the opportunity for Peloton to cut hardware costs was too good to pass up. He said a price cut should make it more affordable for a consumer to become a Peloton user. That, in turn, could enhance the possibilities for the company to grow monthly recurring revenues.

The new prices

Beginning June 1, Peloton’s all-access subscription plan in the U.S. will go from $39 a month to $44 per month. Pricing in Canada will also go up by $6 a month, but pricing for international members will remain unchanged. People who don’t own a Peloton bike but want to use the digital-only service will continue to pay $12.99 a month.

As for the price of its bikes and treadmills, the purchase price for a Peloton Bike will drop considerably – from $1,745 to $1,445, including the cost of shipping and setup. The Bike+ will drop in price to $1,995 from $2,495, and the Tread will sell for $2,695, down from $2,845; that also includes shipping and setup.

In a separate move, Peloton said it is also beta-testing a rental option in several U.S. markets. That would allow users to pay a monthly fee between $60 and $100 for a package that includes a rented Bike and access to its workout content library. The company said it recently expanded the test to additional markets and has added the Bike+ as another rental option.