Peloton to Increase its Monthly Fee for This for the First Time Ever

Athletic machine maker Peloton will be hiking the monthly fee for its on-demand fitness content for the first time ever.

The company has also decided to cut the prices of its Bike, Bike+, and Tread machines in an effort to reach new customers under CEO Barry McCarthy.

McCarthy, who is a former Netflix and Spotify executive, has been leading the company for just a little over two months and was aiming to announce the changes sometime on Thursday.

The move comes as Peloton is trying to turn around a sharp decline it has experienced in its share price.

Peloton shares initially jumped on the news before they were halted shortly after 11 a.m. for trading volatility. The stock closed the day down 4.6%.

McCarthy has been candid in recent press interviews about what he viewed as an opportunity at Peloton to cut hardware costs. According to the CEO, this would lower the barrier to entry for a consumer, and then the company could pivot its focus to growing monthly recurring revenues.

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

Effective June 1, the price of Peloton’s all-access subscription plan in the United States will go up to $44 per month, from $39. In Canada, the fee will rise to $55 per month, from $49.

Pricing for international members will remain unchanged, Peloton said.

The cost of a digital-only membership, for people who don’t own any of Peloton’s equipment, will still be $12.99 a month.

“There’s a cost to creating exceptional content and an engaging platform,” the company said to CNBC. The price increases will allow Peloton to continue to deliver to users, it added.

Meantime, beginning Thursday at 6 p.m. ET, Peloton will slash the prices of its connected-fitness bikes and treadmills in hopes of making its products more affordable to a wider audience and increase its market share coming off of a pandemic-fueled surge in demand.

The price of its Bike will drop to $1,445 from $1,745. The cost includes a $250 shipping and set-up fee. The Bike+ will drop to $1,995 from $2,495. The Tread machine will sell for $2,695, down from $2,845. The Tread cost includes a $350 shipping and set-up fee.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.