Peloton is (Finally) Going All-In on Mobile Fitness
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Peloton has been trying to highlight and monetize its in-app content for a while now. That should help the company weather a market that's no longer as interested in hyper-expensive workout bikes as it was during lockdown.
And strategically, it's a great move that can easily be backed up by data, or rather revenue, lots and lots of mobile revenue coming from fitness apps!
This week, Peloton took another step towards splitting its fitness content from its hardware by introducing new subscription tiers that are only for content, no bike required.
The real question I have isn't "why?" but rather "why so late???"
Downloads of Peloton's app rose drastically early into the pandemic hitting an all-time high in April, where the app made its way into 430K iPhones and Android devices, according to our estimates.
That was back when the app was hardware-first and content kind of second, so it wasn't really monetizing those users. But downloads are good for later, which was the case here.
Downloads dropped after the peak because the app didn't have that much to offer to non bike owners, but all of 2020 was massive in terms of downloads, averaging more than 250K downloads every month. About 5x the downloads of 2019.
2021 is when troubles started brewing and downloads dropped, but at the same time the app started getting more content and revenue started rising.
So, downloads were on the decline and revenue was on the rise. Fast forward to 2023 and both are now on the decline or just keeping up.
Daily downloads for Peloton have dropped significantly since 2022. Peloton started the year with around 8K daily downloads and ended April with just 2.5K, according to our estimates. But news of the new tiers spread fast, and so far downloads are up significantly -- 6K on Wednesday.
Revenue is moving a bit differently.
Peloton started 2022 with a little over $3.7M of net revenue from the App Store in January. Net meaning after Apple takes its cut. They rose to $4.5M in April of 2022, but by November dropped to under $2.5M.
It recovered a bit in 2023 ending April with $3.7M, but overall the trend is barely growing, and that's on a good day.
All of this makes sense. Overall, Peloton is still a hardware company in most minds. Which is a shame because they create so much content! This new push could be what changes those minds and could set Peloton up for big success in the fitness space. But!
There is a but... I don't think Peloton can do it with its flagship app. It needs a new app that's focused on fitness and nothing else. Focusing the flagship app won't have the same impact. It has to be something else.
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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.