According to an interview with the New York Times, Barry McCarthy, the new CEO of Peloton, thinks an app store and new subscription model could be ways to boost sales.
“It could be an open platform and part of the creator economy”
McCarthy, who served as the former chief financial officer of Spotify and Netflix, says his vision for Peloton may include an app store open to third-party content. Is it running an app store?
He downplays the importance of hardware when it comes to fitness equipment. McCarthy suggests that the most valuable experiences come from on-screen interaction with instructors, music, and community features, which include things like video chatting, and that the fitness company has only just begun to develop.
McCarthy once again hints at the possibility of a brand new subscription model. He wants to find asweet spot between the cost of the workout equipment and a subscription to the classes. McCarthy envisions a lower upfront cost and a higher subscription fee for the equipment.
The Peloton saga has been interesting. After its sales skyrocketed in the midst of the COVID-19 pandemic, Peloton overcompensated by spending hundreds of millions to expedite shipping and build a new factory. The company put a pause on treadmill and bike production after reports of injured children and one death, as sales began to slump so much that the company put a halt on treadmill and bike production.
2,800 employees were terminated earlier this month after former CEO John Foley stepped down. McCarthy's first day on the job was marked by a tense meeting with fired employees and rumors of a Peloton buyout.
McCarthy is confident that he can steer Peloton in the right direction, but he probably can't do it by himself. Throwing an app store in the mix makes it more interesting. It could allow it to use third-party app sales and popularity to its advantage.