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Peloton S-1

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Re: Peloton S-1

#71

Post by etjossem »

dralley wrote: post #48
tempsy wrote: post #18

It really makes we wonder how we could be on the verge of a recession when companies like this become successful? Maybe I'm just too cheap to ever buy something like this but it feels like a mass marketed luxury good that requires a decent level of consumer confidence to have succeeded.

"how can we be headed for a recession when my janitor just bought a second house?"

Absolutely this. A bubble doesn't look like one until it pops, so you can't just say "everyone's buying $2000 spin bikes, everything must be fine." For starters, Peloton does a majority of its sales through Affirm and other consumer financing instruments, and books them as revenue. It's more accurate to say "everyone is buying $2000 spin bikes using 30% APR installment loans."

In the risks section, Peloton says that their revenue could decline due to changes in credit markets and decisions made by credit providers - a.k.a. if a bunch of people start to default on their expensive luxuries.

"In the future, we cannot be assured that third-party financing providers will continue to provide consumers with access to credit or that available credit limits will not be reduced. Such restrictions or reductions in the availability of consumer credit, or the loss of our relationship with our current financing partners, could have an adverse effect on our business, financial conditions, and operating results."

Re: Peloton S-1

#72

Post by onlyrealcuzzo »

gamblor956 wrote: post #54
michaelwilson wrote: post #46

Earlier quoted context omitted.

What's amazing is that they get people to pay _more_ than they would - or would even think of paying - for a streaming service like Netflix or Hulu, but their content creation costs are obviously a fraction of what it take to produce even one show on those platforms.

What's really crazy is that the cost of 1 month of a Peloton subscription is less than the cost of 2 spinning classes in a real-world spin studio. If you spin enough, you actually do save money with a Peloton. $40/month + $2000/bike vs $30/class (in LA/NY/SF) results in a breakeven point of roughly 4 months if you spin every weekday, which many spin aficionados do.

What's really crazy to me is how expensive those spin classes are, how many people go to them, how little they pay the stay, and how all those companies still lose a ton of money!

Re: Peloton S-1

#74

Post by Androider »

mdorazio wrote: post #43
askafriend wrote: post #21

Earlier quoted context omitted.

Have you seen how expensive a gym membership is?

Under $30 a month for a 24 hour fitness membership via Costco with zero initial cost ;) "Nice" gyms like Equinox are of course significantly more. It's important to segment the gym market into different tiers and niches, and figure out what the market size is for each. Same as for direct equipment sales like this. To your point, though, I suspect the people who would pony up for a Peloton are the same people who woul…

Equinox is $180-$500/mo, and popping up like mushrooms on every block in NY (36 so far). A Peloton bike is downright frugal in comparison.

Re: Peloton S-1

#75

Post by stefan_ »

gamblor956 wrote: post #62
jgys wrote: post #49

Earlier quoted context omitted.

> compared to driving to e.g. SoulCycle or a spin class Radical idea: rather than choosing between a $2,000 stationary bike for your living room or burning a bunch of fossil fuels to move yourself and your 2,000+ pounds of motor vehicle to a gym to ride somebody else's stationary bike, you could just buy an ordinary bike and ride around outside. You could probably even buy a indoor trainer for your ordinary bike as w…

Radical idea: Peloton's target market is the kind of person who is willing to spend $2000 on an indoor spin bike either as their primary mode of exercise or as one of many bikes they own. Especially people who want to spin during times of inclement or excessive warm weather. The Peloton may not make much sense to people living in pleasant cycling meccas on the West Coast, but east of the Rockies the weather is a lot…

In particular, Peloton's target market is overwhelmingly female. You won't find it in this S1, but this alone is why you can straight up disregard everything you will read on HN today about their business model.

No, it turns out women don't buy carbon bikes, a standalone trainer, wrench a cassette on it, put the bike on, hook up a tablet somewhere, install a power meter, ... it's the ole "rsync is superior to Dropbox".

Re: Peloton S-1

#76

Post by superfrank »

michaelwilson wrote: post #46
jakarta wrote: post #6

Nice unit economics: Our Connected Fitness Subscriber Lifetime Value for fiscal 2017, fiscal 2018, and fiscal 2019, was $267.1 million, $604.4 million, and $1,053.8 million, respectively, or $3,433, $4,015, and $3,593 per Connected Fitness Subscriber, respectively. As we expand our content offering, develop new interactive software features, and grow our community of Members, we believe we can maintain a low Average…

What's amazing is that they get people to pay _more_ than they would - or would even think of paying - for a streaming service like Netflix or Hulu, but their content creation costs are obviously a fraction of what it take to produce even one show on those platforms.

I think it makes sense.

Not to get too "ad-speaky", but people aren't buying something like this to be entertained, they're buying it because it promises them a better life. Peloton aren't selling content, they're selling the idea of being in shape and healthy.

Re: Peloton S-1

#77

Post by uptown »

nlawalker wrote: post #53
uptown wrote: post #11

Under the risks section: "We derive a significant majority of our revenue from sales of our Bike and a decline in sales of our Bike would negatively affect our future revenue and operating results;" What many people don't know is that you can access all their classes using your own exercise bike and their apps, paying a little over 1/4 of the normal monthly subscription fee. The limitations of this approach is that y…

I had no idea! I had to go find it for myself: https://www.onepeloton.com/membership $19.49/mo gets you all the content. It's double that ($39) to make use of the bike's live metrics/dashboard/leaderboard, plus the bike itself is $2245. This is really interesting to me, as I've heard quite a few people say that the content is what they really like.

There’s a couple writeups on the web. Here’s one I used:

https://www.sippingandshopping.org/my-peloton-bike-alternati...

Presumably that post has affiliate links. It’s not my page.

I guess they’ve raised the subscription price. I think I’m grandfathered in at $13/mo paid via iTunes which I preload with discounted iTunes cards to knock another 15-20% off the price paid.

I do wish I had the metrics and integrated solution. Maybe I’ll upgrade someday.

Re: Peloton S-1

#79

Post by mdorazio »

gamblor956 wrote: post #59
mdorazio wrote: post #43

Earlier quoted context omitted.

Under $30 a month for a 24 hour fitness membership via Costco with zero initial cost ;) "Nice" gyms like Equinox are of course significantly more. It's important to segment the gym market into different tiers and niches, and figure out what the market size is for each. Same as for direct equipment sales like this. To your point, though, I suspect the people who would pony up for a Peloton are the same people who woul…

Spin classes cost $30/month at spin studios. The people going to those classes are Peloton's target market, not the people content to spin at the local 24 hour fitness.

What city are you in? Here in Portland, spin classes are more than double that. I think Peloton's market overlap is a combination of people who would sign up for Spin classes at a dedicated studio, people who would sign up for Spin classes at a nice gym that gives them as part of a membership, and people who think cycling is a good workout and have high disposable income, but no desire to join a real class or gym of any kind.

It's obviously not for people like me who would happily buy a set of used free weights for a few hundred bucks if I had a garage or basement.

Re: Peloton S-1

#80

Post by generalpf »

jgys wrote: post #49
cellis wrote: post #27

Earlier quoted context omitted.

I bought one. I like it because it's pretty high quality, I didn't have to pay cash ( using Affirm it's 62/mo /39 months), and I was able to test ride 2 of them for free ( apartment complex has a gym with one, but very hard to get a time to ride ). My girlfriend likes it because it saves tons of time compared to driving to e.g. SoulCycle or a spin class and they have nice social features like a competition ladder. Bu…

> compared to driving to e.g. SoulCycle or a spin class Radical idea: rather than choosing between a $2,000 stationary bike for your living room or burning a bunch of fossil fuels to move yourself and your 2,000+ pounds of motor vehicle to a gym to ride somebody else's stationary bike, you could just buy an ordinary bike and ride around outside. You could probably even buy a indoor trainer for your ordinary bike as w…

Winter.
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