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Peloton To Start Charging Subscribers With Used Equipment $95 Activation Fee (cnbc.com) 137

Posted by msmash from the squeezing-every-last-drop dept.
Peloton on Thursday said it will start charging new subscribers a one-time $95 activation fee if they bought their hardware on the secondary market as more consumers snag lightly used equipment for a fraction of the typical retail price. From a report: The used equipment activation fee for subscribers in the U.S. and Canada comes as Peloton starts to see a meaningful increase in new members who bought used Bikes or Treads from peer-to-peer markets such as Facebook Marketplace. During its fiscal fourth quarter, which ended June 30, Peloton said it saw a "steady stream of paid connected fitness subscribers" who bought hardware on the secondary market. The company said the segment grew 16% year over year.

"We believe a meaningful share of these subscribers are incremental, and they exhibit lower net churn rates than rental subscribers," the company said in a letter to shareholders. "It's also worth highlighting that this activation fee will be a source of incremental revenue and gross profit for us, helping to support our investments in improving the fitness experience for our members," interim co-CEO Christopher Bruzzo later added on a call with analysts.
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Peloton To Start Charging Subscribers With Used Equipment $95 Activation Fee More

Peloton To Start Charging Subscribers With Used Equipment $95 Activation Fee

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  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Thursday August 22, 2024 @09:52AM (#64726490)
    Comment removed based on user account deletion

    • Re: (Score:2)

      by TWX ( 665546 )

      heh. What I now see is Peloton has just destroyed whatever was left of the economics of the secondhand market, which could well mean that some buyers who would have bought new with resale in-mind now won't go with the brand.

      Anyone looking to buy a used Peloton will now automatically offer $100 less than they would have before. That could well mean that those currently possessing Peloton equipment would have to just give it away.

      • Re: (Score:3)

        by N1AK ( 864906 )
        It's amazing how this kind of behaviour seems to appear in almost every market with some form of resale element at some point; it's like companies see sales of something related to them and just have to get part of the transaction. As you point out it does seem pretty petty and/or self-defeating, in this case. I can't get over how they highlight the growing number of users buying their stuff second hand, that those second hand buyers seem to maintain subscriptions for longer than rental subscribers, and AT

        • Its because greedy people are greedy and they are the ones that tend to be super rich. It is because our culture has normalized making money for doing nothing is totally acceptable. They even sell it as a good thing like NFTs, where they say the original artist can get a cut of every sale. If you sell something its not yours any more, if you put precisely zero effort into a transaction you should have no right to claim money from it, (apart from a limited time it recover you cost + a reasonable profit).

          Peop

      • Re:So much for selling your used Peleton equipment (Score:5, Insightful)

        by ShanghaiBill ( 739463 ) on Thursday August 22, 2024 @10:09AM (#64726542)

        When you're drowning, you grab whatever you can. You don't think about the long run.

        Peleton's share price has fallen 97% from its peak.

        Peleton is just trying to stay solvent with whatever revenue they can squeeze from their customers.

        Their actions may hurt them in future years, but if they don't do it, there will be no future.

        • Comment removed (Score:4, Insightful)

          by account_deleted ( 4530225 ) on Thursday August 22, 2024 @10:17AM (#64726564)
          Comment removed based on user account deletion

          • I do believe you're right, that seems to be exactly what Peleton is doing. Peleton's implosion should be coming any day now - that'll solve the problem of who owns the software.

            Isn't there a server-based component? I thought they did stuff like video of a ride through a forest and such, and that that content is streamed. If so, and they implode, used devices will lose functionality.

        • They're only down so much because of COVID and every rich yuppie needing something to exercise at home blowing up their price.

          • Yeah, I question if they're 'down' so much as 'back to where they should be, and would have been absent government-mandated lockdowns.'

            Lord knows my fiance's lockdown Peloton has never been actually used.

          • You can exercise at home without Peleton equipment, what they really added was the at-home-trainer video access which might be what a lot of people were missing from a gym's spin class. As such, Peleton wasn't a hardware company and their profits weren't primarily from the bikes, so adding a fee to reactivate really feels like someone didn't have enough beans to count.

        • Re: (Score:2)

          by Bob_Who ( 926234 )

          So, this turned out exactly like my annual gym membership. No matter how much I pay in advance to get in shape, I still can't loose the weight.

          Sounds to me like Ozempic broke the camel's back.

      • "You will own nothing, and be happy."

        • You know, every time I read this it seems intended as an insult, but in a way I kind of agreee with it? I see a sort of zen truth to it. I'm material as all heck, but I see it as a sort of recognition of core principles. Why own stuff if it doesn't make you happy? The extremely wealthy tend to not be happier than the middle class.
          We tend to own stuff because it allows us to meet life needs cheaper and more securely than not. If we can meet those life needs securely without owning stuff, why not? You are

          • If we can meet those life needs securely without owning stuff, why not?

            Because the second you own nothing, you are completely vulnerable to those that do. Those that own can revoke your life's needs through their ownership, and believe me they will. As doing so means they can extract their life's needs from you for the rest of your life without them even lifting a finger.

            The correct question when faced with overwhelming wealth has always been "What evil did you commit...."

      • Well, you don't need the Peleton service. But the service is essentially their product, the bike is just another exercise bike. But if you can get one cheap (or the treadmill) and don't want the subscription they'll still work just like one you find in a gym.

      • Most used exercise equipment has little resale value in the first place. It's not rare that fitness machines are advertised as free for the taking, especially when people need to move.

        I didn't see any free Peloton in my market's craigslist personals, but there is a 2 year old model for just $200.
        There are numerous exercise bikes from other brands listed for free. They are lower tech and won't require any activation fee or online service.

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Right the way to this needs to be explained to the average person is. You own and you can resell it but the company effectively retains control of the resale value, they might very well set it to $0, and you can't do jack about it.

      • I wouldn't say $0. Without the online features, it's a normal exercycle of fine quality.

        • Re: (Score:2)

          by DarkOx ( 621550 )

          Never owned one so I don't know; but are you sure they can't do something obnoxious like lock the resistance at maximum when the license is expired etc? Remember that is only one software update a if yours is 'active' and maybe if its just connected!

          I was speaking in more general terms about any 'connected device' we really need to get the public thinking about what it really means, vs their nominal expectations about 'ownership'

          • They do have a feature, like "free ride" or such, where you just use it as a stationary bike, the app will still track miles and other stats.

        • Comment removed based on user account deletion

          • Re: (Score:2)

            by XXongo ( 3986865 )

            Just to say - if you want to walk or run for exercise, there are sidewalks that are totally free to use, they go on for miles,

            Yeah, but the sidewalks get very slippery in the winter. If people even bother to shovel them.

            And biking can get seriously dangerous in winter.

          • It's not resellable (who wants a dreadmill?).

            Exercise equipment generally sells on Craigslist in "nearly new" condition for 10-20% of the original price.

            I bought my stationary bike on Craiglist.

            there are sidewalks that are totally free to use

            Yes, but sidewalks are often too cold or too hot and sunny.

            I like to pedal while I watch TV. I can't do that while walking outdoors.

            If you want to do the cross-country skiing thing, I'll bet you can do it in real life for the price of an exercise machine. Ditto for rowing a boat.

            Skiing and boating require me to drive a long way. They are not available during a 30-minute break from coding.

          • You bought, then gave away two clothes racks.
    • I'm a cyclist, and I remember first seeing that thing advertised. I always thought it was a ridiculous scam intended solely to rake in subscription fees, because so far as I know you can't really use the thing without the subscription """service""". This news more-or-less verifies I was correct from the beginning.

      For what it's worth, you can get stationary trainers you can put your actual bicycle onto if you need to get exercise/do training indoors, no subscription required. Or, better yet, ride outside a

      • For those of us who can't easily ride outdoors (allergies and humid conditions; ice and snow in the winter) what would be the cost of a reasonable bike and a stationary trainer? Wondering how that compares to the cost of the Peloton Bike base model.

        My understanding is that you could use the Bike in "just ride" mode without a subscription. You wouldn't have access to any of the actual content, and your stats wouldn't upload to your OnePeloton account, but the bike and the metrics still work. It sounds like t

        • I have very bad allergies and have been training for and participating in road racing since 2009, and it hasn't stopped me from riding outside.

          If all youi're interested in is turning pedals indoors then you don't have to spend much at all on a bike, and in fact you'd be better off getting a used one off Craigslist or similar, and the same goes for stationary trainers, people buy them, decide they don't like using them, then sell them, that's how I got the one I have (that I don't use except at race venues

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      It's a bit more complicated than that. You own the equipment, but it's just an overpriced exercise bike without the software. And you don't own the software.

      This sort of thing really needs to be made illegal. If you sell software then no "you only bought a licence" BS, you sold software and the owner can sell it to someone else.

    • Come to think of it, I guess people don't own their Peleton equipment, they just have a license to use it - at least, that't how I interpret this. The equipment and the software are components of the same object - if you can only sell the physical component, you can't sell (or claim to own) the software component. For those of us accustomed to working with software, an old story. If you don't own the software half of the object, you don't own the object. Have a nice day.

      That's like complaining that your Roku or ChromeCast doesn't do much when there's no internet connection. The whole point is that it is connected to social workouts. I get that /. has a lot of Peloton haters, but if you're bitching about this, you clearly don't understand the product.

      For those who haven't used it, Peloton is the Apple of connected fitness. They offer both device workouts everyone knows like bikes treadmills, and rowers, but they also offer yoga, strength, and regular fitness classes

      • Comment removed based on user account deletion

        • Re: (Score:2)

          by mattr ( 78516 )

          Wow, hate on. I do not have a Peloton, don't know much about it, and cannot be said to be fit. More like hunched over laptop. That said, this guy's explanation of Peloton and the connection fee actually sound fine to me. I think such a device should have built-in software/media letting you do the basic usage without connecting and paying a recurring fee. But if Peloton is producing and distributing what sounds like a TV channel and maybe bike trail elevation descriptions over the net, and they no longer hav

      • Except that if I buy a used Roku, I can just set up a new subscription without having to also fork over a few sawbucks to Roku for the privilege. Peloton should be making it easier for people to join, not discouraging them. What's next, an annual firmware update with a $100 "renewal fee"?

      • > A $2000 bike is more expensive than my $300 one it
        > replaced, but it weighs 10x as much and is so much
        > more stable and higher quality.

        Huh? Out of curiosity, why is your more expensive bike heavier? All of the people I know who put extravagant money into high-end bikes are paying for them to be made from aluminum, titanium, exotic magnesium alloys, or carbon fiber to make their bikes as LIGHT as possible. It's usually the cheap ones that are 10x heavier. Do you do some sort of unusual or exot

        • Out of curiosity, why is your more expensive bike heavier?

          It's a stationary bike, so it has thicker, stronger steel. You can pedal hard and it won't wobble or budge. My old $300 amazon cheapo stationary bike would wobble and creak and make funny noises when you get on and off it like it was about to fall apart. Their bike is slightly nicer than most professional spin bikes. It's very heavy duty and I've used it a several times a week for 3 years and it looks/feels good as new.

      • Re: (Score:2)

        by nadass ( 3963991 )
        Those are all your fancy (and oft contradictory) singular viewpoint and lifestyle decision driven by your own misguided beliefs about health, personal fitness, and committed consumption of higher-priced exercise equipment. Bravo!

        Your overly-defensive posture is unnecessary. NOBODY is arguing against the business model of a digital fitness subscription. NOBODY is arguing against your personal choice of buying Internet-connected exercise equipment. NOBODY is telling you how to spend your (and your family's
      • "It was literally impossible to be fit before the advent of Peloton" is certainly A Take.

        • "It was literally impossible to be fit before the advent of Peloton" is certainly A Take.

          You're correct, it is "A" take, but not what I said. I said:

          If you're going to get in shape, stay in shape, and have any sort of life, you need a gym or a Peloton, or something to workout well and maintain your fitness level for decades, especially as you age.

          At 20?...yeah, you're probably fine just not being an idiot...at 50?...you need a serious program + discipline in order to be in great health. You basically need a to go to a gym or do gym stuff, especially if you wish to maintain it as you age. I am sure there are some exceptions...some genetically blessed individual who just walks the dogs every morning and is built like a Greek God, but he's the exception, not the rule...most of us, especiall

      • Re: (Score:2)

        by GoJays ( 1793832 )

        A $2000 bike is more expensive than my $300 one it replaced, but it weighs 10x as much and is so much more stable and higher quality.

        Ummm what? Bikes get lighter as you increase the price, cheap bikes are the ones that have steel frames. An expensive bike will have a carbon fiber or titanium body.

        Fitness is a long-term commitment. If you're using clever hacks to do it cheaply, you're not doing it well..that's the equivalent of saying...who needs a PhD or even an education when you have a library card? If you're going to get in shape, stay in shape, and have any sort of life, you need a gym or a Peloton, or something to workout well and maintain your fitness level for decades, especially as you age.

        Sounds like somebody is a victim of marketing. I'm in fantastic shape for my age (44) and have never had a gym membership or any kind of exercise equipment. I play soccer twice a week, I rollerblade (less impact on joints than running) often and bike along waterfront trails. I also do some free weights. An adjustable set of dumbbells' c

      • Re: (Score:2)

        by DarkOx ( 621550 )

        That's like complaining that your Roku or ChromeCast doesn't do much when there's no internet connection.

        Is it though? I think everyone understands Peloton is a subscription service. I don't think anyone is surprised to enjoy most of the features you'd have to pickup paything the subscription. This however is an activation fee. $95 seems pretty steep for what amounts to 'UPDATE device_onwer SET first = 'Dark' , last = 'Ox' WHERE device_id = 2342323942392292392;

        • Plus the equipment was already activated, or "setup", so why would you need to do that a second time? Whatever was activated should be usable. Or in other words, how is it different to having another family member use the bike - you wouldn't all be expected to have accounts that require the same activation fee, would you? That'd be expensive very fast.

      • Also, before you do that cliche old asshole "back in my day"...or "i just take my yard sale $50 bike around the block and it's free" smug bullshit...no one who says any stupid nonsense like that is actually fit. Fitness is a long-term commitment. If you're using clever hacks to do it cheaply, you're not doing it well..that's the equivalent of saying...who needs a PhD or even an education when you have a library card?

        There is nothing wrong with cleaver hacks it can get you just as fit as spending a lot of money or even more, my hack is I bike to work 30 minutes each way, I no longer have a car so I have no choice. I have been doing it for 7 years, it works for me, way more than I personally would do if it was a stationary bike, (I have tried). It saves me money, you do whats good for you but there is absolutely nothing wrong with "hacks", there is nothing magical on spending money on expensive exercise equipment that wi

  • So I have to pay to pay? (Score:4, Interesting)

    by turp182 ( 1020263 ) on Thursday August 22, 2024 @09:54AM (#64726496) Journal

    Let's get this straight. They want a payment so that I can agree to continue to pay them on a monthly basis?

    Is that correct?

    If so, that's messed up.

  • Just go outside for exercize. It's free.

    Oh, wait. Wa State sticks everyone with a parking fee at parks and trailheads.

    • Re: (Score:2)

      by Tablizer ( 95088 )

      And get shot by a meth nut with a gun. Thank You NRAgop, you turned us into Somalia.

      • Comment removed based on user account deletion

      • Re: (Score:2)

        by PPH ( 736903 )

        And get shot by a meth nut with a gun.

        The meth heads didn't start showing up at trailheads until public transportation started running bus routes out there to discourage private car traffic. But mostly, they just stick to breaking in to parked cars.

        If they ever had a gun, they sold it for drug money.

    • Or you can go outside...in your neighborhood. That's always free.

      Or if you really want to exercise inside, just look for a used (any other brand) gym equipment. Most of it is in great shape, and cheap, because people buy it with great intentions, then stop using it after a month or two. Seriously, nice treadmills or ellipticals are available for $100 on your neighborhood online marketplace.

  • If this negatively affects resale, will owners sue for loss of value?

  • Now you also buy the account second hand from the former owner (just switch the e-mail or something).

  • ...that requires power to "work". Test it unplugged, and if it can't do the job, skip it. They are John Deere-ing them with lock-in gimmicks. Power and screens are fine for motivation videos and other gimmicks, but you don't want to be tied to them.

    Another problem I've encountered is that a generic mechanic couldn't fix our machine because it required a custom sealed module at a key joint. The company that made the module has belly'd up, we are SOL. More lock-in shit, arrrggg. De-chubbing is a lot of run-

  • So you bought a license to use the software (Score:4, Interesting)

    by Growlley ( 6732614 ) on Thursday August 22, 2024 @11:07AM (#64726696)
    that the company considers to have a value of $95 and hardware for the other $x, so why doesnt the doctrine of first sale cover my right to sell the license? if after all they are issuing a 'new' license to the new owner theyn legally donrt I retain my license even if its useless?

  • Can you say enshittification? (Score:3)

    by Rosco P. Coltrane ( 209368 ) on Thursday August 22, 2024 @11:50AM (#64726850)

    Another greedy company succombs to the allure.

    Hint: do you like cycling? It's much better outside with actual, real friends.

    • It's okay people.. ignore the man... it's cold and terrible outside.. there are bugs.. ride indoors please! :)

      Happy to have these cyclers off the road and sidewalks. It's already a pain navigating with the scooter and bikes out now, where the riders don't know how to ride, or the rules/etiquette of the road/sidewalk/path.

    • Hint: do you like cycling? It's much better outside with actual, real friends.

      The practicality of that depends on where you live and how much time you have. Personally, I live in a rural valley that has marvelous roads for cycling, so I can just hop on my bike and pedal down the road. I have a wide variety of routes with varying terrain and distances, all with beautiful scenery, clean air and few cars. I can do my 10-mile minimum in 50 minutes end to end, from the time I pull on my bike shorts to the time I'm done showering and dressing. But not everyone has that. If you have to

  • Lets be clear Peleton provides a service in addition to selling exercise machines. It is now making an initial sign-up charge for new users of that service. That is far different than charging for use of the software. Certainly people buy a Peleton to have access to that service. But it appears all Peleton is really saying is you can sell the machine but you can't buy/sell that access as a third party. You have to buy it from them and they are changing their pricing to include an initial fee for new users.
    • It also seems obvious that new users of the service require more support than existing longtime users. The person selling the machine is unlikely to provide that support and someone signing up for Peleton's service has every reason to expect Peleton to provide it. The alternative to an initial fee for new users is to charge existing users more to cover the costs of support for those new users.

  • ..to devices that require a subscription for functions that could be done locally

  • Confucius say Do not tie your fate to faraway benefactor.

  • Can't wait until Tesla and others start this. You may have bought a used car.. but now, you need to pay for the features/services (again).. although they were paid for initially.

  • You buy a used Peleton exercise bike and you need to pay another $95 just to be able to use it? Why should I pay an extra fee for activation of a device that is already activated, they should be glad to have me as a new subscriber. But I know enough, why would I buy a Peleton device if the competition is doing it for free?
  • So they are effectively stealing $95 from existing Peloton owners, because that's how much the resale value of their bikes will have to be decreased. If anything, this should apply only to people who buy a new bicycle from the date the moronic decision was made.
  • This won't have the intended effect. If I'm buying a new one, then it just became harder to resell. Which means it isn't as valuable, which means I'm not Willington pay as much for it. If I'm an existing owner, I'm mad they depreciated my purchase retroactively. If im a used customer I know it would be hard to resell and that I'll have to discount t it to get rid of it. I'm also aware that I'm going to need to pay 100 dollars to 'activate' a used one and that doesn't sound like something I want to do,

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