Peloton’s Discreet Removal of Unlimited Free App Membership Due to Subscriber Acquisition Challenges

Peloton made changes to its fitness app, getting rid of the unlimited free-membership option less than a year after introducing it. The company said this move was because the free membership wasn’t convincing users to pay for the full version.

New users can’t sign up for the free membership anymore, but those who already have it can keep using it. Now, new users have to choose between two paid options: $12.99 a month or $24 a month, with a seven-day free trial available.

CEO Barry McCarthy’s strategy shift is to capture more users willing to pay.

Last May, Peloton rebranded itself as a fitness company for everyone and heavily promoted its app. The new app had different levels, including the free membership, aiming to appeal to more people beyond just those interested in its expensive equipment.

Peloton’s CEO, Barry McCarthy, hoped that offering a free option would attract people to the app and then convince them to pay for the full version. But it didn’t work out as planned.

In November, McCarthy admitted that the relaunch didn’t do as well as they hoped in turning free users into paying customers. So, they got rid of the unlimited free tier soon after.

The app’s relaunch aimed to broaden appeal but failed to engage and retain free users. (Credits: Peloton)

During a conference in March, Peloton’s finance chief, Liz Coddington, explained that the free tier was hurting their efforts to get people to subscribe. Instead, they’re now focusing on improving their free trial to turn more trial users into paying subscribers.

Despite a drop in app subscribers, Peloton still believes in its app strategy and sees it as an important part of the business. However, the company’s stock has taken a hit, falling over 45% this year, with its market value dropping significantly from its peak during the COVID-19 pandemic.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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