Last week, on the heels of Peloton’s blowout earnings quarter, Peloton’s CEO John Foley had some interesting comments related to third party content on Peloton.
I don’t hate that idea. We talk about it. Never say never.
I’ve been thinking about this idea all weekend long, and I’ve come around to the notion that Peloton should not only allow Netflix on its interface but also open it up to all third-party developers. Since Peloton’s software is based on Android, it wouldn’t be a complete rewrite for video content developers. After pondering the idea, Peloton could open up a ‘Peloton App Store’ and open it to all video content apps. This App Store could include Hulu, Netflix, Apple TV+, and whomever else wanted to be included. While I don’t think I would use it much, I could see it being very popular. For me, the benefit of Peloton is 100% focused on the class for that period. If I were watching Netflix, I would slack heavily while watching a show. That’s my opinion, though.
Plenty of people want the option, though. Many people buy Peloton because they believe it is the best hardware on the market, and the software (content) is just a bonus for them. Even if they use the Peloton classes 75% of the time, they want to watch Netflix the other 25% of the time; Peloton is still getting their full subscription. It just cements Peloton has the hardware to workout with regardless if you want live class, on-demand, or even to watch a movie.
Peloton could even build classes designed around watching Netflix. The instructor could start the classes, so the cadence and resistance, and then Netflix could begin playing. Five minutes into the workout, the instructor could pop up through a picture-in-picture interface to update the pace, give some encouragement, and then the PIP interface would go away for another 5–6 minutes. With the upgraded speakers in Bike+, it’s, even more, a reason.
In the future, another interesting idea to ponder is would Peloton allow third-party workout content in a Peloton App Store? My initial instinct is to say absolutely not, but the more I’ve thought about it, the more it might make sense for Peloton long term. As they continue to grow, expanding their revenue opportunities is going to be critical. If a DailyBurn wanted to create an app for Peloton and was required to pay Peloton for that privilege, then that is a new revenue stream for Peloton.
On the other hand, it would open up Peloton subscribers to other workout providers. This model has worked out well for Apple, though. They allow Google and Microsoft apps on the macOS and iOS app stores. One of the keys to Peloton, in the long run, is building a ‘moat’ around their subscription. If they become a centralized place for all types of workout content, they are even less likely to cancel. Peloton’s churn is currently under 1%, but that will undoubtedly grow over the years. Keeping it low is going to be crucial to growing their business.
What do you think? Would you watch Netflix on Peloton? Do you believe Peloton will open a Peloton App Store?