Report: Peloton’s new CEO says no sale is in the cards; company will focus on content

Peloton’s brand-new CEO Barry McCarthy tried to quell rumors that the company is teeing up for a sale, saying instead that it will “double down” on content and international expansion, according to a new report.

McCarthy, the former finance chief of Netflix and Spotify, who just took the company’s reins after John Foley stepped down, told the Financial Times that his focus is on long-term growth opportunity, not a sale, laying out the fact that he is relocating from California to New York as proof of the fact:

“If I thought it was likely that the business was going to be acquired in the foreseeable future, I can’t imagine it would be a rational act to move across the country,” he said. “There are lots of other things I could be doing with my time that are quite lucrative than hanging out with a business that’s about to be sold.”

Part of McCarthy’s new strategy to turn the ship around includes a heavy focus on digital content rather than hardware, with the possibility too of expanding the product lines to where customers could own “multiple machines.” Peloton users are also likely to see “an entirely different pricing structure” to replace the $39-a-month subscription fee, which has been the same since the company first launched.

Bloomberg’s Mark Gurman himself expanded on this notion by saying that Peloton should drop the hardware business altogether (and therefore forfeit its strength on being a highly vertical integrated business the likes of Apple) and rather focus on selling digital content and software, while partnering with other companies, such as Echelon and NordicTrack. Gurman writes:

The idea would be to partner with equipment makers and turn Peloton’s software and content into the “Android” of the fitness world. There are plenty of companies building home fitness machines already. Peloton doesn’t need to be one of them.

Working with companies like Echelon, NordicTrack, Schwinn and others, Peloton could upgrade the world’s bikes and treadmills by putting its operating system and fitness content at their core. I’m sure treadmill and bike makers wouldn’t hesitate to embrace the Peloton brand and content—especially if they were no longer competing with its hardware.

Still, Peloton is rumored to have two new hardware product launches in the works, including the long-speculated connected rower and a Tonal-like cable-pully weight system, which is farther down the pipeline. Last week, Peloton announced that it is also planning to cut roughly 2,800 jobs, which equates to 20% of its corporate workforce.

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