The release of the Peloton S-1 has become a piñata for anyone with an opinion about ‘cheap money’, ‘VC funding’, unprofitable business models, and fitness fads. Their points have merit but perhaps we’re being too quick to dismiss the interactive fitness platform that is Peloton. The idea of an interactive fitness platform is certainly feasible, certainly possible, and realistically it’s inevitable.
The obsession of one’s physique has grown considerably in the social media era and is now fully ingrained in the psyche of Gen Z & Millennials. This not a new trend but rather an extension of an existing trend. These are the children of parents who spent their money on Richard Simmons & Jazzercise VHS tapes. This wasn’t just a pre-internet trend either; P90X & Insanity DVDs were just as prevalent. Beyond seeking instructional content consumers have also been unthwarted in their pursuit of transformational fitness equipment. The ShakeWeight, AB lounge, and ThighMaster all made brief appearances into the living rooms of those looking to improve their physique at home. Nowadays all these items are ridiculed and embarrassing to those who purchased them but it is very illustrative of the collective appetite of consumers looking to transform their physique. Products like vibration belts and toning apparel show that consumers are even receptive to products that are sold as magic elixirs. 
The more things change the more they stay the same. Consumers in the past were sold fitness content and products by charismatic and inspiring fitness celebrities. Thanks to social media there are more fitness celebrities than ever before. These influencers can focus on niche fitness goals, can interact with their fan bases, and use their platform to cross sell other goods and services. Peloton has an opportunity to become an exclusive home for these influencers to teach classes and interact with fans. This is how the interactive platform becomes a valued channel for consumers.
Peloton currently offers two main products that pair with it’s propriety interactive platform; a stationary bike and a treadmill. If they’re serious about user engagement they should introduce a third product- an indoor bike trainer.
The indoor bike trainer is an opportunity for Peloton to target a market that currently has little to no interest in their stationary bike offering but may have interest in their interactive fitness platform. The market at hand is “real bikers”. Real Bikers don’t buy stationary bikes; they ride outdoors and they compete against other athletes. Cyclists will spend anywhere from $1,500 to $10,000+ on a road bike making the $39 monthly subscription to Peloton’s platform look small in comparison. These cyclists currently buy indoor bike trainers for winter training, bad weather, or even just for convenience’ sake. Peloton’s focus on rider data would prove instrumental in their training and presents an opportunity to create a network effect amongst local cyclists. The Real Bikers would need to have their own exclusive interface separate from those on stationary bikes to make this truly powerful. If done right it can become a valued platform for cyclists to meet other local cyclists to ride with in real life, to share data with, to virtually compete against, and to source information about local races, bike shops, trails, etc.
Demand for fitness solutions continues be robust but the question remains if Peloton will become THE interactive fitness platform or just one of many. Creating programming for body weight exercises and an app that tracks outdoor running shows their intent to become the to-go platform but their success hinges on their ability to offer something unique to every member. Integration with a person’s favorite Instagram fitness guru is a daunting task but also represents a new path of monetizing the platform. Competitors that can better serve niche audiences will likely relegate Peloton to just one of many interactive fitness platforms.
Nintendo is slated to continue their interest in physically engaging their users. Between Wii Fitness & Pokemon Go they have been gamifying fitness for over a decade. Just days ago they released a promo video for Ring Fit, with demonstrators running, jumping, squatting, and squeezing with their new piece of hardware. These simple body weight movements may not seem like much of a workout compared to a Peloton bike but it is a genuine workout to non traditional fitness markets like retirement communities, people with disabilities, and after school programs. Who has a bigger and more reasonable TAM for an interactive fitness platform: Nintendo or Peloton?
Buy our product and get fit in your living room! It’s an old and tired sales pitch and yet here we are with Peloton. They’ve tried to market it as a luxury good but how does a stationary bike or treadmill improve the aesthetics of a room? Will they continue to build more equipment in a pursuit to become the home gym of the future? Their interactive platform boasts classes and instructors for body weight movements and yoga but is this enough for someone to become a member? Perhaps for body weight movements the interactive platform of the future will be something based in AR – like The Mirror. Perhaps Peloton will remain just a toy for the wealthy.Perhaps people will just sign up for a gym membership .