Fear not, I wasn’t saying you were crapping on them. More of a preempt note. A pre-crap if you will. 
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There is zero advantage and only downsides to Peloton doing this…they have a captive audience with a massive retention rate. If you give them the option to step outside their ecosystem, you risk losing them forever.
Peloton acquiring Zwift would make that a different proposition, obviously and the only way it would make sense.
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Very reasonable viewpoint.
With a $24B market cap, $1.7B in cash and marketable securities, and having turned the corner on profitability, I would imagine that their M&A/Bus Dev and marketing teams are busy investigating several areas of expansion. Zwift does seem like a natural fit.
They may be well built, but they would need to be retro fitted to have any sort of power meter that could put it even close to a TR setup. Spin setups and classes don’t really lend themselves to being used the same way TR setups are or even dedicated bikes like the Wahoo, Stages, etc. Does that mean they won’t get there eventually? Nope, but that doesn’t appear to be their market for this particular hardware release.
Absolutely. This is why some use power meter pedals to do TR. Dialing the knob instead of erg mode is a real pain though.
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Our gym replaced the Spinning® stationary bike with Stages SC3 bikes, and those are pretty darn easy to use and they have built-in crank based power meters. There is a lever with 3 primary resistance settings, and then a knob to fine tune resistance. Its really easy to use the “3 speed shifter” to do 40/20s, 30/30s, and everything else like this Xert “We Will Rock You” team time trial simulation (5x 30-sec on/off and then a hard pull, drop, and latch back on):
Did that in the gym by loading workout into Zwift on my phone. But could do that just as easily with TrainerRoad or just using my Edge 530 bike computer. Those Stages SC3 stationary bikes are really sweet.
On the other hand the Spinning® bikes have no power meter and just a single resistance knob, trying to do 30/30s or 30/15s or 40/20s sounds terrible.
Except neither company is in the tech industry.
Peloton is in the fitness industry and TR is in the cycling industry.
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The reference to tech was simply meant simply to refer to the experience of assessing company’s products and markets in the fastest growing and largest sector in all of business. And tech is not standalone - it has fundamentally changed virtually every other business sector, from financial services to automotive to agriculture. And yes, even cycling and cycling training have changed massively due to tech, including Peloton and TR, neither of which would exist without it.
As for characterization of Peloton in the fitness industry and TR in the cycling industry, many analysts, the media and companies themselves try to define the companies as they choose. However, ultimately it is the customer who decides what to purchase which is really what matters. If your characterization that Peloton and TR are in different industries and therefore there is no overlap, I think this topic has been well covered earlier.
My take in the whole situation is that TR, Zwift and Peloton do have a very passionate user base.
TR i see is as an app geared for people who their only requirement is structured well defined workouts.
Zwift can give you do, but its bread and butter is racing and the gaming. So users who do Zwift (or combine Zwift and TR) is because they want to “game” while they do indoor cycling.
Peloton could also do what TR does, but again, the bread and butter is the spinning class. Their whole thing was started as an alternative to VERY expensive spin classes. They are not trying (yet) to go for the cyclist training for a criterion, or a tri athlete training for Kona. They want the mom and dads who want to do wo at their home and are willing to replace the gym membership for a Peloton membership. Most of their user base is not looking for Kona or Nationals, or local bike races.
Yes there will always be a few people doing this for various reasons (mostly will be multiple people using one equipment), but I bet that of their whole subscription base, less than 1% do any cycling competitively. While the TR i would be willing to bet more than 50% are here for some form of racing. Zwift i would put it close to that as well… but since is more approachable (nice graphics and games) the casual cyclist groups might be larger.
It’s not that there’s no overlap.
It’s that there’s not enough overlap for Peloton to be a threat to TR.
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This was true when they started, but far from an accurate characterization today, particularly since they added strength training with both great instructors and programming breadth. They are rapidly expanding their "highly fit” athlete category and even replacing boot camps.
Even if your 1% guess is correct, that is 30,000 users as lost opportunity to TR. And the company is growing at well over 100% annually.
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You keep saying this, but it really only undercuts your argument. Yes, TR advocates for some strength straining, but doesn’t have any plans or workouts based on it. It is far from a core proposition of TR.
As I noted earlier, Peloton incorporating strength and yoga into their workouts indicates that they are moving away from a TR subscriber and towards the much larger general fitness market.
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A year ago when I posted the announcement of Peloton’s IPO, many TR users said there would either never be an overlap or at least not in the next 5 years. It’s only 1 year later and that armor has cracked. Even if @Joelrivera assessment is correct, that its only 1% overlap today (i.e. TR doesn’t care if it has lost a 30,000 person opportunity), what will TR’s situation be in a year from now when Peloton has once again grown at over 100% (which they have done so for 6 straight years). How about if the 1% increase to 2, 3 or 5% as “fitness” folks continue their large movement to making strength training (a key component of serious cycling training). Does losing 5% of 5 million customers (250,000) matter to TR?
Sure. But we are talking about the peloton BIKE, not the treadmill or the app, those are different products with 0 overlap with TR core business.
Fair. In that case, i would say even less than 30k users do ANY kind of competitive cycling training with a peloton. You will always find people who does, but it is rare.
I want to see how peloton manages once gyms reopen. They had a HUGE spike this year. With gyms close, a lot of people diverted their disposables incomes out of the gym to peloton. Its still too soon to determine how long they will last.
History is not in their side tho.
Too many stories of people who buy indoor bikes/treadmills/video workouts and they end up not using them.
If they can keep people engage with live events like they have been doing, they may be here to stay .
to my point about peloton growth,
this is pre pandemic and the world closing…
quarter after the pandemic…
there is a correlation here.
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Why is a Peloton user on a dumb trainer using the Digital Subscription (the app) have no overlap with TR?
I think you have to look at the full picture. The app is really cheap ($12.99/mo) and they are getting huge conversion from app users to bike purchasers (i.e. Peloton users try the app and get addicted to the Peloton experience and what the full bike experience has to offer)
History is exactly that . . . history and nothing more. Lots of examples of early failures in markets until you get breakout performances. The iPhone, for example, fundamentally changed all experiences with prior mobile phones and mobile data devices.
Different users here. Most people on TR got here because they knew exactly what they want out of their training.
Most people who use peloton are using it because they dont know about the alternatives, or because they want the name and brand and what peloton will give them on the bike.
Yes, there are people who have jump from Peloton to cycling, but you will not see many competitive cyclist jumping from TR to peloton, UNLESS they start taking endurance training more seriously. Thats the day peloton will become a problem for TR.
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One of the key things to recognize is that “correlation” does not equal “causation”. I would invite you to read the financial statements (if not the 10Qs and 10Ks) and listen to the company’s earnings calls, including the Q&A, to see if you come to the same conclusions that you have come to.
A year ago, before the Wall Street investment firms were able to comment on Peloton’s stock, the lower quality firms (e.g. Seeking Alpha) were stating that Peloton’s churn rate was well over 20% and possibly higher. When the real #s were published, they are an industry leading 5-6%. Peloton most certainly got a huge boost from the pandemic, but from a survey they did with their users post pandemic, the overwhelming results (discussed on an earnings call) were that there customers have no intention of going back to the gym post pandemic. They LOVE the Peloton experience.
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There is some overlap at the lower end of the TR’s market with the higher end of Peloton users that are branching out into competitive cycling or triathlon. But it’s a pretty small slice number of people at issue.
But - The real effect on Peloton on TR can be hugely positive. Think about this, would you rather be Nate today making the rounds trying to sell your bike based work out app company to investors or bankers and being able to cite Peloton’s stock performance, or would you rather been doing that five or six years ago when he was the only game in town speaking to (presumably) somewhat skeptical audiences. ("This sounds crazy, you’ll never get a large enough number of people to pay money to pedal in their basement . . . ")
TR may only be worth a fraction of what Peloton is worth. But the $ amount of that fraction is getting bigger and bigger all the time! Peloton’s little spin app and bike with the awful power meter is making Nate a very rich man.
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