One of the relatively smaller announcements yesterday came from an unlikely partnership.
Peloton revealed that it had partnered with Google Fitbit for a “multi-year, multi-country” partnership. Per the Peloton Blog it begins in September.
So here’s what the deal means for both sides.
For Google Fitbit Premium members ($9.99/mo or $79.99/yr):
- Access to classes across more than 10 Peloton workout categories including Strength, Pilates, Running, Boxing, Cycling, Barre, and more
- A select group of Peloton classes will be available to Fitbit users without a Premium subscription
For Peloton members ($12.99/mo or $129/yr):
- Special Google Pixel Watch and Fitbit Charge 6 device offers
“We’re thrilled to bring Peloton’s classes and world-class Instructors to Fitbit users, and continue to establish Peloton as a one-stop shop for all types of fitness content,” said Greg Hybl, Senior Vice President and General Manager of Peloton for Business. “Together we share a commitment to make health and wellness more accessible and ensure even more people can reach their fitness goals.”
The partnership is available to Fitbit Premium members in the US, UK, CA, and AU.
The Big Question: Imminent Peloton Acquisition?
The partnership itself doesn’t appear to be that substantial. Peloton members basically get close to nothing, with “special” offers only. Really this is more of a Google-centric content deal. Fitbit Premium members now get access to a swath of new content. That’s a nice bonus, especially for existing members. You now have a whole bunch of new classes to browse and enjoy — the variety will be welcome I’m sure.
For the Peloton brand, at least it now gets in front of more potential customers. Maybe a Fitbit Premium member will like what they see and explore a little further into the Peloton ecosystem. Maybe, having piqued their interest, would-be buyers will explore the hardware side including the Bike, Tread and Row. Those still require Peloton direct membership, something called “All-Access Membership ($59/mo). I suspect for Peloton management part of the idea here is not only brand exposure, but the potential for a hardware-side up-sell and accompanying subscription (the real gravy!).
But, of course there’s the bigger picture.
And that’s the ever daunting question about the future viability of a standalone Peloton company (NASDAQ: PTON).
The infamous pandemic stock has fallen hard (like so many of its Covid peers), as have its financials. If I were to armchair quarterback I’d say they mis-forecast demand, expanded too quickly, and overloaded inventory with too much hardware, creating a logistical supply chain nightmare that further strained balance sheets and income statements.
Regardless, Peloton is still a widely recognized brand. Think spinning at home and you automatically think Peloton.
Many have speculated as to a future buyer.
Apple seemed to, at one time at least, be a name rumored to have interest in Peloton. Pure conjecture, however. Nothing official has ever been revealed — at least as far as I can tell.
So with the Google move, it would appear Apple would be off the table. Likely Amazon too.
Perhaps this is a trial run to see how exposing Peloton content to Fitbit members impacts cross-selling. If over the next year there’s material upside on the Peloton side, that recurring revenue associated with the Peloton Bike, Tread and Row machines could be seen as an opportunity to bolster and grow annual recurring revenue for Google. Compared to its advertising and mobile businesses it might not amount to much, but this might be more of a margin play than anything.
As of this writing, Peloton’s market cap is a pretty miniscule $1.07B USD. For companies like Google, Apple, Amazon, and other major tech players that’s a drop in the bucket. Cost isn’t an issue. Overhead might be, and the risks that come along with inventory and supply chain challenges that Peloton Interactive, Inc. brings along with its core business.
This will be an interesting storyline to follow. While not a big deal, the initial partnership could portend things to come. Or not.
