Peloton Hikes Subscription Fees, Cuts Hardware Costs

Peloton will cut the price of its three main connect fitness products while hiking the cost of its subscription in an attempt to generate more recurring revenue.

As Bloomberg reported Thursday (April 14), the price of Peloton’s bike is set to drop $300, down to $1,195, while its higher-end Bike+ will now cost $1,995, a $500 price reduction. The company’s treadmill will also drop in price by $150, down to $2,345.

“We want more people to be able to afford our hardware,” Peloton said in a statement. “This is a strategic decision to play for scale and increase market share.”

Read more: Investor Blackwells Capital Renews Push for Peloton Sale

To offset the reduced hardware cost, the New York company said it will also raise its monthly subscription fees, the first such hike in eight years, from $39 to $44 per month in the U.S. and $49 to $55 per month for customers in Canada. Bloomberg said the price for international subscribers is not set to change for now.

“There’s a cost to creating exceptional content and an engaging platform, and this price increase will help us continue to deliver for our members,” Peloton said. “The price of hardware relative to the subscription is one of many levers by which we are looking to reduce barriers to entry.”

The news comes one day after reports that activist investor Blackwells Capital once again called on Peloton to put itself up for sale, claiming the company was struggling under the leadership of new CEO Barry McCarthy.

Blackwells — whose stake in Peloton is under 5% — argues the company’s brand, technology and subscriber base can be transformed into a more appealing business, but only if it’s no longer a publicly-traded one.

See also: Report: Peloton Activist Investor Plans Push to Fire CEO, Seek Sale

Blackwells had pushed for former CEO John Foley to be removed from his position earlier this year. He was removed from office in February and replaced with McCarthy, a former Netflix and Spotify executive.