Author Topic: PTON - Peloton  (Read 19214 times)

Broeb22

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Re: PTON - Peloton
« Reply #170 on: September 15, 2020, 02:04:06 PM »
What's the metric(s) that tell you PTON is not gaining traction with subs?

I guess that's churn really, but bad churn numbers can be masked by fast growth for a while.

Maybe subscription revenue growth not growing as fast as Product Revenue?



Gregmal

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Re: PTON - Peloton
« Reply #171 on: September 15, 2020, 02:26:16 PM »
I mean 50% of the entire workout universe is a little bonkers. But hey, you never know.

What I do know is that many people go to the gym with friends. Many go to get out of the house/office. Many go for the atmosphere. This can not be replicated online/at home. Additionally, how much of the TAM is compromised by the household subscription? In other words, how much of that TAM makes up people with similar interest/an active household? If the husband, wife, a one of the teenagers is a hardcore fitness enthusiast(excuse my use I the traditional family, dont be offended..) thats great value for them, but poor value for PTON relative to the single career focused female living by herself. Or the new mother determined to get back into shape with the fat husband who never gets off his ass. Sure, they have levers, but just assuming they'll take huge share of the entire gym goer universe is a little bit of a stretch. This is also the flaw in the Netflix comparison. America is a fat and lazy country. Sit on you ass and chill with a huge video catalogue is definitely not the same market or value proposition as ride a bike and sweat hard for 30 minutes at 3x the monthly cost. The biggest thing with working out/gym memberships is that a very large number of those people really do not enjoy going, at all, which eventually leads to fatigue with the product/service.

Where I would focus, but hey its just me, is pushing hard for partnership subsidies for users much like AAPL has with the iPhone through carriers. Perhaps offer incentive for employers/health insurance providers to make this available to people in exchange for some sort of benefit. IE lower rates as it promotes a healthy lifestyle or whatever. Find someone to make $2k upfront affordable the same way AAPL found a way to make $1200 phones consumable every 24 months. Otherwise, the user base, at least in my eyes, is much smaller than people seem to believe right now, at a $25B valuation. Buying $100 leggings(LULU) or $7 lattes(SBUX) is much different than spending what for most folks is 1-2 months rent on a stationary bike...


LounginMKL

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Re: PTON - Peloton
« Reply #173 on: September 15, 2020, 06:02:41 PM »
This is also the flaw in the Netflix comparison. America is a fat and lazy country. Sit on you ass and chill with a huge video catalogue is definitely not the same market or value proposition as ride a bike and sweat hard for 30 minutes at 3x the monthly cost. The biggest thing with working out/gym memberships is that a very large number of those people really do not enjoy going, at all, which eventually leads to fatigue with the product/service...

...Buying $100 leggings(LULU) or $7 lattes(SBUX) is much different than spending what for most folks is 1-2 months rent on a stationary bike...

I thought about it some more and I agree with your above points. Pricing aside, it's much easier for users to continue their subscription/ repeat buy if it is an indulgence (NFLX/SBUX/CMG/LULU). Investing in PTON has to come with some opitmism that people will stick with their aspirational purchase, which historically has not been a good bet...

Love the product and the user base, but hard to invest at this valuation... But hey, isn't this your typical growth investing conundrum!?

Disclosure: No position in PTON

LounginMKL

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Re: PTON - Peloton
« Reply #174 on: September 15, 2020, 06:06:43 PM »
Probably belongs to APPL thread as well -

https://www.nytimes.com/live/2020/09/15/business/stock-market-today-coronavirus/apple-plans-a-digital-fitness-subscription-as-more-people-work-out-at-home

This could either be taken as "hey, it's a proven market if AAPL is involved" or "f**k, AAPL is involved."

misterkrusty

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Re: PTON - Peloton
« Reply #175 on: September 16, 2020, 08:44:58 AM »
Quote
Doesn't seems promotional to me. The guy genuinely believes in this. One can read his interview with Time magazine in May of this year (https://time.com/5839552/peloton-ceo-john-foley/ ). I think he is repeating this in his head and saying the exact same thing. Entrepreneurs are like that, they have to imagine and believe in something that usual folks cannot.

@patience_and_focus    are you out of your mind?  Just because someone repeats something does not prove that they really believe it.

Yeah, Foley can "imagine and believe in something that usual folks cannot"   Dude, take it easy on the kool-aid.  Do you know how much acid is in that shit?

Castanza

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Re: PTON - Peloton
« Reply #176 on: September 16, 2020, 10:17:48 AM »
Quote
Doesn't seems promotional to me. The guy genuinely believes in this. One can read his interview with Time magazine in May of this year (https://time.com/5839552/peloton-ceo-john-foley/ ). I think he is repeating this in his head and saying the exact same thing. Entrepreneurs are like that, they have to imagine and believe in something that usual folks cannot.

@patience_and_focus    are you out of your mind?  Just because someone repeats something does not prove that they really believe it.

Yeah, Foley can "imagine and believe in something that usual folks cannot"   Dude, take it easy on the kool-aid.  Do you know how much acid is in that shit?

LOL Tech Crunch Disrupt is a great example of this. Every wide eyed coder who steps foot on stage either begins or ends with the tag line "our revolutionary tech will change the world".

The world is not short on overly optimistic entrepreneurs who deeply believe in their products.
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D33pV4lue

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Re: PTON - Peloton
« Reply #177 on: September 16, 2020, 01:05:45 PM »
What's the metric(s) that tell you PTON is not gaining traction with subs?

I guess that's churn really, but bad churn numbers can be masked by fast growth for a while.

Maybe subscription revenue growth not growing as fast as Product Revenue?

TBH it is likely that you won't have normalized churn #'s for 2 years. This is just a guesstimate of mine but considering the high cost of the product and that fact that most are purchased using the 3rd party financing option (Affirm) and have 12, 24, and 39 month installments. I find it hard to believe that people will cancel their subscription while still paying for the bike. In addition >50% of the subs have been added in the last 6 months so the earliest possible subs to cancel would have had to buy in March using 12 month payment plan (I would also assume most people choose the 24 or 39). You also have to think that some people can pause their subscriptions for up to 3 months but aren't included in churn so there could be some lag. 

fareastwarriors

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Re: PTON - Peloton
« Reply #178 on: September 21, 2020, 09:57:59 AM »