Peloton has started a partnership with TikTok.
Courtesy: Peloton
Platoon launched a partnership with TikTok on Thursday as part of its strategy to change public perception and attract a wider range of customers as sales and profits decline.
The partnership will create a new fitness hub on the social media platform called “#TikTokFitness Powered by Peloton.” It includes short fitness videos, longer live classes, content from Peloton's instructors, and collaborations with TikTok creators.
Shares of Peloton rose about 10% in pre-market trading after the news was announced.
It comes about six months after Peloton rebranded itself as a fitness company “for everyone” and launched a tiered pricing strategy for its app. The changes were intended to position Peloton as more than just a bike company and to attract new customers who might not be able to afford the expensive connected fitness equipment but might be interested in a monthly subscription for its content.
“On the one hand, there's a longer-term goal of changing the perception of who Peloton is for across multiple different types of audiences, and I think one of the real strengths of TikTok… is that it increasingly allows everyone reached, including the younger audience,” Oli Snoddy, Peloton's vice president of consumer marketing, told CNBC in an interview. In the short term, the partnership will look to build on what Peloton says has been a successful relaunch by improving metrics like app downloads and conversions, Snoddy said.
During the Covid-19 pandemic, Peloton became a darling of Wall Street after gyms closed their doors and consumers flocked to their home exercise bikes and treadmills. But demand plummeted as the virus receded and consumers returned to normal.
In the three months ended September 30, Peloton lost 30,000 members and revenue fell to $595.5 million, compared to $757.9 million three years earlier, at the height of the pandemic.
Peloton CEO Barry McCarthy, who replaced company co-founder John Foley in February 2022, has been working to increase the size of the company and establish long-term growth and profitability. He has focused on growing Peloton's subscriber base and opening new avenues to Peloton equipment ownership by offering a rental service and refurbished options.
While the initiatives are showing early signs of progress, Peloton still isn't making any money from the members it has, partnering with companies like TikTok and Lululemon crucial for long-term success.
“We have over a billion users around the world, from all demographics,” Sofia Hernandez, TikTok's Global Head of Business Marketing, told CNBC. “People from 16 to 60 years old are standing on the platform and when I think about it [Peloton’s] 'anyone, anywhere' campaign, there's no better place to reach that level of audience that we have, that level of diverse audience.”
Hernandez noted that the partnership will go beyond workout videos and will include “behind the scenes” videos such as “get ready with me” clips and other fitness-related content that gives people on TikTok a behind-the-scenes look at Peloton and its instructors . Initially, the content will feature well-known instructors such as Cody Rigsby and Ally Love, but the partnership also hopes to introduce some of Peloton's lesser-known instructors to a broader audience and grow their following.
“We know that when people experience Peloton, they really understand it, they fall in love,” Snoddy said. “This is really about sizing the instructors and the content that we have to a broader audience on TikTok.”
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