Peloton takes a surprise move to counter falling stock prices

It’s been a tough year plus for Peloton. Struggling with shipping delays and product safety issues, the fitness company recently made headlines after its laid-off employees crashed new CEO Barry McCarthy’s first all-hands meeting. Now, with McCarthy at the helm and stock prices continuing to fall, the company is rethinking its strategy — raising subscription fees and lowering device prices for the first time, reports CNBC.

In a previous interview with CNBC’s Jim Cramer, McCarthy, a former Netflix and Spotify exec, said cutting costs in key areas could go a long way toward generating more recurring monthly revenue. “I think there is a tremendous opportunity for us to change the business model and increase sales dramatically [total addressable market] for new members by lowering entry costs and playing around with the monthly recurring revenue to upfront ratio,” McCarthy said.

See Also: Peddling Up a Steep Hill: Peloton is swiping thousands of workers and offering them a free 1-year subscription

On June 1st, Peloton’s all-access subscription price will increase from $39 to $44 per month in the US and from $49 to $59 per month in Canada. It remains the same for international members, and for people who don’t own Peloton gear, the plans will still be $12.99 per month.

Yesterday, Peloton reduced the prices of its connected fitness bikes and treadmills. The price of his bike dropped from $1,745 to $1,445, including a $250 shipping and setup fee; the Bike+ from $2,495 to $1,995; and the Tread machine from $2,845 to $2,695, including a $350 shipping and setup fee.

Related: Reports reveal that 2 major brands are considering buying Peloton

The company is also experimenting with a lease option in select US markets; Users can pay a monthly fee ranging from $60 to $100 to rent a bike or bike+ and access Peloton’s library of workout content.

Peloton had 2.77 million Connected Fitness subscribers as of December 31 and has more than 6.6 million total members.

Peloton was down 4.63% as of 11:36am ET today. Peloton takes a surprise move to counter falling stock prices

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