- SoulCycle vs Peloton Bike Pricing Compared : Which Model is Better?
- Click here to enlarge graph
- Peloton Cracks the Code on Hardware-to-Subscription
- Choosing at-home workouts over gym-timidation
- It Seems Everyone—Even the President—Has a Peloton. Is it Time for You to Get One?
- Kicking and Screaming
- Stream Your Spin Class At Home
- My Love Hate Relationship with Instructors
- Live or On Demand
- Tapping Into Your Competitive Nature
SoulCycle vs Peloton Bike Pricing Compared : Which Model is Better?
SoulCycle kick-started a national spinning craze. Its many imitators and acquisition by Equinox earned it a high-profile status in the fitness world. Newcomer Peloton decided to ditch the studio in favor of streamable spin classes you can do at home.
Which business model will go the distance? In this episode of Pricing Page Teardown, Patrick and Peter dig into data from more than 2,000 SoulCycle and Peloton customers to break down the battle for two-wheeled dominance.
SoulCycle has the brand recognition and the devoted community. Peloton has a tight handle on recurring revenue and appeals to those who prefer to sweat in solitude. Both companies are going after the same group of wealthy fitness fanatics.
But just how much are people willing to pay for fancy fitness, and do each of these brands deliver what users want? Watch the video to find out how the spin juggernauts are bringing in revenue, cornering their markets, and spinning up value for their sweaty fans.
SoulCycle Captures the Upper End of the Market
Both SoulCycle and Peloton are tapping into a niche audience for luxury fitness. When we surveyed 2,122 current, former, or prospective SoulCycle and Peloton customers, we found that customers were willing to pay between about $30 to $100 per month for spin subscriptions. The thing is, SoulCycle customers pay that amount per class.
As Patrick puts it,
“The willingness to pay is about the same for unlimited, and SoulCycle customers are paying so much more for the experience.”
SoulCycle started in 2006 as an alternative to “fitness routines that felt work.” There are now 80 SoulCycle studios scattered throughout the U.S. and Canada. A SoulCycle subscription requires less commitment than a traditional gym membership.
Classes are purchased individually or in bundles, making it easy to work out ad hoc. Bundles offer a slight, but not very significant, discount to the base price of $30–$34 per class (the 30-class pack comes out to about $28 per class).
All classes and packages have an expiration date, so customers are faced with a “use it or lose it” deal.
SoulCycle has executed an extremely successful branding strategy that includes wholesome taglines, such as “Find your soul”; uplifting yellow branding; trendy workout apparel; and a robust social media presence.
On Instagram, #soulcycle has 316K posts, #findyourSOUL has 36K, and #soulstyle has 26K.
Its community-building efforts have paid off: SoulCycle has been called a “cult” by the s of Harvard, and the New York Times did a story about “crazy front-row [people]” who book spin spots groupies buy concert tickets.
While overall price sensitivity is about the same for Peloton and SoulCycle customers, SoulCycle is able to capture die-hard spinners with deep pockets at a high price point. Our survey showed that SoulCycle customers who spin every day of the week are willing to pay the studio up to $300 per week.
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The differentiating factor for SoulCycle is the in-studio, in-crowd experience.
SoulCycle customers value the camaraderie and competition that come from proximity to a couple of dozen other exercisers, and the up-close-and-personal motivation from instructors.
Customers get to be part of an “in” group that has its own lingo, “tapping it back.” They leave their phones and cares at the door to enter a dark, candlelit room for 45 minutes.
Though poised to IPO, SoulCycle could face some problems with its business model in the future, especially as Peloton picks up speed. For one, it's simply too expensive, especially when you compare the price of $34 per class to Peloton's $39 per month of unlimited classes.
Secondly, it will become harder and harder for SoulCycle to secure recurring subscribers. Customers who want variety in their workouts may find themselves drifting toward other boutique fitness options in the $40 range, from treadmill runs, to prison-style workouts, to boxing, to bootcamps. True commitment-phobes may choose ClassPass, which has plans that start at $45 per month.
Lastly, it will be tough to draw increasingly connected customers to a brick-and-mortar experience. As fitness hardware and software improve, people will begin to expect workouts that are more personalized and flexible. If SoulCycle fails to keep up with these demands, they may lose their elite customer base.
Peloton Cracks the Code on Hardware-to-Subscription
When it arrived on the spin scene in 2012, Peloton presented a novel business model: Customers pay $2K for a stationary bike upfront and then follow up with a $39 monthly subscription for unlimited virtual classes. Classes are streamed via a screen attached to the bike, and the monthly cost applies per bike, not per rider, so an entire household can use it.
Patrick points out the fascinating thing about this is:
“They have kind of cracked the code on the hardware-to subscription model. You have to go through the bike and accessories in order to get to this particular subscription.”
Peloton also offers a cheaper option not advertised on its pricing page. If you buy your own bike, you can download the Peloton app for iOS and stream unlimited classes on your iPhone or iPad for $13 per month.
At a little over five years old, Peloton is already drawing in more revenue than SoulCycle, with much lower overhead — no studio leases or amenities, no cleaning or front-desk staff. Peloton reported $170 million in revenue for 2017, with 250K subscribers and 500 employees, whereas SoulCycle reported $118M with 383K subscribers and 1,200 employees.
Peloton's hardware-to-subscription model is not easy to pull off. It has led to some spectacular failures in Silicon Valley, including, perhaps most famously, Jawbone and Juicero.
Peloton customers are able to justify the high cost of the bike with the subscription price: $39 for unlimited classes is incredibly cheap when compared to SoulCycle and its ilk, as well as luxe gyms Equinox, which cost around $200 per month.
Even using the Peloton bike a few times per month compares favorably to boutique studios.
Peloton's product offerings seem to stand in direct contrast to SoulCycle's when it comes to feature/value preferences. With Peloton, “community” is virtual and optional. If you don't want to join the cult, you don't have to.
You can view the leaderboard if you want, or you can turn it off. You can join groups with other enthusiasts or follow instructors, but social media is not necessarily a selling point. Peloton is also more accessible and convenient than a studio class.
You get to work out on your schedule, at home, without waiting for popular classes or instructors (with a few exceptions). It's more personalized as well: Your bike tracks your progress and learns your preferences.
You can choose from a variety of spin workout styles and get any workout on-demand.
Despite the contrast, the value matrix for SoulCycle and Peloton reveals interesting findings about both:
Choosing at-home workouts over gym-timidation
While SoulCycle has built a spin empire, right now we believe there's a much larger opportunity in the Peloton model. From the customer perspective, Peloton is a cheaper, more convenient option that removes typical barriers to entry for working out. With Peloton, you don't have to commute to a studio or face gym-timidation from more experienced exercisers.
From an investor perspective, Peloton also wins. Peter and Patrick agree that Peloton is reinventing the at-home gym, and they find it promising that people are actually using the equipment and tuning in to classes.
And there's potential for a more open communal experience online. As Patrick puts it:
“Now we can be in a world where you and I went to that Peloton class this morning, and we're on opposite coasts. That's fascinating.”
There will always be a market for luxury gyms SoulCycle and Equinox. But for people who still want a rigorous workout with top-quality instruction, Peloton offers its customers more freedom and power to build a fitness regimen that works for them at a great price.
It Seems Everyone—Even the President—Has a Peloton. Is it Time for You to Get One?
Peloton made the news this week, as it was revealed that our new president starts his day with a pedal on the stationary bike that revolutionized home workouts with its streaming spin classes. Though Biden may love his work out; security experts aren’t so sure. They’re worried that the interactive technology on the bike could make the White House vulnerable to cyber snoops, or worse.
Having a fan in the highest office in the land is a boon for Peloton, which has always had haters and the doubters.
Early on some sneered at the expensive bike that allows people to work out in their home versus going to the sweaty gym where they have to mix with…uh…other people.
But now, when no one can mix with anyone, it seems Peloton was on to something (and indeed the stock has been rising lately).
Still, even now, or especially now with the economy in shambles, you have to look at the price tag and ask, is Peloton worth it?
Kicking and Screaming
Well, consider this. Pre-2016 you had to drag me kicking and screaming to a spin class. Why? I needed earplugs and a Xanax to get through cycling because of the loud music and migraine-inducing lights that my 20-something spin instructor favored.
Now, when no one can mix with anyone, it seems Peloton was on to something all along.
And my husband, Bill? Well, his workout mantra was always “I only run when chased.” That always got a laugh at cocktail parties, but he wasn’t laughing when his doctor ordered him to get more exercise and lose weight if he wanted to avoid diabetes. Nearly every single adult in his family has Type 2 diabetes. It was his doctor was Darth Vader saying, “Bill, it is your destiny.”
So for a pair of empty nesters who hate the gym yet needed help with their health, what option did we have? Well, a Peloton bike.
Even though the Peloton price—$2,000 plus a monthly $39 membership—gave me pause, we decided it would be our holiday gift to ourselves a couple of years ago. Now, when I think about whether the Peloton is worth it, two years in I can answer a resounding, “Yes.” But before I explain why it’s a yes from me, let’s get you up to speed on exactly what Peloton is and what it can do for you.
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Stream Your Spin Class At Home
Never heard of Peloton? You might have seen their commercials with impossibly fit and sweaty people riding a spin bike at home. Or maybe you’ve seen one of their mall showrooms.
What sets Peloton apart from other bikes is the fact that each comes with a 24-inch monitor—or tablet, as it’s called—mounted in front of the handlebars and that streams live spin classes from the Peloton studios in New York City. You can also do classes On Demand.
You also get a free pair of spin shoes when you buy a Peloton bike. Great, if there is just one of you. But since Bill and I both ride, he took the free pair, and I ended up getting a pair of my own.
Because I have wide feet, I bought what are technically mountain biking shoes on Amazon.com. Mountain bike shoes tend to be wider, they were way cheaper than the shoes I saw at my local cycling shop.
When you boot up the Peloton tablet, you’ll see a screen of in-progress or upcoming live classes, with audition-worthy headshots of the instructors. (Many are former actors and dancers.) You can also choose from popular On Demand classes sorted by class length (20-60 minutes), instructor, or musical genre.
Recently, Peloton added new user-friendly features, such as allowing you to search for classes your favorite music. Mumford and Sons or Madonna? Your search results will show the classes that have that music played in them.
Peloton has also added themed training programs, such as Climb Rides and Tabata (short bursts of activity followed by even shorter rest periods—ouch) for people looking for a more structured workout.
My Love Hate Relationship with Instructors
The author getting a work out in her living room.
I ride two or three times a week, sometimes four. Bill rides two to three times a week as well. At this point I’ve spun with nearly every Peloton instructor—there are about a dozen.
Then in Fall 2018, Peloton expanded to add British spinning instructors, but I haven’t tried any yet. In 2018, Peloton introduced the Peloton Tread, a high-tech treadmill version of the Peloton bike.
With it came more instructors offering boot-camp classes as well as running and walking instruction that you can do on your Peloton Tread or outside using the Peloton Digital app.
Want to hack the whole Peloton thing? Pay for the Peloton Digital app only (under $20 per month) and use it on your phone with your own gym equipment.
Peloton owners myself, who’ve had the equipment prior to the app’s release in summer 2018, access it as part of our monthly subscription fee.
It’s a great option for when you’re traveling and want to get in your workout but your hotel doesn’t have a Peloton bike.
But back to the instructors, some of whom I love and some of whom I hate. One instructor does this weird jaw thing as she rides, she’s blowing imaginary smoke rings. She might as well be scraping her perfectly painted nails down a blackboard. Another leads her class while wearing Lady Gaga-esque makeup. I rode with both once and never again.
My husband is terrified of instructor Robin Arzon, tatted and with a kick your ass and take no prisoners attitude. She’s achieved a certain level of celebrity, thanks to this New York Times article.
Technically, she’s Peloton’s VP of Fitness Programming; I enjoy her boot camp approach. My two faves are Christine D’Ercole, who plays tons of 1980’s music and knows her shit—she’s a world-class competitive cyclist.
Then there’s Jenn Sherman, who has a series of sing-along rides filled with karaoke-worthy tunes. (You can search for “sing along” using the aforementioned, newly introduced search feature.
) When you are singing Neil Diamond’s “Sweet Caroline” or Billy Joel’s “Piano Man” at the top of your lungs, you forget you are exercising. Perhaps I both Christine and Jenn because they are clearly Gen Xers. I feel they “get” me and my generation.
I also enjoy Matt Wilpers‘ sweet demeanor and Denis Morton‘s hysterics. There’s nothing doing a heavy metal ride with Denis and having him take his long hair its ponytail and do some head banging and hair swinging while leading class.
Live or On Demand
When you join a class (live or On Demand), a leaderboard appears on the right-hand side of your screen, showing the usernames of everyone else in class.
You can follow people on the leaderboard by clicking on their name and tapping “follow.” Peloton awards you badges after a ride how many “friends” you’ve ridden with.
If you d gold stickers back in elementary school for a job well done, you’ll love this feature, too. Or at least I do.
You can also high five other riders by double tapping their profile pic on the leaderboard. You’ll see high fives come back to you on your screen when someone sends one out to you. It is literally a tiny hand “slapping” on your screen. These can be great for building camaraderie and getting you through tough classes.
Many people create clever usernames so that instructors will give them a shout-out—instructors also have tablets in front of them. Names that stick out include “Mazel Tough” and “Mom Can’t Hear You.” Your username also includes your age and hometown, or you can replace it with hashtags related to certain instructors, Sherman’s popular no-excuses phrase “Just fucking do it” or #JFDI.
Speaking of shout-outs, you also get them when you hit milestone rides—50 rides, 100 rides, 150 rides, etc. Getting a shout-out—which will live on in eternity when the live ride goes into the Peloton archives as an On Demand class—has inspired me to hit my milestones on a regular basis.
I still remember my first one: It was ride number 50, which I did live during Christine’s New Wave Wednesday class. Sure enough, she congratulated me. I felt a kid all those years ago watching “Romper Room,” waiting to hear my name. You’ll also get shout-outs on your birthday.
Right now, I’m trying to time my 350th ride to coincide with my December birthday so I can get twice as many in a single day.
The Peloton screen also shows your heart rate as you ride. That meant I needed a heart rate monitor if I wanted to take advantage of this metric. My athletic 21-year-old daughter swears by the Polar monitor that you wear on a strap around your torso and right under your bra. So guess what her mother ended up buying and wears with each ride?
Read More: Getting in the Best Shape of Your Life After 50
Tapping Into Your Competitive Nature
Because I don’t have to worry about getting to the gym in time, fighting traffic, finding parking, or getting a spot in the spin room, I’m working out more.
The leaderboard, which measures your output throughout the ride—the sum of the resistance on the wheel and your cadence or pedal speed—is also designed to inspire riders’ competitive nature. While I’ve never been in the number one spot, I always strive to be in the top 50 percent of riders.
So if there are 218 riders in a class, I don’t let myself fall below 109th. There have been times that I’ve seen a 30-something or 40-something on the leaderboard who seems to be “catching” me, and I end up thinking, damned if I’m gonna let a young un pass me.
So I spend the remainder of the class working to stay ahead of them.
It’s good that I’ve started riding at home: I realized that I’m a grunter when I exercise. It sounds somewhere between labor pains and orgasm, which is not great when you’re at the gym.
But in the privacy of my own home, it’s not a big deal, at least to me. It’s gotten to the point that whenever I climb on the bike (it’s in the living room), my husband leaves the room.
It’s either because of the grunting or the fact that I’m singing while I ride.
I’ve since started wearing Insignia Bluetooth headphones during my rides.
They sit over my ears, not in my ears; I found that earbuds always fell out so, tip, don’t use the free pair that came with your iPhone.
I’m loving these headphones because they hold their charge for weeks on end, are super comfortable, and ensure Bill doesn’t have to listen to class while I ride. I can’t say the same for my singing.
Because I don’t have to worry about getting to the gym in time, fighting traffic, finding parking, or getting a spot in the spin room, I’m working out more. And because I’m not enduring loud music and stupid lights, I’m enjoying it more.
That leads to tangible results.
In the first year of using the bike, I felt new muscles in my butt and legs, and because many classes include 10 minutes of arm weight lifting while on the bike (the hand weights are mounted on the back of the bike), I saw definition there, too.
In year two I’ve noticed my waist getting smaller, not larger. That’s a miracle given all of the other perimenopausal symptoms my body has been throwing at me. My husband has benefitted, as well. He’s gone down two belt sizes and his doctor no longer considers him to be pre-diabetic.
So again, you might ask, is Peloton worth it? Well, with good music, great workouts, and better health—there is only one way to answer that question: yes.
Leah Ingram has written 14 books, including Suddenly Frugal: How to Live Happier and Healthier for Less and Toss, Keep, Sell! Her 15th book is The Complete Guide to Paying for College.
Leah is a money-saving expert who has shared her unique personal finance approach and advice about getting the most bang for your buck on local and national TV, including The Weather Channel, Good Morning America and ABC News Now.
She’s also written on personal finance, travel, business, education and health topics for Good Housekeeping, AARP The Magazine, Delta Sky, Costco Connection and Parade.com.
A version of this article was originally published in September 2017.