Yahoo Finance's Brian Sozzi goes inside Peloton’s year to remember, and takes a look at what 2021 may have in store for the fitness provider.
MYLES UDLAND: Zoom was named the Yahoo Finance company of the year but Peloton certainly another business that defined the markets in 2020. It also defined our lives in 2020. Brian Sozzi, I know that you had a great feature today on Yahoo Finance looking at the role that Peloton played not only in the lives of the market, not only how the instructors were affected but a couple of our colleagues here at Yahoo Finance have Pelotons, changed their routines during the pandemic.
BRIAN SOZZI: Yeah. Thanks, Myles. I really appreciate that. Yeah, this was a collaboration between myself and Yahoo Finance Deputy Managing Editor, Erin Fuchs and that story is on our homepage right now. It's long, it's in depth but I do have a couple takeaways from this story here. In talking to a lot of the executives at Peloton and again, also talking to a lot of our teammates here at Yahoo Finance who have really used Peloton aggressively throughout the pandemic to stay healthy and surely sane.
First up, no new hardware. In talking to all these Peloton executives I think this notion on the Street that Peloton is going to come out with a rowing machine, flying weights, boxing machines, it's just not going to happen. I think they are very focused on leveraging what they have, the treadmill and the spin bike and using those items to really essentially go to number two here on my list, improve the content, continue to improve the content, expand the number of users doing it that way.
We did learn in talking to the executives one way they're going to do that, Peloton will now be expanding into prenatal fitness care. They will be leveraging the experience of their head instructor Robin Arzón to help do that. She said she was pregnant, she announced she was pregnant in September but she's been videotaping and plotting out her journey and working on developing workouts for those with prenatal care and.
Then secondarily too, this notion that once we get the vaccine people are going back to the gym. I don't think that's going to happen. I think that's a large part why you see the stock up 30% in the past month. You talk to a lot of folks with Pelotons, you're going to have to rip these things out of their cold dead hands. It's just not going to happen. They do not want to go back to the gym, they like on demand classes and they're perhaps even willing to pay more. So I wouldn't even be surprised at some point to see Peloton maybe dabble with a little bit of price increase. They didn't tell us that was the case but it does seem like they have pricing power and a lot of it.
MYLES UDLAND: I saw they made a really interesting decision when they raised the price of the new bike and they cut the price of the existing bike. I think kind of a give and take there. Just quickly before we go, I wanted to ask about the talent because you brought up a couple of the instructors, Ally Love, Sam Yo, I mean, these people are celebrities in their own right.
I mean, they're not Jake Paul or Charli D'Amelio or these kinds of people but they have major followings. How cognizant is the management team of keeping these people happy? How important is it to a company like Peloton to make sure that their talent wants to stay with them and doesn't go to SoulCycle or some other kind of competitor that starts up?
BRIAN SOZZI: Well, Myles, Peloton, they don't disclose how much they pay their instructors but just talking to people in industry, these instructors get paid a good deal of money and again they put out a lot of content. But I think why you're seeing the Peloton brand cross over into mainstream, a lot of these instructors they've developed a real close personal bond with a lot of their users just coming through their screen. One thing we have heard from talking to a lot of Peloton users that they don't body shame the people on the bike. They're very welcoming, they're inviting, they're friendly, they carry that brand onto their social media accounts and that's why they're able to keep that user base and then ultimately grab new ones.
MYLES UDLAND: You know, I think when Peloton came to market a lot of people were skeptical but all the cliches around community building, building a platform, expanding the addressable market, all those things have come true for Peloton. You've got to give the company a lot of credit for capitalizing on a very lucky, unfortunate scenario, the pandemic certainly executed their way through it and grown the business as a result.