Peloton (NASDAQ:PTON) has quietly removed its unlimited free-membership tier on its fitness app less than a year after it debuted because the initiative was failing to convert users into paid subscribers.
Peloton dropped the free option for new users, once a key part of the business’s growth strategy, within the past few weeks. People who signed up for the company’s unlimited free membership before it was removed will continue to have access to it, Peloton said.
New users who are looking to work out with the company’s app now only have access to two tiers that cost $12.99 a month or $24 a month, with the option of a seven-day free trial.
Last May, Peloton debuted a splashy rebrand that billed the business as a fitness company for all, and put its digital app at the center of its marketing campaign. The rebrand brought a new, tiered app strategy that included the unlimited free-membership option and two other paid levels that all had varying levels of content.
The rebrand came as CEO Barry McCarthy looked to transform Peloton from one focused on its hardware to a business that was equally as invested in its app. As sales steadily declined at the company, he was working to capture new customers who may have been intrigued by the brand but weren’t willing to shell out thousands for its equipment.
PTON shares dished off 17 cents, or 5.2%, to $3.12.
