The Verge: Why Everything Is a Subscription with a Look at Sphero and Peloton

Selling a gadget isn’t enough anymore. Creators need to find a way to keep revenue coming in, even after they sell a device.

Ashley Carman reports on recurring revenue and subscription services, and why subscription services might be the key to keeping hardware businesses afloat.

Toy robot company Sphero experimented with turning the robot into a gaming device, but then the company decided to concentrate on developer tools and make the robots into coding toys that would appeal to schools. Sphero is in 40,000 schools.

Companies like Peloton sell the fitness hardware (an exercise bike or treadmill), and also a subscription service to go along with the hardware. Peloton’s bike doesn’t compete with the standalone bike available at Costco. Peloton’s bike and its subscription service competes with the spin class at the local gym.

Peloton’s stationary bike was released in 2014 for $2,000 and contains a 22″ touchscreen to watch classes, which runs on a custom version of Android. The subscription fee is about $40 to $50 per month.

Classes for the bike are streamed live from Peloton’s cycling studio in Chelsea, Manhattan and uploaded to the company’s subscription service for future viewing. The studio is also open to the public for onsite classes.

See also …
wirecutter | Peloton Review: What to Know Before You Buy

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