THE TREADMILL WARS ARE HERE
Peloton built a billion-dollar business on stationary bikes. Now the company and its rivals want to disrupt the most miserable form of home workout.
The great thing about running is that it’s just one foot in front of the other, over and over again. Step outside and move for a while at a moderately faster pace than usual, and you’re rewarded with endorphins, mental clarity, and justification for that heaping portion of pasta later on. The awful thing about running is that it’s just one foot in front of the other, over and over again. Step on a treadmill, and you immediately itch for ESPN or Netflix and start counting seconds as they accrue—anything to distract you from the thump of feet on rubber and the sense that the belt will whir until the end of time.
Treadmill torture has been with us since the Victorian era, when the British civil engineer William Cubitt invented a machine to give prisoners something to do with their time and energy. As many as 24 prisoners could fit on the first treadmill, which resembled a giant log roller and powered a mill that ground corn. If this sounds like something that could catch on today as a boutique fitness class, maybe with a trendier crop such as coconut in place of corn, consider that around the turn of the 20th century, treadmills were mostly phased out under a succession of reforms that sought to eliminate “monotonous and repressive misery.” Today’s electric machines absorb shock better and look sleeker, but the ones in most gyms retain a certain quaintness, with their last-gen phone-charging cables and omnipresent menu of Calorie, Heart Rate, Manual, Random, Hill.
The companies behind those decades-old models at your gym are looking these days like aging gazelles awaiting packs of 5:2-Dieting codepreneurs. All manner of would-be predators want to feast on the $1.3 billion treadmill market, including software-oriented newcomers such as Studio and Aaptiv Inc., which offer constantly updated catalogs of training programs. Others combine hardware and software: Zwift Inc., for instance, pitches lush virtual-reality courses and a “foot pod” that makes sure your mile times are accurate. The minimalist, 64-pound, foldable Mini Walk treadmill from the Chinese maker IPO Sports uses what it calls “intelligent speed control” technology—when you run faster, the treadmill keeps up.
And then there’s the alpha of the pack, New York-based Peloton Interactive Inc., which made its name with a high-end stationary bike and a slate of spinning classes created for its large, high-definition screen. In January the company unveiled the Tread, a streamlined, lightning-bolt-shaped treadmill, at CES in Las Vegas, wooing crowds to its booth with svelte female runners clad in leggings and sports bras. “I can’t decide whether people were really excited about Peloton or if it was just a down year,” says John Foley, the company’s 47-year-old chief executive officer.
Foley, who was CEO of Evite.com and president of Barnes & Noble online before co-founding Peloton in 2012, has his disruption argot down pat. He says he measures Peloton against Apple, Tesla, and “other hardware and software platforms that are vertically integrated, direct to consumer, that are disrupting their respective categories.” Peloton has raised almost $1 billion in funding for its treadmill and stationary bike divisions after closing a $550 million round in August. The company has more than 900 employees worldwide, plus 32 retail outposts that abide by what Laura Petro, a brand manager, calls “the Tesla approach.” That is: “You’re probably not going to walk out of the store with a bike or a Tread, but it’s a really good place to go try them.”
We’re meeting at Peloton’s headquarters, which occupy seven floors of an office building in Manhattan’s Flatiron neighborhood. Free beer and kombucha are on tap, and catered lunches arrive for the 300 staffers every Thursday. There’s a pool and shuffleboard to fill in the downtime. A retina scanner guards the door to the lab, where the chic, charcoal-colored Tread is undergoing final tweaks in anticipation of an October release. The machine was code-named Aurora until CES, but instead of a rosy glow, when the door gives way I see a wanly lit row of four prototypes near a few 3D printers.
The dim setting obscures the Tread’s sleek body and immersive 32-inch screen—far sexier than the Life Fitness machines at the Equinox gym where I get in at least a short run almost daily. A product manager named Maureen Coiro invites me to hop on and explains that the baseball-size knobs below the screen control incline and speed. Instead of the standard buttons that require a forceful press, the dials glide with the flick of a wrist. The running surface is composed of 59 aluminum-and-rubber slats that offer cushion and flex. Beneath them is what Coiro says is a proprietary bearing system that “makes the treadmill feel really smooth.”
I select a pretaped class led by a glistening on-screen female instructor named Rebecca Kennedy, whose six-pack is visible below her purple Peloton sports bra. An inspirational pop anthem begins blasting from the speaker at music festival levels, and Kennedy tells me to jog at an effort equivalent to 5 out of a possible 10. Two minutes later, she asks me to pick up my pace. “There’s this crescendo that’s waiting for you. You’ll want to break free and go,” she promises. “I hope you have your volume turned all the way up! You’re going to give me a 7 out of 10 effort. Four, three, two, one!”
I bump my speed to a sprint as the chorus of Evanescence’s Bring Me to Life soars. For 45 seconds, my feet fly, then Kennedy guides me back to a walk. “We found something inside of us that wasn’t there 10 minutes ago,” she says sagely. It was more engaging than watching the seconds tick past, but mostly I’d found that I hated that Evanescence song as much as ever.
In a kettlebell-adorned lounge area afterward, Foley talks up the treadmill’s design. “You don’t want to hit a little button 20 times when you’re running full sprint,” he says. “So we asked, ‘Where are your hands, and what would be easy to interact with?’
“Fitness equipment is a very dopey category,” he adds. “It hasn’t evolved. You still sometimes see the dots rotating around the track. It’s a 1979 interface.”
Peloton is filming 7,000 hours of classes for the Tread at the company's new production studio in the West Village. Another studio, Peloton's third, is scheduled to open in London next year. The studios will livestream as many as 10 classes a day, including mashup cardio/resistance workouts that ask users to step off the treadmill and work with weights.
As for the machines, they’ll cost an infarction-inducing $3,995, not including the $39 a month for access to the classes and the Peloton community. (It does offer financing—there’s that Tesla influence.) You can find treadmills designed for home use for about $1,000, but Peloton considers the Tread’s true rival to be those expensive gym memberships. “You know how boutique fitness can rack up,” Foley says. “If you’re paying $149 a month for Equinox and you realize, Wow, I could have a better treadmill at a better location with better instructors and I’d use it more and I’d be in better shape, so effectively it’s a better value, you’d cancel Equinox and buy a Peloton Tread.”
Peloton is the only major company that’s aggressively advancing both new hardware and new software, but it has competitors in each arena. With hardware, there’s IPO Sports, with its foldable treadmill, for example, and Life Fitness, which says its cardiovascular machines are used by about 1 billion exercisers a year. Commercial accounts—largely gyms—make up 95 percent of its business; its home treadmills start at around $2,600.
While Life Fitness’s FlexDeck shock absorption system feels wooden compared with the Tread’s bed, the company is now letting outside developers create software for its machines. “You’ll be able to access video content,” says Jaime Irick, fitness division president of Brunswick Corp., which owns Life Fitness. “You’ll be able to do some shopping on the console. It’s not just the audio and the app, it’s a world of opportunity.” Last year, Irick helped start a digital ventures group within Brunswick to act as an “incubator for all the ideas we have: to test them, experiment with them in the marketplace, figure out which ones we can develop and scale up quickly.”
Life Fitness’s latest treadmill is equipped with its Discover SE3 HD console and features a coaching program from New York-based Studio, one of Peloton’s challengers on the software side. Started in January 2017 by Jason Baptiste, who previously founded a mobile publishing platform, and Nathaniel McNamara, a venture capital investor, Studio is modestly sized at this point. It has seven employees at its Wall Street office and $1.3 million in funding.
Studio was born out of the trend in boutique fitness studios, such as spinning phenomenon SoulCycle and boot camp-style Orangetheory, to feature popular instructors who develop cultlike followings. Baptiste drew just as much inspiration from boredom with his own daily fitness routine. Formerly 50 pounds overweight, he swears he’s run a 5K every day for the past eight and a half years. “Running is a huge part of my life, but frankly it sucks,” he says.
While a single SoulCycle class can cost up to $40, Studio charges just $100 for an annual subscription to its smartphone app, which offers hundreds of running classes voiced by popular instructors from major fitness chains. Three are livestreamed each day, well below Peloton’s planned 10, though Studio says the number will go up. Some of its programs are designed around speed benchmarks; others ask users to gauge exertion levels, letting them determine how fast they should run to feel like they’re working at, say, 70 percent capacity.
With a crowded field of competitors, distinguishing products can be tough—a challenge of design, pricing, and user experience. Distinct from Aaptiv, which offers audio instruction for a vast swath of activities, Studio emphasizes the star power of its New York- and Los Angeles-based cast. It also pays for music licenses, so its instructors can make playlists (“Ladies of Pop,” “Bruno Mars Hills”) suitable for theme classes along the lines of SoulCycle’s. And Studio users can measure their performance against others who’ve done the same run and earn “fit coins” to move up in rankings. To demonstrate, Baptiste pulls out his phone and taps on his Studio profile. “I’ve got 139,000 fit coin,” he says. “I’m a Krazy Koala—6,000 more until I’m a Baller Blowfish. It’s all alliterated animals. The highest level we have is Precious Pig. Everyone starts as a Basic Bear.
“It’s not a crypto thing,” he adds. “We have no crypto bullshit going on.”
I take the software for a test run on a Life Fitness treadmill, but only for a few minutes—the stock traders who occupy the offices below raised hell the one time Baptiste attempted his daily 5K here. The screen includes a constantly updating leaderboard detailing fit-coin balances and, for some reason, users’ heart rates. (DaCredibleHULK was running at about 75 percent capacity.) There’s also a progress meter and a prompt to “cheer” for the instructor. To a degree, Studio is only as good as the hardware it’s running on, and because the screen I’m working with isn’t as sensitive as that of, say, an iPhone, it’s hard to switch from one function to the next. And of course the speed and incline controls are the usual unresponsive buttons.
Baptiste won’t disclose how many people have signed up for Studio since the app became available in November, but he offers a point of comparison. “It took Orangetheory over 10 years to get to 1,000 cities,” he says. “We got to over 1,000 cities in under 100 days, which goes to our thesis. Do you want to scale group fitness through brick and mortar, or do you want to scale it through bits and bytes? Do you want to be Blockbuster and Regal theaters, or do you want to be Netflix and Spotify?” He neglects to address a crucial caveat: Studio still depends on users buying an expensive machine or belonging to a brick-and-mortar gym. Outdoor running comprises only 14 percent of its programming.
Everyone wants to be Netflix and Spotify, but Baptiste knows his competition well. He owns a Peloton bike and poached Peloton instructor Lisa Niren to lead Studio’s content and programming. He recently hired an engineer and a publicist who’ve both worked at Peloton. He also knows where his competitive advantage lies. “Our users are people in Boise and Bismarck,” he says. “They don’t have $4,000 to spend on a treadmill.”
When I ask Peloton’s Foley if he’s heard of Studio, the name doesn’t seem to register. “Have I? I think I have,” he says. I mention Studio’s hiring of Niren. He nods. “I’m familiar with it.” Does he consider Studio competition? “They’re not. I do think there will be competition”—eventually. “There’s no bike like the Peloton bike, treadmill like the Peloton treadmill, or content like the Peloton content,” he says.
Then he curbs the coyness and makes a more populist pitch, pointing out that the company doesn’t require you to own its bike or treadmill to get the Peloton experience: Its digital app, revamped in June, costs $19.49 a month and offers more than 10,000 hours of one-of-a-kind classes, such as a spinning tutorial recorded at the 2018 Winter Olympics in Pyeongchang and led by ultramarathon runner Robin Arzon. In other words, they’ve put on a speed burst to demoralize the upstarts. “We are platform agnostic with our content,” Foley says. “If you want to consume it on your own treadmill that you’ve had for 10 years with an iOS device, that’s fine.”
However big Peloton’s ambitions, Foley, like Baptiste, is aware that not everyone is a fan of disruption. “My wife and I have a Peloton bike in our West Village apartment,” Foley says. “We’re not going to get a Peloton Tread there. It’s the reality of New York City living. It’s bigger than the bike, it’s louder than the bike. There’s nothing you can do about that.”
(Corrects details about Peloton and its staff throughout.)