FOS PM: Peloton Being Sold Unlikely

New Peloton CEO Barry McCarthy said the company has big plans, but they don’t involve a sale.

The connected fitness giant had reportedly drawn interest from Amazon and Nike, who saw opportunity in Peloton’s depressed stock price. The company has lost around 77% of its value over the last 12 months.

Activist investor Blackwells Capital had pushed Peloton to oust CEO John Foley — who resigned and became executive chairman last week — and to sell the company.

• McCarthy said that Peloton could swap its $39-per-month app subscription with “an entirely different pricing structure.”
• The company ended its second fiscal quarter of 2022 with 2.8 million subscribers. Subscription revenue reached $337.5 million — 30% of the company’s revenue.
• While subscriptions have risen steadily from 886,000 over the past eight quarters, monthly workouts per subscriber plummeted from 26 in fiscal Q3 2021 to 15.5 in the most recent quarter.

Next Cycle

McCarthy said that his near-term focus will be on digital content. Peloton retained its top instructors despite eliminating 2,800 jobs, which was announced the same day Foley resigned as CEO.

The company is widely reported to be preparing for the launch of a connected rowing machine with instructor-led classes.

In December, Peloton added shadowboxing classes to its suite of offerings.

There’s a reason brands of all types invest in Super Bowl advertising and sponsorship — every year, the event generates millions of dollars in brand exposure.

This year, brands have gotten more than in recent years.

Companies received an estimate of $170 million worth of “in-game exposure,” or sponsorship activation embedded in the actual game production content, according to a report by Hive and Elevate obtained by CNBC.

• The 2021 Super Bowl generated $169 million in in-game brand exposure.
• In 2020, the Super Bowl generated significantly less — about $143 million.

Nike clocked 46 minutes of screen time. PepsiCo’s brands, which include Gatorade, saw nine minutes — but the brands were named 11 times, more than any other company. And Bose, a major NFL sponsor, saw eight minutes of screen time.

The valuations were based on the length of time a brand was featured, as well as “quality” and “size” of its logo during exposure, CNBC reported.

Advertising Winners

Traditional ads made an impact as well. Coinbase’s commercial drew more than 20 million hits on its landing page within 60 seconds, momentarily crashing its website.

Polestar, Cue Health, and Amazon’s “Lord of the Rings” earned the top three spots for “viewer engagement” of advertisements, per EDO, Inc.

Tripledot Studios announced it has raised $116 million at a reported $1.4 billion valuation. The Series B funding round was led by 20VC and included Access Industries, Lightspeed Venture Partners, and Eldridge.

The capital adds to the $78 million Series A round the mobile game developer raised 10 months ago and will be used for growing Tripledot’s gaming portfolio and investments in mergers and acquisitions. The company has raised a total of $202 million to date.

CEO Lior Shiff told GamesBeat the company sees itself as “an active buyer,” highlighting that “what we’ve built is a great platform to aggregate smaller studios.”

Revenues have reportedly tripled in the last year alone, and the developer says it reaches 25 million players on a monthly basis, targeting players over age 30.

• The company has launched 10 titles, four of which it is scaling.
• It has reportedly been profitable since its 2017 launch.
• The developer is known for “Woodoku” and its Blackjack and Solitaire titles.

The Apple Effect

COO Akin Babayigit says the company was forced to change its methods of user acquisition due to Apple’s focus on privacy over targeted ads.

“That will continue to be a focus going forward,” he said. “We think we are very good at user acquisition, and we will be able to help companies that we acquire.”

The global mobile gaming market is estimated to reach $153.5 billion by 2027.