For a fitness company as influential as Peloton, its offices and research labs in midtown Manhattan are remarkably sparse. That’s the first thing that struck me when I visited the company on a nearly-spring day in March, with plans to get a demo of a long-in-the-works Peloton product. Maybe I expected the vibe at Peloton to match the sparkling energy its famed fitness instructors exude. But there are at least two sides to Peloton—the one projected onscreen during sweaty, addictive exercise classes, and the one behind the scenes, where Peloton executives are sprinting on the metaphorical treadmill to release new products into the hypercompetitive home fitness market.
The research lab I saw at Peloton was not much larger than a hotel gym, with hardwood floors, painted black walls, and harsh ceiling spotlights. (A second research area was closed off.) Ben Schultz, the company’s director of product management, stood near a single Peloton treadmill and a couple of the company’s signature stationary bikes. He gestured toward a TV screen as he spoke, which displayed a new version of Peloton’s software. Then I was handed a remote and instructed to have fun as the doors were shut behind me.
Sitting just under the TV set was the Peloton Guide. This is a $295 (£275), fabric-covered streaming media box with “PELOTON” emblazoned on its plastic front cover. Behind that plastic is a body-tracking camera that watches you perform weight training workouts in your living room. By studying your movements, the camera informs Peloton’s software of your progress, thereby helping track your workouts and suggesting future Peloton classes for you.
The Peloton Guide is as bizarre as it sounds. It’s also maybe a bit sensical when you consider that Peloton is going to try everything it can to consistently deliver fixes to its already-hooked subscribers. During the pandemic, demand for Peloton’s bikes and treadmills surged—and then it slowed, which left the company scrambling to right its finances. This led to the recent appointment of a new CEO, Barry McCarthy, as well as massive layoffs amounting to a fifth of Peloton’s workforce. The Guide has been in development since 2019, but its arrival comes at a critical time.
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When I fired up a strength-training class on Guide, I saw not just a Peloton instructor on the screen but also a livestream of myself. After two years of Zooming, I am blurry-eyed-tired of staring at myself; both accustomed to it and continually annoyed by my own appearance. Did I really want to watch myself exercise? Couldn’t I just stream a Peloton class on an Apple TV and not see my own reflection?
No, and yes. But Peloton has plans for the Guide and the new software experience that comes with it. The company wants to count your workout reps, study your progress over time, see which areas of the body you’re fatiguing more than others. It wants to expand its tracking tech to other “modalities,” which means Peloton will eventually apply this intelligence to yoga, or pilates, or other forms of exercise. And it plans to charge $24 a month for this service, on top of the cost of the Guide hardware and any weights or heart-rate tracker you want to use with it.
“That’s where we’re putting our resources in AI,” says Tom Cortese, a Peloton cofounder and the company’s chief product officer. “We want to understand the body, understand movement, and figure out how to incorporate that into an interactive workout.” By the end of my Guide workouts, I was not yet completely sold, but I was definitely sore.
Guiding Light
The Peloton Guide looks like a set-top box, like an Apple TV or a Roku box, though Cortese bristles at the phrase “set-top box.” A set-top box “does this dumb thing of just streaming one-way content,” he insists. “The Guide is a high-powered computing device that’s trying to create connection and connectivity.”
He has a point: The Peloton Guide is truly gadget-chic, smooth and solid, with that tight fabric covering and a nifty, adjustable magnetic mount that allows you to angle the device so its camera can see you properly. The Guide’s remote is well-designed—with the bare minimum of buttons and a rubbery, sweatproof finish. (Still, when Peloton eventually shipped me a Guide on loan, I attached it to my TV using an HDMI cable … like I would any other set-top box.)
Following the Guide’s initial reveal last fall, a lot of people—myself included—assumed it would work something like Microsoft Kinect, the body-tracking camera that plugged into the XBox and let you interact with video games by hopping around in your living room. But unlike the Kinect, there are no infrared sensors in this kit. There’s a 12-megapixel wide-angle camera, which streams 4K video at up to 60 frames per second. The camera is powered by Qualcomm’s QCS605 system-on-a-chip. This SoC was first introduced back in 2018, so it’s ancient by chip standards, though Peloton says it collaborated with the chip maker to customize the system for Guide. This includes image and digital signal processors that crunch your biometric data directly on the device itself.
“On device” has become something of a crutch-phrase for tech makers using AI to process potentially sensitive data. The term simply means that for any data that’s collected, machine intelligence is being applied on the hardware itself instead of on some distant cloud server. In Peloton’s case, this data includes the literal movements of your body. So during my demo of the Guide, Schultz and other executives stressed privacy. Not only would the video and audio captured by the Guide stay inside my house, but there are physical privacy guards as well: The Peloton-stamped piece of plastic on the front of the Guide is a camera shield, and the Guide’s microphones can be physically switched off.
And while the camera is capturing your live-streamed body data and making inferences about it, Peloton says it doesn’t store image or video data of you while you perform the movements. It does, however, collect and store metadata—the fact that you worked out, which class you took, how many reps you completed.
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Eventually, Peloton may do more data-tracking with this “smart” camera for your living room. In a not-yet-final draft of the Guide’s privacy policy I reviewed a few days after my demo, Peloton indicated it would "collect biometric data that uniquely identifies you, such as visual details about your face and body (face and body scans) and voiceprints. This information may be captured by Peloton Guide equipment or uploaded by you." At no point during my demo did Peloton mention anything about scanning my face.
A spokeswoman for Peloton, Amelise Lane, said the company isn’t collecting this category of data when the Guide launches, but that it “may help us with future features. If any facial recognition is planned, we will offer explicit opt-in options for members to provide their data.” Lane also said that, for now, Peloton does not store or transmit video or audio recordings from Guide workouts.
Hardcore Software
Peloton’s pitch for a product like Guide centers more on software than on hardware. Schultz tells me that the Peloton app on the Guide was built from a new code base and therefore is differentiated from the app that runs on Peloton bikes, treadmills, or mobile devices. This is slightly misleading: The Guide is still running on a forked version of the Android OS, which is what runs on the tablets found on the bikes and treadmills. But the Guide app was designed to be more interactive.
For example, Peloton has developed something called the Movement Tracker, which is both a function of the device and a symbol affixed to classes that are optimized for the Guide. When you fire up the Peloton app on your TV, Guide strength classes appear at the top of the page. When you launch a Guide class, the Movement Tracker appears as an overlay. I began calling it the Sweat Tracker because of its resemblance to a droplet of sweat.
As you go through reps, the Movement Tracker aka Sweat Tracker counts them, and the outline of the droplet is filled in. Switch to the next set of exercises—say, from bicep curls to rows—and you’ll hear an audible chime. The Movement Tracker starts anew. There are pauses built in too, 30-second breaks between sets, during which one of the Peloton instructors might crack a joke or offer recovery tips.
All of this required a new approach to Peloton programming. Peloton has offered digital strength-training classes since the earliest days of its bikes, in the form of arm intervals while people are on their bikes. But Jennifer Cotter, a former Home Shopping Network exec who joined Peloton as its head of content in 2019, had plans for revitalizing the company’s strength-training classes. “We wanted to remind people that [strength training] was there and it was additive. And people stuck with it,” Cotter says.
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After relaunching strength training as a category in the Peloton app, Cotter then assembled a team—producers, instructors, and product managers—to figure out how to marry those addictive fitness classes with the new workout paradigm the Guide presented. How could it be even more interactive? How would live-streamed strength classes work if there are segments and pauses in the workout?
You can still pull up an earlier strength workout from Peloton’s back catalog and fire it up on the Guide (and, for better or worse, see yourself on screen). But older classes won’t always utilize the Movement Tracker. And that means you wouldn’t see some of the workout metrics and body data that’s shared after you’ve completed a Guide-specific class. For Guide classes, there are all kinds of badges and medals awarded, a color-coded map of the human body showing the muscle groups you’ve worked out, stats about the exercises you completed, and time codes for when you broke down and laid flat on the mat instead of doing push-ups.
In time, the Guide app starts to recommend other classes based on your activity. I completed nine Guide workouts in the span of a couple weeks, mostly at home after receiving the Guide loaner. When I log in now, Peloton suggests a series of upper-body workouts—the type I typically skip because I prefer doing squats over push-ups any day of the week. It takes the thinking out of crafting a weight-training regimen. This is all part of the intelligence that Guide is supposed to offer. It’s also what makes the Guide a more “elegant” solution, Cortese claims, than just firing up the Peloton app on an iPad or mobile phone and casting it to a TV screen.
There was something undeniably motivating about the Movement Tracker and getting a streak going on Peloton, something I haven’t meaningfully done since last year. Many of the Guide classes are short, 10 or 15 minutes, though there are some 45-minute classes. The short classes are easy to wrap your head around or stack with other classes. The instructors, per usual, are an absolute delight and a little bit corny, whether it’s Jess Sims saying, “You don’t have to, you get to”—Sims is one of the lead instructors for Guide content—or Adrian Williams chiding you that if you don’t squeeze your glutes, no one else will squeeze them either. The off-bike, off-treadmill workouts offered with Guide are about a zillion times more engaging than the similar ones on Apple Fitness+.
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But I am probably Peloton’s target audience for this Guide gadget: Able-bodied, not prone to body dysmorphia, and a person who is already very familiar with the Pelo-mania. I asked Peloton three times whether the Guide team, during its development of the workout camera, consulted outside research or peer-reviewed papers pertaining to motivation, gamification, and negative and positive body image experiences. All the company said was that it did a “mix of user research of both Peloton and non-Peloton members, leveraging the most cutting-edge human-AI interaction guidelines based on two decades of academic and industry research.” Gold medal for vagueness achieved.
Mirror, Mirror
By now, Peloton’s no good, very bad year of 2021 is well-documented.
In the earliest days of the Covid-19 pandemic, when millions of people were stuck at home, sales of Peloton equipment surged. Peloton executives assumed this pandemic-era demand was the new normal and that people would be frenzied for bikes and treadmills for years to come. The company acquired a fitness equipment maker and broke ground on a new manufacturing plant in Ohio. Then demand slowed.
Its treadmills proved to be treacherous and were involved in the death of a child and the injuries of dozens of other people. Eventually, the company recalled its treadmills. Meanwhile, back in New York City, two popular television shows depicted characters having heart attacks after vigorous Peloton workouts. Peloton had morphed from fitness phenomenon to pop-culture punch line.
So in early 2022, the company’s longtime chief executive and cofounder John Foley was bumped from the first row and replaced by Barry McCarthy, a seasoned chief financial officer. (Foley is still Peloton’s executive chairman.) All those workers were laid off. McCarthy gave spitfire interviews to The New York Times’ Dealbook and The Wall Street Journal, subliminally—and overtly—messaging his intent to focus on the company’s financials. (Peloton declined to make McCarthy available for an interview for this report.) McCarthy told the Journal that Peloton would be trialing a new subscription program for its bikes, offering customers in some markets a lower upfront cost for a higher monthly fee.
The Guide was already on its way out the door at this point, a holdover from the Foley era of product development. Cotter tells me McCarthy is fully behind the new product, because it’s part of the company’s broader plans to offer “fitness as a service.”
Still, I press Cotter and Cortese on why the company decided to make a product like the Guide, way back in the Before Times. This was a real choice, and as with any choice, there’s an opportunity cost to weigh. Both executives say it became apparent early on that strength was a fitness category Peloton needed to capitalize on. For people who owned a Peloton bike, cycling was their number one workout. For people who owned a Peloton treadmill, running was key. Makes sense. But the second most popular workout for Peloton equipment owners was strength training. And some Peloton users are mobile-only subscribers, paying $13 a month for access to strength training, yoga, outdoor running, and other streaming workout programs that don’t require the bike.
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“We’re a member business. We’re a subscription business. That has always been true, that will always be true,” says Cortese. “The question is, what are the pathways into that membership.” Guide, he says, is yet another “pathway” into that subscription.
Will a purpose-driven piece of hardware compel that many more people to subscribe to Peloton? It’s unlikely the hardware itself will drive much profit for the company, which is not dissimilar from its approach with bikes and treadmills. Cortese declined to talk about the margins on the Guide. Anshel Sag, principal analyst at Moor Insights & Strategy, notes that the Guide—which Sag hasn’t experienced himself—sounds expensive to make. “They’re integrating a camera. There’s the image sensor and the lens. They’re doing some AI inference on body poses, which adds cost to what otherwise would be a basic box,” Sag says. “They’ll probably be selling it at cost or at a very narrow margin.” Again, subscriptions matter most for Peloton—which may also explain why, next year, the $24 per month cost for Guide will be bumped up to match the higher subscription fees of the bikes and treadmills.
The Guide also doesn’t exist in a fitness vacuum. There are plenty of at-home fitness options available for strength training, some that require heavy hardware and others that are digital only. There’s Mirror, which as its name suggests is a $1,500 wall mirror that offers “curated” workout classes and which the clothing brand Lululemon acquired and now markets aggressively in its stores. There’s Tonal’s home gym. This costs $3,000 and requires installation, but it offers a unique experience with “digital” weight training. There’s Apple’s subscription fitness offering—which, despite its milquetoast content and requirement that customers wear an Apple Watch, could be appealing simply because it’s part of a bundle. If someone is already paying for Apple’s iCloud storage, Apple Music, and Apple TV+, they might as well try the fitness classes.
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And then there’s the threat of real-life gyms, with their weird smells and sounds and social networks, and which people are starting to return to. According to marketing research firm InMarket, in-person visits to boutique fitness studios have soared again, and luxury gym chains, like Equinox, have also started to see an increase in foot traffic. And when it comes to weight training, devotees might be more willing to spend their dollars on access to a wide variety of weights at a box gym than they would on Peloton Guide.
Peloton has a high climb ahead of it: It not only has to convince people to buy this strength-training camera for their living room, it also has to make the experience smarter and stickier over time. The company managed to transform the standard, boring stationary bike into a piece of covetable gear with an actual online community. Can it do the same with Guide? Maybe, though it might require a real show of strength.
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