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  "documentTitle": "Peloton Interactive (PTON)",
  "authorId": "52_Citron_Research",
  "authorName": "Citron Research",
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  "presentationDate": "2019-12-10 00:00:00",
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  "notes": "Uses an analogy to Netflix/DirectTV to highlight the perceived flaw in Peloton's pricing strategy.",
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      "kind": "callout",
      "text": "Peloton justifies this by saying the app is a lead gen source yet the company admits that less than 10% of digital subscribers end up purchasing a connected fitness product.",
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      "kind": "image",
      "text": "The Bowflex Bike Works Seamlessly with Peloton App",
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      "text": "Peloton's strategy has allowed its competitors to quickly exploit this flaw as they now advertise that their bikes can be used with the Peloton app.",
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      "text": "Yet, with the Peloton digital app a customer can pay $12.99 for the same connected experience without having to pay $2,245 for the bike. Peloton justifies this by saying the app is a lead gen source yet the company admits that less than 10% of digital subscribers end up purchasing a connected fitness product.",
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      "text": "To put it in terms of digital content... Imagine if Netflix decided to increase its subscriber base by giving away its content to DirecTV subscribers for $3 a month rather than $12.99 and justified it by claiming they hoped to build enough brand loyalty that customers would eventually become Netflix subscribers. Would anybody buy that strategy?",
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      "kind": "paragraph",
      "text": "If you don't own Peloton stock for hardware you own it for digital. Let's now look at its digital strategy. First, Peloton is charging $39 a month for a connected experience to those who have purchased a Peloton bike for $2,245.",
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