Zwift, the popular virtual cycling and running platform, has hinted at the possibility of increasing its subscription price for the first time in five years. According to an article published by Bloomberg, Zwift CEO, Eric Min, has stated that the current subscription charge of $15 a month is “not sustainable” for much longer.
Since the pandemic, Zwift has been growing rapidly in popularity, attracting a large and dedicated following of cyclists and runners from around the world. With its immersive virtual worlds, live leaderboards, and social features, Zwift has become a staple of indoor training for many athletes.
However, maintaining and developing such a comprehensive platform comes at a cost, and Zwift’s CEO has suggested that the company may need to adjust its pricing in order to continue delivering the level of quality that users have come to expect. One option being explored is locking users into annual memberships, which would provide Zwift with a more predictable and stable source of revenue.
Zwift has received significant investment from backers including KKR & Co., Permira Holdings, and Amazon’s Alexa Fund, which has added up to a market value of more than $1 billion according to Bloomberg. The CEO also mentioned the possibility of taking the company public eventually.
Despite its growth, Zwift is not yet profitable per Bloomberg, and underwent a restructuring last year that led to job cuts, in line with the wave of layoffs and cost-cutting hitting US tech and e-commerce firms. The company didn’t confirm the number of positions that were eliminated, but stated that it currently employs between 500 and 600 people.
Zwift is often compared to Peloton, and it’s not hard to see why. Both are in-home fitness companies offering a wide range of workout options from the comfort of your own home. However, it’s important to note that despite some overlap in their offerings, the two companies have distinct target markets and strategies.
While both offer indoor cycling and running options, Peloton has positioned itself as a premium fitness brand, offering a more high-end experience with a sleek, integrated touchscreen bike and a wide range of workout classes. On the other hand, Zwift is more focused on the avid cyclist/triathlete and runner, offering a more budget-friendly option with a wider range of workouts, training plans, group rides, races, and the ability to use your own equipment.
Currently, Zwift charges $15 a month for its subscription per user, while Peloton’s monthly fee is $44 per household. Even if Zwift were to increase its price by 30%, it would still be less than half of what Peloton charges if you are a single user. But if you have more than one user per household, Peloton can quickly become the more attractive option.
A subscription price increase is always a tough pill to swallow, but with the current economic environment, we have seen many companies increase prices. TrainerRoad just last month announced a price increase for legacy users. Wahoo X increased its annual membership from $129 to $149.
What’s your take on a possible price hike? share your thoughts in the comments
Leave a Comment