WEBVTT - Peleton CEO Peter Stern Talks Future, Growth at the Bloomberg Tech Event

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, the Bloomberg Tech Summit

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<v Speaker 1>in San Francisco. We have something specially on stage right now.

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<v Speaker 2>Yeah, let's head on over to the main stage because

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<v Speaker 2>we've got Peter Stern, the president and CEO of Peloton

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<v Speaker 2>Interactive in conversations happening right now.

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<v Speaker 1>It's with Bloomberg Technology s Marketermount.

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<v Speaker 3>A typical day for me is like this morning, getting

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<v Speaker 3>up and doing a little bit of cardio, ran to

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<v Speaker 3>the gym actually, and then did also some strength training,

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<v Speaker 3>and then I'm mostly spending my time working on those

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<v Speaker 3>twenty five initiatives with our team members, trying to find

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<v Speaker 3>how we can serve our members better.

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<v Speaker 1>And you know, if I.

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<v Speaker 3>Can spend my time on that kind of substance.

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<v Speaker 1>That's a really great day.

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<v Speaker 2>What are the top three of your twenty five?

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<v Speaker 3>So I'm not going to announce all of the you know,

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<v Speaker 3>all of the details of these sorts of things, but

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<v Speaker 3>then I'll tell you a little bit about the top one,

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<v Speaker 3>and that is that we have reignited the innovation engine

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<v Speaker 3>for us as a company, and so focusing on the

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<v Speaker 3>products and the experiences that we're going to offer over

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<v Speaker 3>the next few months is absolutely my number one. Another

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<v Speaker 3>one that I think is really important that we're focused

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<v Speaker 3>on is how we use AI to deliver personal experiences

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<v Speaker 3>for our members. That is another one I'm spending an

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<v Speaker 3>enormous amount of time on, so huge priority for us.

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<v Speaker 2>Talk to us a little bit more about that about

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<v Speaker 2>AI and what does the future fitness look like with

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<v Speaker 2>AI at its core.

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<v Speaker 1>So every member is different.

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<v Speaker 3>They all have different intents for why they choose to

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<v Speaker 3>become a member of Peloton. That can change over time.

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<v Speaker 3>So we need to not just get to know you,

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<v Speaker 3>but we need to evolve along with you. Every member

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<v Speaker 3>is different in terms of their baseline level of fitness,

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<v Speaker 3>their level of commitment, their level of confidence, and so

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<v Speaker 3>one of the things that I really value is the

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<v Speaker 3>human coaching that are amazing instructors.

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<v Speaker 1>Provide at Peloton.

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<v Speaker 3>But I want to find ways to scale them by

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<v Speaker 3>creating individualized programs for each of our members so that

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<v Speaker 3>they can get the right class from the right instructor

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<v Speaker 3>that's personalized for them. A really simple example of how

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<v Speaker 3>we're doing it right now is that we do something

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<v Speaker 3>called power zones on bike, or we do paste targets

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<v Speaker 3>on tread where we actually set individualized speeds or levels

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<v Speaker 3>of effort for each of our members. But then we've

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<v Speaker 3>introduced a new set of features called personalized plans, and

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<v Speaker 3>we've had at this point over six hundred thousand of

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<v Speaker 3>our members have started a personalized plan, and the system

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<v Speaker 3>basically understands your goals and then builds a plan out

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<v Speaker 3>for you, and we deliver real results with these sorts

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<v Speaker 3>of things. So just to give you an example of

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<v Speaker 3>how this stuff really does make a difference.

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<v Speaker 1>For example, when one of our members buys a treadmill, within.

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<v Speaker 3>The first four weeks of using the treadmill, we're on

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<v Speaker 3>average reducing their mild time by thirty seconds. So we

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<v Speaker 3>can make real differences in somebody's conditioning and that translates

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<v Speaker 3>not just into more confidence and better performance as an athlete,

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<v Speaker 3>it translates into a longer life.

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<v Speaker 1>What about data.

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<v Speaker 2>Collections, you can get some more information about the user

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<v Speaker 2>and then use AI to optimize their workouts. Do you

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<v Speaker 2>need a wearable, do you need a new heart rate strap?

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<v Speaker 2>Do you need more sensors on the treads and bikes themselves.

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<v Speaker 3>Yeah, we're very lucky in this regard in that our

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<v Speaker 3>members are doing a lot of that hard work for us.

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<v Speaker 3>So we have a great partnership with Google Fitbit. For example,

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<v Speaker 3>we have done integration with Garman smart watches because a

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<v Speaker 3>lot of top athletes choose that, And we also are

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<v Speaker 3>working with the Apple Health app to make sure that

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<v Speaker 3>we can import data from there.

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<v Speaker 1>A very large fraction of our members have.

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<v Speaker 3>An Apple Watch, and that Apple Health app basically can

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<v Speaker 3>act for many members as basically a Rosetta stone for us,

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<v Speaker 3>allowing us to get access to the data that we

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<v Speaker 3>need with the permission of the member. Once we have

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<v Speaker 3>that data, now we can use the third party information

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<v Speaker 3>that our members are providing us. But we have such

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<v Speaker 3>rich first party information on our members as well, based

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<v Speaker 3>on the workouts that they're doing on our machines and

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<v Speaker 3>how much they're pushing themselves. If they have a watch,

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<v Speaker 3>we can look at their heart rate and we can

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<v Speaker 3>impute then how much effort they're expending. And if they

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<v Speaker 3>don't have a watch, we can basically compare them with

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<v Speaker 3>members who do have one, and so we can basically

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<v Speaker 3>determine how hard you're working, and we can, for example,

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<v Speaker 3>calculate things like a cardio fitness score.

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<v Speaker 1>So I'm really excited about how we'll be able to

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<v Speaker 1>use data.

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<v Speaker 3>To deliver ever more personalized experiences for our members.

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<v Speaker 2>So you said you did a workout this morning. Obviously

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<v Speaker 2>pelotons based in New York, so you're here probably stayed

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<v Speaker 2>in a hotel. How important is the hotel business in

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<v Speaker 2>the gym business to Peloton under Peter Stern in compare

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<v Speaker 2>it to the someone buys one for their home business.

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<v Speaker 3>So the nice thing about this is these are not

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<v Speaker 3>either or situations. I think it might have been perceived

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<v Speaker 3>that way in the past, but it's absolutely not. Let's

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<v Speaker 3>take travelers in hotels as an example. If you're the

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<v Speaker 3>type of person who is in a hotel, then you're

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<v Speaker 3>a person who is investing in yourself. You have some

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<v Speaker 3>ability to pay for a service, and you're going to

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<v Speaker 3>a hotel gym. You are really committed to taking care

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<v Speaker 3>of yourself. That is a situation where we should have

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<v Speaker 3>Peloton equipment everywhere. I'm really happy with the partnerships we

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<v Speaker 3>have right now with Hilton and with Hyatt, where we

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<v Speaker 3>have peloton equipment in most of their gyms. I do

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<v Speaker 3>think in hotel gyms, basically, peloton equipment should be a

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<v Speaker 3>must have amenity. It's the sort of thing where you

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<v Speaker 3>shouldn't even choose. You wouldn't even want to stay in

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<v Speaker 3>the hotel if it doesn't have the Peloton equipment that

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<v Speaker 3>you count on having at home. And then that's a

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<v Speaker 3>great way for us to meet new members because you know,

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<v Speaker 3>some people might not have had a chance to try

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<v Speaker 3>our equipment out, but while you're traveling at a hotel

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<v Speaker 3>gym where you've got a little time on your hands,

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<v Speaker 3>that's a great way to do it.

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<v Speaker 1>Now, with regard to.

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<v Speaker 3>Commercial gyms, there's also tremendous opportunities there. We have a

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<v Speaker 3>number of pilots taking place with all sorts of gyms,

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<v Speaker 3>including the y so we can try to make Peloton

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<v Speaker 3>equipment as accessible as possible. But one of the things

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<v Speaker 3>that I'm really excited about, and this is, you know,

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<v Speaker 3>this is not something that.

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<v Speaker 1>We've we've really talked about publicly before.

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<v Speaker 3>Not a lot of people know that we own pre

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<v Speaker 3>corep which is one of the leading providers of equipment

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<v Speaker 3>to gyms everywhere.

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<v Speaker 1>We are bringing pre Corp in.

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<v Speaker 3>To basically be the lead partner in a commercial operating

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<v Speaker 3>division for Peloton, and the pre Core business has the

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<v Speaker 3>skills to be able to install and service equipment.

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<v Speaker 1>To the exacting standards of gym operators who have very

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<v Speaker 1>heavy duty cycle.

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<v Speaker 3>On that type of equipment, and so we're gonna be

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<v Speaker 3>able to bring Peloton equipment into more gyms with the

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<v Speaker 3>capabilities of pre Core. At the same time, we're now

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<v Speaker 3>bringing Peloton workouts onto pre Core equipment, which will really

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<v Speaker 3>differentiate that pre Core equipment in the minds of gym

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<v Speaker 3>operators and hopefully open up even more new audiences for them.

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<v Speaker 1>So, you know, I would basically say this.

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<v Speaker 3>Is a long overdue post merger integration that we're doing

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<v Speaker 3>with pre Core and making it the foundation for our

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<v Speaker 3>commercial business.

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<v Speaker 2>How do most people buy a Peloton right? Are they

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<v Speaker 2>subscribing to it with your rental program, are they doing installments?

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<v Speaker 1>Are they buying it out right?

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<v Speaker 2>And then earlier this week you launched a new program

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<v Speaker 2>sort of a resale website, like a Craigslist for Peloton.

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<v Speaker 1>I guess you can call it. Talk to us about that, I.

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<v Speaker 3>Would say, Actually, so the two largest channels are people

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<v Speaker 3>buying a Peloton equipment from our website. You go to

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<v Speaker 3>one Peloton dot com and it's all there, and it's

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<v Speaker 3>a really great way to buy it.

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<v Speaker 1>But one of them.

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<v Speaker 3>Ourgest ways for us to acquire new members is in

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<v Speaker 3>the secondhand market.

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<v Speaker 1>So you raised mark.

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<v Speaker 3>This announcement that we had a couple days ago about

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<v Speaker 3>something called Repowered, and the idea here is that there

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<v Speaker 3>are lots of Peloton bikes in particular that are out

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<v Speaker 3>there in the world that are being underutilized and that

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<v Speaker 3>does no one any good. I'd love for people to

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<v Speaker 3>get back on the bike. It's the right thing for them.

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<v Speaker 3>Certainly it's great for us as a company. But if

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<v Speaker 3>you're not going to use a Peloton bike, we want

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<v Speaker 3>to make it really easy for you to get that

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<v Speaker 3>into the hands of someone who.

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<v Speaker 1>Will love it. And historically that's taken.

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<v Speaker 3>Place, for example, on Facebook marketplace, and that's absolutely fine

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<v Speaker 3>for people who want.

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<v Speaker 1>To do that, but it means that you.

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<v Speaker 3>Need to transact with a stranger on both ends and

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<v Speaker 3>potentially have the stranger come into your home. And so

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<v Speaker 3>what we're trying to do is streamline that and deliver

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<v Speaker 3>a more premium experience for those secondhand customers.

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<v Speaker 1>What this does is.

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<v Speaker 3>It allows us to get our bikes that are built

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<v Speaker 3>to last into the hands of people who will love

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<v Speaker 3>it at a price. It's a fraction of a new bike,

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<v Speaker 3>and there's no capital.

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<v Speaker 1>Expenditure for us as a company.

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<v Speaker 3>There's no environmental impact associated with producing those bikes because

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<v Speaker 3>they're already out there in the world, and so it's

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<v Speaker 3>a great way to help somebody get fit.

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<v Speaker 1>And you know, grow our business.

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<v Speaker 2>Last question for you, Peloton standalone business for years to come?

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<v Speaker 2>Is it potentially an acquisition target for a larger company.

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<v Speaker 1>What do you see as the You know, I was

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<v Speaker 1>not hired to sell this company.

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<v Speaker 3>I was hired to bring this company back to growth,

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<v Speaker 3>to reinvigorate it, and it is happening.

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<v Speaker 1>So there is we are. We are a standalone company

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<v Speaker 1>for years to come. Great.

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<v Speaker 2>Thank you, Peter Stern, thanks for having me Mark.

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<v Speaker 1>All right, everyone, you've been listening to a live conversation

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<v Speaker 1>between our Mark German and of course Peter Stern, who

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<v Speaker 1>is the president and CEO of a Peloton Interactive