The producer of state-of-the-art home sports equipment and content, Peloton Interactive Inc. (PTON), will collaborate with Beyoncé to develop new training programs. The news was a driver for PTON shares to rise in trading on November 10 by over 5 percent. Generally in last week, the price of Peloton Interactive shares dropped on reports of the possibly imminent arrival of the COVID-19 vaccine.
It is an established move to attract celebrities that helps attract attention to the product and increase sales. It is crucial for Peloton Interactive, whose success has been related to the closure of conventional fitness rooms due to the pandemic in recent months, to sustain a high level of interest in their home workouts even after the restoration of normal social activity. It is a smart move to select a star like Beyoncé, as the singer is famous in various age groups and ethnic groups.
Peloton Interactive and Beyoncé will work together to create a series of training sessions, including the pandemic and distance learning for college students who returned home earlier this year. Peloton Interactive focuses on students particularly at Historically Black Colleges and Universities (HBCUS) (colleges historically dominated by African-American students). Beyoncé and Peloton Interactive both provide students at ten HBCUS with two-year memberships.
Expanding the audience is one of key objectives of Peloton Interactive. The company completed the past fiscal year with 1.4 million customers attached with its platform, which is a good result for the premium service. The management plans, however, to reach 100 million subscribers.
A good time for Peloton Interactive was the COVID-19 pandemic as in the second quarter, company’s revenue rose year-on-year by 172 percent. Investors fear that the end of the pandemic will not just reduce the growth of Peloton Interactive, but even lead to the departure of some consumers. That’s why contracts with celebrities are so important for the company to maintain interest in simulators and training programs. The contract with Beyoncé shows that Peloton Interactive is keeping up with trends and entering new consumer categories.
Peloton Interactive Inc. (NASDAQ: PTON) was up 2.36 percent to $108.72 at close of the session on Thursday.