My understanding of Peloton is they have very solid user retention numbers. 92% year over year [1]
Where they struggle is growth. They are seen as a premium product. They're expensive. That's why they have tried creating new tiers, new products that aren't just the bike, and ways to get a subscription from just a streaming device.
IMO they would have done better to stay a slower growing, niche, premium product but focusing on quality and profitability instead of growth. The price elasticity in the premium user base is pretty high, they probably would have paid more / bought other products. Then they can keep their cool, and create more organic demand, but not obsess over always filling that demand. Scarcity is a good thing for a premium product.
I think, however, now they are stuck. They need growth.
As n=1, I'm a long term peloton subscriber, and find it a really invaluable way to exercise. Not for everyone, but I get a lot out of it.
People bought them in droves, and those that did broadly seem to enjoy it. I certainly have a few mega fans in my circle. The execution though was just terrible. They just kept pumping the things out after it was clear they saturated the market. They could have had an excellent business with a smaller market but instead didn’t know when to tap the brakes on their growth and built a bloated mess that may be impossible to unravel.
Charging a lot (and not making a lot) for something people probably won’t use for long isn’t a winning bet IMO.