Betina Evancha, a product manager at Peloton, jogs on the new Peloton Tread at CES 2018. Avery Hartmans/Business Insider

The fitness startup Peloton unveiled the $4,000 Peloton Tread, a high-end treadmill with built-in fitness classes, on Tuesday at the CES tech industry trade show.

It's Peloton's second product and a step for the company toward becoming a full-service fitness empire with high-end hardware, livestreamed classes, and a 600,000-strong subscriber community.

CEO John Foley told Business Insider his goal was to have "tens of millions" of global subscribers, adding: "We're not committed to trying to sell you a treadmill. We want to get you fantastic content and great classes and instructors and community — whenever you want it, however you want it, so it works for you."



LAS VEGAS — With its new $4,000 treadmill, Peloton wants to work out your whole body.

The fitness startup on Tuesday unveiled the Peloton Tread, a high-end treadmill that, much like its popular exercise bike, has built-in live workouts.

The Tread is Peloton's first new product since the bike, and CEO John Foley has quickly chosen a favorite.

"Personally, I'm more excited about the Peloton Tread than I am about the Peloton bike, since I'd rather do a full-body workout," Foley told Business Insider in an interview at CES, the tech industry trade show here this week.

The Tread encourages users to get off the machine and work out next to it. The workouts — which beam into your home live or on demand — focus on activities like high-intensity interval training, which includes short sprints followed by exercises on a mat.

Because of this, Peloton installed a 32-inch screen and 20-watt soundbar on the treadmill so users can still see and hear the instructor when they're on the floor. The screen is twice as large as the one on the bike, and it looks shockingly large in person (for context, it's larger than an iMac Pro).

Still, a treadmill isn't exactly a revolutionary product — and a $4,000 treadmill is almost triple the cost of other high-end versions on the market.

So why make one now? It all has to do with Peloton's quest for fitness domination.

It's not about the hardware

These days, Peloton isn't exactly a scrappy startup. The company raised $325 million last spring and is now valued at about $1.25 billion, making it a so-called unicorn.

In 2016, Peloton tripled its annual revenue to $170 million, and the company now has 600,000 subscribers, who pay $39 a month.

But Foley is quick to point out that Peloton isn't a legacy exercise-equipment company and isn't in the same league as a brand like NordicTrack or ProForm.

"We're not a hardware company," Foley said. "We don't compete with those companies. Those companies are yesteryear."

What Foley thinks makes Peloton a company of the future is threefold: the classes, the instructors, and the community surrounding Peloton, which borders on fanatical.

"We're not committed to trying to sell you a treadmill," he said. "We want to get you fantastic content and great classes and instructors and community — whenever you want it, however you want it, so it works for you."

Still, Peloton is making hardware — and expensive hardware at that. The Peloton bike costs $1,995, and the treadmill costs $2,000 more. Even Foley acknowledges it doesn't look great.

"What we need to work on is making it the best value," Foley said. "It is the best value, but the optics of it, with that $4,000 price point ..."

To curb some of the sticker shock, Peloton is offering financing for the Tread. Current owners of the company's bike can get the Tread for $110 a month for 39 months after a $250 deposit, and new customers will pay $149 a month after the deposit.

Foley compares the cost when split between two people to a gym membership. In cities like New York, where Peloton is based, gym memberships can cost $75 a month on the low end.

The best of both worlds

The Tread uses technology that's a bit unusual for treadmills. Rather than a standard belt, the Tread is made up of 59 individual slats, which better absorb shock and are easier on your joints.

The Peloton Tread has easy-to-use speed and incline knobs on the arms rather than buttons in front of you. Peloton

The machine also differs from standard treadmills in a seemingly minor — but game-changing — way.

Rather than a screen full of buttons in the front of the treadmill to adjust speed and incline, the Tread has two knobs on either side bar, at about elbow height. To make the belt faster or steeper, you just gently turn the knob forward.

When I tried the Tread at CES, I was instantly impressed by that feature. When running fast on a treadmill, I'm always worried I'm going to trip and fall frantically trying to press the buttons. Not only are the knobs more convenient, but they made the machine feel safer to use.

I didn't brave a jog — better yet a sprint — on the Tread, but I could also feel the difference with the slat belt. It seemed springier and spongier than standard belts on other treadmills, and I felt as if the impact would be gentler on my knees and hips, which are always sore after a run.

But what really made the Tread special was on the screen. You can choose from a variety of workouts, from 20-minute run to 80-minute boot camps to evening yoga.

Just like with Peloton's cycling classes, the instructor looks right into the camera and urges you on, making you feel as though you're in class with them.

You can also choose a class based on the type of workout or music you want. You can even preview the playlist — so if you're not that into listening to Fall Out Boy while you run, for example, you can choose another workout.

The interface is clean, simple, and easy to navigate, with nice features like a "now playing" module and a leaderboard. Peloton offers an iOS app too, so even if you don't want to shell out for the Tread, you can still take Peloton's classes.

It wasn't until watching the classes and experiencing firsthand the immersive screen that it clicked for me: Peloton is providing all the features of a trendy workout class while letting you enjoy it in the privacy of your home.

It's a feeling of community without having to drive miles to the nearest gym, or cram into a crowded workout class in a big city. It's one-on-one attention without the often embarrassing or expensive experience of hiring a personal trainer.

And the best part: You can work out in whatever you're comfortable in, because no one else can see you.

In short, Peloton is offering the very best of both worlds — if you're willing to pay the price.

The cult of Peloton

Before checking out the Tread at CES, I asked an owner of the Peloton bike what she thought of the service. She ended up writing me five paragraphs about her love for the product.

"My fingers can't keep up with my love for Peloton," she said. "I love that I can hop on the bike at a time that works for me and ride alongside hundreds of other people. I feel like it's a live class because of how the instructors engage with the audience — in studio and at home — and the leaderboard reminds me I'm racing against others. And it works for people who can't get to a workout because of a busy life."

Her sentiments are the norm among Peloton users, who congregate on Facebook pages, have made celebrities of Peloton instructors, make pilgrimages to "the mothership" in New York for live classes, and continue to pay the $39 subscription fee month after month.

Foley says that level of super-fandom is one even the founders didn't expect.

"I was totally surprised by it," Foley said. "When I started Peloton with my cofounders, I saw clear as day what it was going to look like and how it was going to work — the technology, the hardware, the software, the business model. I saw everything except the community. The community has blown me away."

Foley says he hopes to replicate that fandom with the Tread in Peloton's pursuit of "tens of millions" of global subscribers, adding, "I'm crossing my fingers."

"What do we do? How do we do it? We don't," he said. "It's been created on its own."