Tech group Spotify (SPOT) slid lower today after it declared it was taking on “mindless” social media scrolling to launch a new fitness offering with exercise equipment maker Peloton (PTON).
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New Fitness Hub
Spotify, set to report Q1 earnings tomorrow April 28, has created a new ‘Fitness’ hub within its app where users will be able to access workouts from Peloton as well as a number of wellness creators. The content will be available in the form of both music and video and be available across all of Spotify’s apps on mobile, desktop and TV.
It said that both free and Premium users will be able to access dozens of playlists and instructional workouts from people such as Yoga With Kassandra, Caitlin K’eli Yoga, Sweaty Studio, and Pilates Body By Raven.
Peloton will deliver over 1,400 ad-free workout classes from its range of instructors to Spotify’s Premium users. That will cover apparently yoga, meditation, running, strength and cardio, but not hopefully all at the same time. They can be completed without the use of Peloton’s specialized equipment like its bikes.
Based on User Data
Spotify said the decision to leap into fitness content was based on user data. It said that nearly 70% of its Premium subscribers work out monthly and there are over 150 million fitness playlists on its service. It has also seen increased demand for workout music after the recent launch of its AI-powered Prompted Playlist feature.
“Time on Spotify should feel meaningful and intentional, not something that slips away in a blur of mindless scrolling. That’s why we’re always investing in experiences that leave you feeling more energized, in control, and empowered,” Spotify said. “We also look to our user base and the creators on our platform for inspiration.”
It will be hoping that the fitness move will add some legs to its share price, which is down 12% in the year-to-date. It has been hit by worries over competition particularly from rival generative AI tools.
Is SPOT a Good Stock to Buy?
On TipRanks, SPOT has a Strong Buy consensus based on 16 Buy and 4 Hold ratings. Its highest price target is $760. SPOT stock’s consensus price target is $635.53, implying a 24.25% upside.
