‘We are seeing volume and interest in Peloton explode,’ says company president on listing day

This morning, Peloton (NASDAQ: PTON), the tech-enabled stationary bicycle and fitness content streaming company, raised $1.2 billion in its NASDAQ initial public offering. Despite dropping more than 10% in its first day of trading — ultimately closing down 11% at $25.84 per share — the IPO was a bona fide success. Peloton, once denied (over and over again) by VC skeptics, now has hundreds of millions of dollars to take its business into a new era. One in which, the media, hardware, software, logistics and social company attempts to become a generation-defining company akin to Apple.

Founded in 2012 — six years after Soul Cycle opened its first cycling studio in New York’s Upper East Side and two years before a Soul Cycle founder, Ruth Zukerman, jumped ship to launch her own indoor cycling business, Flywheel Sports — a man by the name of John Foley made the ambitious, some might say foolish, decision to start a company that would sell these exercise bikes direct-to-consumer. That way, you could take a Soul Cycle class, in essence, in the comfort of your own home. Even better, technology would improve the experience.

As my colleague Josh Constine recently described it, these bikes come outfitted with a 22-inch Android screen, transforming an outdated exercising experience and bringing it into 2019: “It makes lazy people like me work out. That’s the genius of the Peloton bicycle. All you have to do is Velcro on the shoes and you’re trapped. You’ve eliminated choice and you will exercise,” Constine writes.

Peloton’s ability to get people exercise — a feature driven by its talented instructors (some of whom were poached from competitor Flywheel Sports) — ultimately had venture capital investors funneling $1 billion, roughly, into the business. Today, Peloton operates dozens of showrooms across the U.S., counts 1.4 million total community members — defined as any individual who has a Peloton account — and over 500,000 paying subscribers. Why? Because the company, as stated in its IPO prospectus, “sells happiness.”

“Peloton is so much more than a Bike — we believe we have the opportunity to create one of the most innovative global technology platforms of our time,” writes Foley. “It is an opportunity to create one of the most important and influential interactive media companies in the world; a media company that changes lives, inspires greatness, and unites people.”

Peloton Bike Lifestyle 04

Peloton’s flagship product, a tech-enabled stationary bike.

Peloton’s community coupled with the high margins on sales of its $2,245 bikes had the company reporting $915 million in total revenue for the year ending June 30, 2019, an increase of 110% from $435 million in fiscal 2018 and $218.6 million in 2017. Its losses, meanwhile, hit $245.7 million in 2019, up significantly from a reported net loss of $47.9 million last year.

What’s next for Peloton? The opportunities are endless, given the company’s firm seat at the intersection of hardware, software, media content and more. A third product may be in the works, expansion to international markets or new instructors. Peloton is going after a massive market ripe for disruption. What’s certain is that we’ll see a whole lot of cash flowing into fitness tech copycats in the next couple of years.

Peloton, following a number of lukewarm consumer IPOs (Uber), nearly doubled its valuation to $8.1 billion this morning after pricing its IPO at the top of its range, $29 per share. To answer some of our most burning questions, we chatted with Peloton’s president William Lynch, the former CEO of Barnes & Noble, about the float.

The following conversation has been edited for length and clarity.

William Lynch

Peloton president and former Barnes & Noble CEO William Lynch.

Kate Clark: What’s next for Peloton?
William Lynch: We now have over a billion in capital to fuel more growth, especially in the area of product innovation.

Barnes & Noble’s Nook e-reader returns with a larger screen

I’ve always had a soft spot for the Nook. Barnes & Noble’s e-reader was more than just a rare competitor to Amazon’s steamrolling Kindle, it was a nice device with an interesting design — and one of the first in its class to now standard technologies like front lighting.

But good readers never really die, they just go into extended hibernation and people forget all of about them. And also they sometimes die. Anyway, it’s clear that the Nook division ultimately wasn’t the sort of exit strategy Barnes & Noble was hoping for (no one, it seemed, could predict Amazon), but it continues to release products here and there, including the bigger, better Nook GlowLight Plus.

The new reader maintains the classic Nook soft touch style, coupled with a considerably larger 7.8 inch screen featuring the titular front lighting. Bulkiness has always been a bit of an issue with the Nook, and that’s almost certainly more so the case with the larger footprint. It’s a sacrifice for a more comfortable device, and the price is certainly right though, at $199.

That includes 8GB of built in storage and your standard works-for-weeks-at-a-time battery. The physical page buttons, which Amazon has since come back around on are here, as well. Oh, and the new Nook is waterproof for all of those summer reading misadventures.

It his B&N stores on Memorial Day and will available online Wednesday May 29.

Hey look, it’s a new Barnes & Noble Nook in 2018

It’s true! It’s 2018, and Barnes & Noble just announced another Nook! You can preorder it today! All of these things are somehow  simultaneouslytrue. The Nook line has basically been a non-starter since 2016, back when the once ubiquitous bookseller offered up a dirt cheap $50 model. Even back then it felt like a strange anachronism.

The pricing on the new model is more inline with what you’d expect from a budget tablet, from, say Amazon. The Nook 10.1 runs $130. Aside from the titular screen size (at a middling 224 ppi), there’s really not much to talk about with what will almost certainly be a run of the mill budget Android tablet with 32GB of storage, two cameras and a headphone jack — which admittedly does qualify as a feature in 2018.  Barnes & Noble is calling it a “game changer,” because that’s what people do in press releases.

“The new Nook 10.1 provides a complete reading and entertainment experience on our biggest display yet,” Chief Digital Officer Bill Wood says in the release. “The soft-touch feel and lightweight design make it a perfect holiday gift for readers who want to enjoy their favorite books for hours, while also being able to browse, watch shows, listen to music, or send emails all from one device. The NOOK 10.1 is truly a game changer for the Nook lineup.”

Games will be changed when the device hits what’s left of Barnes & Noble’s stores on November 14.

The death of retail is greatly exaggerated

 I’ve been thinking a lot about retail these days and I’ve been connecting the dots between the seeming death of retailers like Ralph Lauren and the book industry. In short, we are feeling the seismic echoes of the 2008 crash right now on Main Street and things are both ugly and pretty at the same time. The book industry, like the music industry, nearly imploded when the world… Read More

Barnes & Noble drops its CEO after deeming him ‘not a good fit’

barnesnoble_featured Easy come, easy go in corporate bookseller land. Less than a year after starting his gig as company head, Ronald D. Boire has been unceremoniously let go from his CEO gig at Barnes & Noble. The once ubiquitous book store chain made the announcement today in a somewhat tersely worded press release, noting that its Board of Directors, “determined that Mr. Boire was not a good fit for… Read More

Barnes & Noble outsources Nook services and shutters 2 offices to save $13 million a year

Barnes & Noble

Barnes & Noble has revealed plans to outsource some services related to its Nook ereader as it closes two of its offices to save money.

The Fortune 500 firm, which remains one of the biggest bookseller brands in the U.S., has announced a partnership with Bahwan CyberTek (BCT), a software services and product company headquartered in India. Though Barnes & Noble said that it “remains committed to serving Nook customers,” it will now hand over control to “certain Nook technology services,” which will include cloud management and related development support for Nook software.

“Over the last two years, the Company has done a significant amount of work to improve Nook’s overall performance,” explained Fred Argir, chief digital officer at Barnes & Noble, in a press release. “While we have been able to reduce costs, we still have a lot more work to do to rationalize the business. We believe that by outsourcing certain technology functions of our Nook business we will further improve Nook’s performance.”

This isn’t the first time Barnes & Noble has outsourced development to third-parties — the company once made its own tablets in-house, but it shifted to hardware partnerships back in 2013, and Samsung was the first to bring a Nook tablet to market. Barnes & Noble continues to introduce new Nook tablets to market in conjunction with Samsung, so it appears that tie-up has worked well. While Barnes & Noble will continue to manufacture its Nook ereaders in-house for now, this latest move could signal the start of something more substantial, either in terms of expanding its ereader partnerships or considering its ereader plans altogether. Indeed, most data suggests that ereader ownership is in decline, partly due to the rise in smartphones and tablets, and partly due to a reported resurgence in physical books.

However, Barnes & Noble has been gradually moving away from its reliance on books to sell a myriad of products in its stores, and recent results have been looking more promising. But its Nook business has been struggling, which is why it’s not only outsourcing services to BCT, but it’s also closing offices in Santa Clara and Taiwan. Barnes & Noble said that this should help it save around $8 million in expenses, and $5 million in capital expenditure. However, the company also expects to pay around $6 million in severance pay and other “transition related” costs.

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Samsung and Barnes & Noble launch the Galaxy Tab E Nook, a $250 9.6-inch tablet for readers

Samsung E Nook

Barnes & Noble and Samsung have added a new device to their burgeoning range reader-focused tablets — the $250, 9.6-inch Samsung Galaxy Tab E Nook.

The new tablet comes a month after the duo launched the 8-inch, $400 Galaxy Tab S2 Nook, which followed on from the $150 Galaxy Tab 4 Nook tablet and $250 10-inch alternative that launched last year.

Samsung E Nook

Above: Samsung E Nook

While the latest model sports a larger screen than its predecessor, it is also $150 cheaper which should tell you all you need to know about its specs.

Indeed, the the Samsung Galaxy Tab E Nook sports an HD 9.6-inch display at 12800 x 800 resolution, compared to the impressive Super Amoled 2048 x 1536 QXGA of the Galaxy Tab S2 Nook. The E Nook also only has half (16GB) the built-in memory of its more expensive brother and weighs 10 ounces more, but there is no mention of what processor this puppy packs.

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To try to tempt new users on board, Barnes & Noble is also launching a month-long trade-in program from today, one that could knock $50 off the price of any Samsung Nook tablet in exchange for your old Nook. However, it’s also inviting anyone to trade-in their iPads, Kindles, and other Samsung tablets to receive a credit of up to $200.

Though Barnes & Noble used to build its own tablets, it announced back in 2013 that it would switch to hardware partnerships instead, and Samsung has been its sole buddy to date. Barnes & Noble continues to build its own e-readers in-house.

While the devices are similar to other Android tablets on the market, these particular versions are laden with reader-focused software from the get-go, including the Nook Shop for buying e-books and a shortcut function that takes readers directly to their current book.

Samsung and Barnes & Noble launch the Galaxy Tab S2 Nook, a $400 8-inch tablet for readers

Galaxy Nook

Barnes & Noble and Samsung have launched the latest iteration in their joint mission to combine tablets and e-readers.

The Samsung Galaxy Tab S2 Nook follows on from the $150 Galaxy Tab 4 Nook tablet that launched last August, and the $250 10-inch alternative that followed two months later.

Galaxy Tab S2 Nook

Above: Galaxy Tab S2 Nook

While Barnes & Noble once made its own tablets, it revealed back in 2013 that it would be relying on hardware partnerships instead — and Samsung was the first of thest to come to market. It’s worth noting here that Barnes & Noble continues to build its own e-readers in-house.