Peloton Joins Companies Blaming Lower Earnings on Apple's Tracking Restrictions (gizmodo.com) 74
Peloton, the makers of an internet-connected exercise bike, saw their stock price drop 35% overnight on Thursday, reports CNBC. "At least four Wall Street investment firms downgraded the stock following Peloton's dismal fiscal first-quarter financial report... Peloton's stock has fallen 63% year to date."
The company had cut its annual revenue forecast — by $1 billion — and lowered its projections for both profit margins and paying subscribers. Bloomberg reports: At best, Peloton currently expects to have 3.45 million connected fitness subscriptions by the end of the fiscal year. It had previously called for 3.63 million. And gross profit margin will be 32%, compared with an earlier forecast of 34%. All that will add up to a loss of as much as $475 million, excluding some items....
On a more upbeat note, the company hinted that it plans to launch new products in the coming weeks and months. Peloton has been working on a rowing machine and a heart-rate monitor that attaches to a wearer's arm, Bloomberg News has reported.
The article suggests Peloton's business was hurt by the end of lockdowns, supply-chain constraints, and the cost of freight. But they also point out another factor. "Like several other companies, Peloton also blamed Apple Inc.'s ad-related privacy changes, which have made it more difficult to target shoppers based on their interests." Apple's new Ad Tracking Transparency feature (or "ATT") now first asks users to deny or allow apps to track their activity for the targeted advertising which had apparently been boosting Peloton's business.
And tlhIngan (Slashdot reader #30,335) tipped us off to a larger trend, since Gizmodo reports that Peloton "isn't the only company that has pointed accusingly at Apple lately." When reporting its third quarter earnings at the end of October, Facebook (now called Meta) — which depends on targeted ads for almost 98% of its revenue — said that ATT had decreased the accuracy of its ad targeting. The feature also increased "the cost of driving outcomes" for advertisers, Facebook COO Sheryl Sandberg explained, and made it harder to measure those outcomes. "Overall, if it wasn't for Apple's iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth," Sandberg said.
On Sunday, the Financial Times reported that ATT had cost Snap, Facebook, Twitter, and YouTube an estimated $9.85 billion in lost revenue in the second half of this year. That's an 87% increase year over year.
The company had cut its annual revenue forecast — by $1 billion — and lowered its projections for both profit margins and paying subscribers. Bloomberg reports: At best, Peloton currently expects to have 3.45 million connected fitness subscriptions by the end of the fiscal year. It had previously called for 3.63 million. And gross profit margin will be 32%, compared with an earlier forecast of 34%. All that will add up to a loss of as much as $475 million, excluding some items....
On a more upbeat note, the company hinted that it plans to launch new products in the coming weeks and months. Peloton has been working on a rowing machine and a heart-rate monitor that attaches to a wearer's arm, Bloomberg News has reported.
The article suggests Peloton's business was hurt by the end of lockdowns, supply-chain constraints, and the cost of freight. But they also point out another factor. "Like several other companies, Peloton also blamed Apple Inc.'s ad-related privacy changes, which have made it more difficult to target shoppers based on their interests." Apple's new Ad Tracking Transparency feature (or "ATT") now first asks users to deny or allow apps to track their activity for the targeted advertising which had apparently been boosting Peloton's business.
And tlhIngan (Slashdot reader #30,335) tipped us off to a larger trend, since Gizmodo reports that Peloton "isn't the only company that has pointed accusingly at Apple lately." When reporting its third quarter earnings at the end of October, Facebook (now called Meta) — which depends on targeted ads for almost 98% of its revenue — said that ATT had decreased the accuracy of its ad targeting. The feature also increased "the cost of driving outcomes" for advertisers, Facebook COO Sheryl Sandberg explained, and made it harder to measure those outcomes. "Overall, if it wasn't for Apple's iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth," Sandberg said.
On Sunday, the Financial Times reported that ATT had cost Snap, Facebook, Twitter, and YouTube an estimated $9.85 billion in lost revenue in the second half of this year. That's an 87% increase year over year.
Good. (Score:5, Insightful)
Re:Good. (Score:5, Insightful)
I came to write the exact same comment.
Good job Apple, good job.
Too right (Score:4, Insightful)
Now, go enjoy that Coca Cola... don't even think of drinking that nasty fluoridated tap water!
Re: Too right (Score:5, Insightful)
Re: (Score:3)
Re: Too right (Score:1)
Re: (Score:1)
Re: Too right (Score:2)
Coca-Colaâ(TM)s target market is "Human, thirsty."
It's a bit more easy market to reach than "middle aged women who may be interested in a hobby TIG welder."
Re: Good. (Score:2)
Re: (Score:2)
anytime a company like Peloton (or any other) loses revenue because people can opt out of targeted advertising I celebrate a little.
That's on odd take on a $1500 exercise bike. Oh, wait, $1350, "for less affluent people." Though still affluent.
I paid $100 for an exercise bike. It has no ads. Peloton did nothing to try to stop me.
You can get a full-featured, fancy bike on amazon for under $350. And people are going back to gyms.
Re:Good. (Score:5, Insightful)
You aren't the target market. Targeted ads at Peloton buyers are valuable precisely because they are people with lots of money and not much sense.
Re: (Score:2)
I'm an active stock trader, so I am exactly the market that their blaming-apple BS is targeting.
Except, I read their SEC filing, so I'm not convinced.
I've been laughing at people "buying the dip" on that stock all year.
And it still hasn't found its floor.
Re:Good. (Score:4, Insightful)
And don't forget that you're now required to have a paid subscription in addition to the cost of the Peloton. Ridiculous! And they wonder why people aren't buying more!
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I paid $100 for an exercise bike. It has no ads. Peloton did nothing to try to stop me.
I inherited a regular bike from my uncle and bought a Schwinn magnetic resistance bike trainer [stationary...stands.com] so I can *also* ride it inside.
A quick intro to the different types of stationary bike trainers [stationary...stands.com]
Perhaps Peloton's problem here is that they're an over-priced solution to a problem easily solved once people feel comfortable riding outside again...
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If they came with an LCD I'd have gotten the stand, and I had to make a stand for my real bike to make room for the exercise bike anyway...
I think really their problem is that they're over twice as expensive as other luxury options! And nobody cares anymore. Rich people briefly wanted fancy bikes to quiet-brag on social media during the lockdown. But it is past that short window where your friends give you positive attention if you post about "I bought an exercise bike." Nobody is going to say, "Oh, that's
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anytime a company like Peloton (or any other) loses revenue because people can opt out of targeted advertising I celebrate a little.
That's on odd take on a $1500 exercise bike.
No, it isn't "an odd take" on an exercise bike. Or any "take" on a bike.
It's "a take" on a company crying and complaining over the money they make from abusing unwilling victims, after their victims put a stop to that abuse.
It's also not an "odd take" at all. The company has just released a statement explicitly detailing how they are fully OK with victims being abused, and that this abuse should happen more.
So the company being devalued by wall street? They are OK with this.
They are being abused, and thi
Re:Good. (Score:5, Insightful)
You can't lose(revenue) what wasn't yours to begin with.
Peloton made an assumption, they were wrong. That's not Apple's fault.
Re: Good. (Score:2)
Personally, I prefer targeted advertising. I'd much rather get stuff I am actually interested in than random shit I would never buy.
Re: Good. (Score:2)
Do you prefer it when you buy something, then you see ads for that product for the next year? Cause that's targeted. Targeted poorly, but targeted.
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It's not about the ads you get. It's about the information about you that they hoard, and what can be done with that.
Re: Good. (Score:2)
Great but (Score:5, Insightful)
This is good news for Apple users, but people shouldn't have to rely on corporations to protect their privacy. This kind of thing should be illegal, like it is in GDPR countries.
Having said that, a lot of apps are not GDPR compliant so clearly the law needs to be a bit stronger.
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100 posts is like 3 days for me.
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The GDPR law is toothless and overbearing at the same time, but in all the wrong ways.
For a small company with a webpage, it's a landmine waiting for a shyster to extort some money from them. For large companies with the relevant legal department it's as simple as writing yet another click-through EULA.
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How does GDPR enable extorting money?
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It's been pretty common in Germany. Some lawyer finds a tiny mistake on your webpage and writes a letter along the lines of "We found a mistake here that could cost you a lot of money. But you could hire us for a lot less to tell you to fix it". Of course with the unspoken undertone of, well, if you do NOT hire them, a copy of your faulty page goes to court and it costs you.
I bet we'd have seen many more, and many more creative, schemes if the biggest "Abmahnabzocker" didn't already put a bullet through his
Nope (Score:3, Informative)
The reality is that there are only so many people who are willing to overpay for a Peloton. Most people can just throw a tv + apple tv or a tablet in front of them while they workout and be just as happy. Apple fitness exists. So do many other things. You don't need to buy one of these overpriced, unsafe devices.
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I think the biggest thing holding back Peloton is the leftist MSM machine.
Why isn't CNN doing non-stop clips on owning Pelotons, the Hollywood celebrities doing photo shoots and interviews while riding. Where's the pundits calling anyone who doesn't exercise on a Peloton bike out for "clogging hospitals" and "putting everyone else at risk". Then they need a grass roots campaign calling anyone who owns a competing product a racist or shaming them for "not being able to afford a genuine Peloton". When I se
Re:Nope (Score:4, Insightful)
CNN “attacked” Aaron Rodgers because he’s an anti vax nutjob. The longer he spoke the bigger the train wreck. If your goto person for medical advice is Joe Rogan then you just might be a dumbass.
Re: (Score:2)
> CNN “attacked” Aaron Rodgers
See, it's possible to find common ground. Maybe we can build on that foundation.
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If he could do the same with the eventual infection, I also wouldn't have a problem with it. One more idiot croaking isn't really going to matter.
So much money made on tracking. (Score:5, Insightful)
They need to pay users for data/tracking (Score:3)
Right now it's against Apple's ToS, but in the future we should get paid a percentage of ad revenue generated. That would give everyone an incentive to allow tracking.
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Right now it's against Apple's ToS, but in the future we should get paid a percentage of ad revenue generated. That would give everyone an incentive to allow tracking.
Right now it's against Apple's ToS, but in the future we should get paid a majority percentage of ad revenue generated. That would give companies an incentive to stop tracking.
FTFY
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If they were to give you $1/month for molesting your integrity, they would just increase the prices of their devices correspondingly.
it's not a strong business (Score:4, Informative)
If your fortune is so closely couple with another company. I think investors are realizing that and pulling out. Why not invest in a top tier company instead of one of the million bottom feeders.
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But rea
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I think in the future we're all going to expect to hand over marketing data AND cash in exchange for products and services. Those companies that don't do it, won't be able to compete with those that do. Partially because they are missing out on a revenue stream, but mostly because they won't have the marketing data.
Welcome to the Information Age, where information is a commodity of exchange. And the supply of information is obscenely high as it seems like every Tom, Dick, and Harry is willing to hand it ove
Re: (Score:2)
Welcome to the Information Age, where information is a commodity of exchange.
Increasingly though, the 'exchange' is of the same nature as that involved in feudalism, where we allow our autonomy and privacy to be taken away in order to be allowed to earn a living and participate in the greater civilization. Though I suspect that feudal serfs had a more conscious recognition of their lot in life than most of our fellow citizens do.
And the supply of information is obscenely high as it seems like every Tom, Dick, and Harry is willing to hand it over for free or for a perceived discount.
In my experience the average Tom, Dick, or Harry isn't sufficiently aware that they've effectively signed a contract - never mind knowing the terms - to be
couldnt possibly be (Score:5, Insightful)
I actually like peloton as a company, and yeah there are hazards inherent with exercise equipment. But other brands of treadmills dont eat that many children. But no, it must be apples fault revenues are down.
Re:couldnt possibly be (Score:5, Informative)
Sales are down cause they needed to recall like 70 percent of their units last year because they were literally sucking children underneath the units and shredding them. Im only slightly exaggerating - they completely screwed the pooch on product safety - for what amounts to practically their ONLY product. Look up the videos. .
This. Plus the fact that they turned off the free mode [businessinsider.com] trying to make people who paid $4000 for the hardware to pony up $40/month to actually use it. That was a prop for short term revenue gains which blew up spectacularly in their corporate faces. Between the two, I can see why they'd blame Apple.
Not really... (Score:3)
Re:Not really... (Score:5, Insightful)
As a stock trader I already read their revenue filing. You're absolutely right. This has nothing to do with apple.
They built a huge pile of cash last year, but this year they're losing money and have huge and rapidly swelling inventory. They could (and probably should) stop production for about 3 years and just sell down what they have.
They can send a PR release to the media blaming Apple, but their filing didn't blame Apple... oh, right, they'll get in trouble if they lie in their filing! lol
That their app also tracks your location all the time and sells the info, that's just creepy. It is a stationary exercise bike. That means they're tracking you and selling the information when you're not using it.
I tried to go to their website to check their current prices while researching the stock, and they won't even show their sales pages without location tracking turned on in the browser! I don't think I've ever seen that from a company that sells a physical product. Unbridled greed, and it is biting them in the ass because now that their Big Year is over they could really use some customer preference. But blaming Apple here and emphasizing their creep-factor is not going to help with that.
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As far as privacy settings go, there should be an option for location permission for "pretend to allow" that feeds randomized bad data.
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Android has that for developers, not sure about Apple. Developers have to be able to set the location, for location-aware apps, otherwise how would you test?
Re: Not really... (Score:2)
Re: (Score:2)
Now that health clubs are opening up again, Peloton sees lower sales in the future.
And perhaps lower home use (lower use means fewer ads served/seen) in favor of either riding at the gym/club or outside. Riding, running, walking, ... inside, at home, by yourself, on a machine is *boring*. Boring leads to ignoring. Other cycling/walking/running options are more interesting.
The fad is over. (Score:4, Insightful)
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Win, Win!! (Score:3)
Hopefully this will put a dent in the “advertising as business model,” and slow down the marketing manipulation. It has gone too far.
What is the real business model? (Score:4, Insightful)
Of course they could be lying, because management always is looking for scapegoats when they screw things up. In Peloton's case I would lean towards an attempt to cover their collective ass since they have so many other issues right now.
OTOH there are a lot of companies blaming losses on new restrictions on tracking, and some of those are actually true. The only possible conclusion is that we live in a for profit surveillance society, obviously not a good situation. With privatized spying there is no protection against the misuse of data or incorrect data, and the government can buy whatever info it wants about you. There is effectively no legal right to privacy under these conditions.
The US Constitution has been suspended in the pursuit of greed.
Re: (Score:2)
Actually, I think that's something the US Constitution did not address. Can you imagine James Madison getting up and saying to his collegues "Shouldn't we put in something saying corporations can't track people?". Even the Feds are only stopped by two things:
1) they aren't supposed to do anything the constitution doesn't explicitly permit, and
2) the Supreme Court has drasticly reinterpreted what the text of the constitution actually says. (There's no obvious clear connection between tracking and "search
Hmmmm (Score:2)
It's rather scary (Score:4, Insightful)
When you see the size of the drop in profits companies like Facebook, Google, Peleton, etc. are blaming on an iOS privacy change, it's frightening to think about how much money companies are making by tracking you and selling your personal information.
I know people here are like "boo freakin' hoo" about this - but these sorts of announcements aren't aimed at you. Facebook, Google, and their ilk know people don't like what they really do to make money - it's why they put so much effort into pretending their business models are something other than selling your information. I don't even think it's aimed at their shareholders, except maybe the handful who hold hundreds of millions of dollars in their stock. I think it's a dogwhistle for their congressional puppets, letting them know their masters are upset and they need to do something about this situation (since they're the only ones who can)..
Re: (Score:2)
Yes, probably. The lengths, for example, Google goes to to obscure what their core business is, is legendary. Although since they kill almost everything a few years later to make space for more misdirection by more grande announcements, anybody that can think in larger time-frames than just a few months has long since noticed what is going on.
Also agree, that this is basically corruption and they let those they bribed know that they are unhappy publicly.
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Oddly, when I interviewed at Google (mid-late 2000s before they dropped "Don't be Evil"), they were pretty damned upfront about it. They flat out said, "We're an advertising company".
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Oddly, when I interviewed at Google (mid-late 2000s before they dropped "Don't be Evil"), they were pretty damned upfront about it. They flat out said, "We're an advertising company".
People they hire need to know...
Evil snooping assholes make less money? (Score:2)
My hart bleeds....
Re: Evil snooping assholes make less money? (Score:2)
Your pet deer?
Re: (Score:2)
My hart bleeds....
Oh deer! Does it hurt? Hopefully you can stagger to an emergency room, where the staff can fawn over you, before you bleed out. As long as you're not behind on your insurance, that is.
real world (Score:2)
Welcome to the real world, where people call you a creepy stalker when you track them.
Messed up pricing model (Score:2)
So, their over priced exercise bikes that are essentially a tablet built on to an exercise bike that sells for thousands of dollars and requires a monthly subscription to get any benefit from is no longer a profitable business model?
Who would have thought consumers would eventually clue in that they could just buy an exercise bike and use their tablet or TV to stream workouts instead.
Blaming revenue on lack of data mining capabilities on Apple is garbage.
How are Hula-Hoops doing? (Score:2)
Stock in fad falls?! Unpossible!
Tracking? (Score:2)
I thought those exercise bikes just sat in one place.
Go Apple! (Score:1)
Apple saved people a billion dollars (Score:2)
There's nowhere to go but sideways! (Score:2)
I don't think reaching people on Apple's devices is the problem. One could make the argument that because Apple's iPhones are so expensive that your customer base would be overly represented in Apple's ecosystem, but I don't think that is true. There is still the perception that Apple users are hipsters, but I see a ton of people that are the total opposite of that using iPhones, and I think that they just get sucked into the ecosystem. We're talking about people who see an AT&T ad or Verizon ad about t
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it's a shame they're locked down, aside from any automation of resistance settings - I don't know why spin instructors aren't running classes over Twitch stream. All you and they need is a Tablet stuck to the front and you're off to the races.
Ancient gizmos for an ancient guy (Score:1)
Tracking Restrictions? (Score:2)