As the customer experience gets better through more live content and hardware, more people work out with Peloton. This is the main engine: as the customer experience gets better, more people work out with Peloton, and, as it turns out, people also work out more often with Peloton than they did before. This is the interesting part, as multiple things are driven from the volume of workouts:

As more workouts happen on Peloton: A community is developed, both between the rider and the instructor and among riders.

Peloton collects increasing amounts of data that can be used in a variety of ways to make the experience more compelling.

The Peloton brand increases in value in the eyes of existing customers. Each ride serves as powerful marketing content for Peloton itself.

Instructor talent is increasingly attracted to Peloton, as the growing audience provides increasing opportunities to become a celebrity.

Each of these offshoots has its own tie back to the flywheel:

As the community grows, the customer experience improves, which drives more workouts. The difference between a live ride on Peloton and watching a static video workout is the community. Peloton’s social features create an environment where the more users are riding, the more compelling the ride. These include the leaderboard, high fives, and instructor shoutouts.

As Peloton collects data, it improves the customer experience, for both future and past rides.

A brief glance at the data: I looked at some rides that took place about 8-9 days before publish, and checked how many ratings users left (a good proxy for how many users have taken the ride). This is far from a comprehensive analysis, but there appear to be clear tiers: Cody Riggsby and Alex Toussaint’s rides are pushing 40-50K ratings. The middle tier has instructors like Leanne Hainsby and Ally Love, whose rides get 10-20K ratings. Then at the bottom, you have folks like Christine D’ercole and Sam Yo who get in the 4-5K range.

This tells me that there is a small number of instructors who are carrying the platform for Peloton. I don’t know how Peloton instructors are compensated, but I’d have to believe that the top handful of instructors are underpaid compared to the value they create for Peloton