Peloton loses $1.5bn in value over ‘dystopian, sexist’ exercise bike ad

The exercise bike company, Peloton, has suffered a significant blow to its value, losing almost $1.5bn (£1.1bn), following a massive backlash against their Christmas advert, which has been widely criticized as “sexist and dystopian.”

The controversial 30-second ad, titled “The gift that gives back,” features a woman (aka Peloton Girl) receiving an exercise bike from her partner on Christmas morning. The woman’s journey to fitness is documented through video diaries, where she expresses her transformation and gratitude. While the advert was initially released in mid-November and garnered almost 2 million views on YouTube, the tide of criticism surged online, leading to a slew of parody remakes.

Critics denounced the advert as “offensive” and “dumb,” pointing out that the woman was already slim at the start, making the implication that her partner wanted her to become fitter and lose weight seem patronizing and harmful.

Peloton, known for selling high-end bikes with screens for virtual spin classes and endorsed by celebrities like David Beckham and Hugh Jackman, saw a sharp decline in its value, losing $1.5bn in total. Before the controversy, the company’s value had reached $9.39bn. The public backlash resulted in a 9% drop in shares on Tuesday and an additional 6% drop by lunchtime on Wednesday.

Ash Bendelow, the managing director of the UK creative agency Brave, described the advert as “cringe, old-fashioned, and tone-deaf,” drawing parallels to outdated notions from the 1950s. The ad was compared to Charlie Brooker’s dystopian series “Black Mirror,” partly due to the woman’s display of gratitude toward her partner while showing him vlog clips, seemingly on the following year’s Christmas.

Despite still gaining thousands of views every hour on YouTube, the video is experiencing a disproportionate number of “thumbs down” ratings compared to “thumbs up.” In response to the overwhelming negativity, Peloton decided to disable comments on the YouTube post. However, the story doesn’t end there, as other social media platforms have witnessed even more graphic reactions from the audience.

Peloton, known for selling treadmills as well, has set its sights on becoming the “Netflix of fitness.” According to the company, at its core, Peloton sells happiness. It positions itself not just as an exercise bike provider but as an innovative global technology platform with immense potential.

The company’s flagship product is a £2,000 stationary bike equipped with a touchscreen. Customers can access fitness classes through streaming or downloads for a monthly fee, allowing interaction with instructors and fellow members from the comfort of their homes. Features like digital “high fives” create a sense of camaraderie among users.

Founded in 2012 by John Foley, a former executive at Barnes & Noble, Peloton went public on the US stock market in September with a valuation of $8bn despite being incurring losses. After launching in the UK in the previous year and establishing nine showrooms, Peloton had already sold 577,000 hi-tech bikes and treadmills by June. The company aspires to reach 14 million sales in the US, UK, Germany, and Canada.

In January, the Advertising Standards Authority (ASA) in the UK introduced new rules against adverts perpetuating harmful gender stereotypes. Brands like Philadelphia cream cheese and Volkswagen faced bans for their campaigns which were considered offensive. While the Peloton advert has sparked outrage on social media, legal experts believe it does not violate ASA rules but does not contribute to gender equality either.

Peloton, in response to the criticism, expressed disappointment in the misinterpretation of their advert while appreciating the support from those who understood its intention to celebrate fitness and wellness journeys. Despite the controversy, some believe the outrage may not significantly impact sales and might even lead to an increase in purchases.

Although the ASA has received only one official complaint so far, the focus of the objection was not the apparent sexist tone of the advert but rather the perception that the woman featured was cycling at an impossibly fast pace.

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