And by the way, this is where the work we’re doing in personalization. We’ll be having its biggest impact and where some of the partnerships we’ve struck like TikTok, by a way of example will help drive significant growth, I think. Okay. Sorry, Liz, over to you.
Liz Coddington: And I was just going to point out that if you look at our guidance, what it implies is that Q2 was sort of the low of our paid app subscriber base. That makes sense because we just completed the time frame that our legacy paid app members were able to receive the App Plus level of content for the App One price. And we were actually quite in a positive way surprised that on the retention level of those subscribers given the expiration of their legacy period. So we feel like we’ve sort of bottomed in Q2. And now the question is how quickly can we grow the sub base from there over the next couple of quarters. And as Barry pointed out, there’s a lot of great things that we are working on and that those features will continue to roll out over the coming quarters.
And so there is some uncertainty on how quickly we’ll be able to grow it. And then there’s also things like as we talk about our Peloton for business offerings and our corporate wellness space, that’s a great opportunity for us. We are — those deals, they’re negotiations, and they do take time. And so there’s a lot of uncertainty on when those deals and negotiations will close. And those could be a great accelerant and app subscription growth for us. But there isn’t a whole lot contemplated in our guidance in the next couple of quarters for that to happen. So there’s a lot of upside potential. It just reflects the uncertainty of how quickly we will be able to accelerate that over the next couple of quarters. But we’re — as Barry said, we’re super optimistic about it.
There’s lots of great signs, particularly on the lower churn front and the engagement front that suggests that the app could be a great opportunity for us to accelerate growth.
Operator: Thank you. And our last question for the day will come from the line of Lee Horowitz with Deutsche Bank. Your line is open.
Lee Horowitz: Great. Thanks for taking the question. Barry, you talked in the letter about outgrowing the overall Connected Fitness market. Subs growing sort of marginally year-on-year, which would suggest that the overall market sort of remained depressed at this point. I guess how do you think about sort of what’s holding the market back and growing more meaningfully at this point? How do you think about the conditions that maybe allow some of those headwinds to abate and sort of what do you think about the sort of long-term sort of growth rate of this overall market at a steady state? Thanks.
Barry McCarthy: I don’t really know what the long-term growth rate of the market is. It’s got to be at least population growth. I would think with a couple of accelerants. The more you age, the more important it is that you invest in your health and the more likely you are to have disposable income available to make that investment for one. Two, no question that product innovation drives growth. And there’s a lot of really interesting technology coming into the marketplace to help drive that. In our case, we really only scratched the service and gamification. That’s going to be a vector for growth for us. Liz mentioned, corporate wellness, that is having a moment in corporate America for sure, where companies are investing at the margin increasingly in fitness, nutrition, mental wellness by a way of example.
And I think we’re well positioned to participate in that. And then lastly, it’s pretty clear from the introduction of Row and the introduction of Tread+ innovation drives growth. And we’ve been busy saving ourselves for the last two years. And now we’re positioned to invest in innovation. Again, it’s innovation that put us on the map in the first place. There’s a lot of talent in the building. It’s a matter of getting it organized and focused in a really productive way. I think Nick is going to be an impactful player there. I think Lauren is going to be quite impactful with respect to our approach to marketing as well, plus there are a bunch of product innovation drives growth, geographic expansion drives growth. The unaided brand awareness for the product in the US is 55%.
Okay, anybody now by a way of comparison what the unaided brand awareness is for Starbucks or Coke. They’re north of 90. So there’s still a lot of untapped potential even in the US and by a way of comparison, the unaided brand awareness in the UK is 37%. And in Germany, it’s in the 20s. And so — and I don’t know what it is for LatAm, but it’s got to be significantly lower. And we’ve got a lot of strength in the Latinx community from a content perspective. So product innovation, geographic growth and product relevance in commercial and corporate wellness should all be vectors for — to drive an acceleration in sales in the next couple of years.
Operator: And Mr. Stabler that was our final question. I’ll turn the call back over to you for any closing remarks.
Peter Stabler: Thank you, everyone, for joining us today. We look forward to speaking with you next quarter. Have a good day.
Operator: Thank you all for participating. This concludes today’s program. You may now disconnect.
