ClassPass Is Discontinuing Its Unlimited Membership Plan
Starting Wednesday, ClassPass is discontinuing its unlimited membership plan.
The monthly subscription service for gyms and workout classes is doing away with the plan that helped the company make its name, the company announced in a blog post on Wednesday. CEO Payal Kadakia wrote in the post that the decision "didn't come easily."
"The truth is there is a fundamental problem with the Unlimited plan," Kadaki wrote. "It can’t be a long-term membership option because it doesn’t align our business with our promise. What kind of business would we be if we wanted our members to work out less to reduce costs? We’d be sabotaging the vision at the very heart of this company."
ClassPass will continue honoring the unlimited plan for current members for another billing cycle, then those members will be migrated to a 10-class plan. Those members will receive 10 free classes every month for the first three months, the company said.
Initially called the "Netflix for workout classes," the unlimited plan helped ClassPass make its name, since it cost $99 for an unlimited number of classes, which can cost upwards for $30 per class. The company raised its unlimited membership to $125 per month in 2015, then bumped it to $190 per month earlier this year, which frustrated a lot of its users.
The company has experienced some turmoil in the past several months, including operational changes and rumors that the founder CEO was on the way out. But after the unlimited plan price hike, ClassPass added monthly bundles -- five and 10-packs of classes called Base and Core, respectively -- that customers could purchase at a lower price. The venture-backed startup was valued at $400 million in 2015.
The company was said to be doing well after introducing the class packs -- gross profit margin was close to 17%, up from a negative gross margin last year, according to a Business Insider report -- which may be why ClassPass opted to discontinue the unlimited membership.
While the 10-class pack is the most number of classes available through a monthly membership, users can buy add-on packs of classes through the app if needed. Kadakia wrote on the company's blog that ClassPass also plans to roll out new features in upcoming months to "enhance" memberships.
"You should know that despite this news, I am confident in where ClassPass is headed, as its founder and a user myself," Kadakia wrote in the blog post. "In the coming months, we have our sights set on new features and test rollouts that include on demand video, 'out of studio' experiences like group runs and social features that will enhance your membership. These new areas create more possibilities for all of you to lead inspired lives, no matter where you are or what you’re looking for."