The instructors are 1 part DJ, 1 part program designer, 1 part hype person, 1 part personality, 1 part community leader, etc...
Recorded videos work fine, all (I think) Peloton classes are available in the back catalog.
I'm pretty self motivated (I power lifted for years, which is a huge grind), but my cardio work has always been more intense and effective when instructor led.
Also, hyping people up is hard, and building a dedicated audience is harder. They pay a lot because if the popular instructors leave, so will the users.
While I find that works well in a private class setting "Great job Brenda! You're really improving!" since hundreds, even thousands of people take Peloton classes, you have a very low chance of acknowledgement and the teacher spends a lot of time reading off "Congrats on the 100 rides spf100! Thanks for coming to my class WineGirl21231! 1000 rides for Luv2RideMan12!"
I don't own a Peloton, but I do spin classes, live online yoga classes and run and bike on my own. I will probably buy a Peloton if prices come down on the secondary market as the pandemic ends.
I was skeptical too at first, now you'll have to pry my Peloton bike from my dead cold hands. It's been a game changer for me.in terms of fitness.
At Peloton's scale, I imagine recordings would work just as well. But, the instructor does the same things. For live classes with smaller groups, there can be a lot of 1-on-1 interaction.