The Fitness Shift That Should Worry Every Gym Owner
More exercise omnivores are opting for expanded online workouts and services like ClassPass
By RACHEL BACHMAN
Jan. 23, 2017
Kim Alexander arrives at a Nashville, Tenn., law firm by 7 a.m., looks at her phone and goes to work—swinging a
kettlebell.
Ms. Alexander, a 46-year-old legal assistant, gets to the office early four days a week and does workouts with Daily
Burn, a subscription service that offers hundreds of video exercise classes for $15 a month. She no longer belongs
to a gym and has no plans to rejoin.
“I can just pop up my iPhone, click it and go,” she says.
Streaming fitness is surging. So are services that let
people sample nearby fitness studios for a monthly
fee, according to new data from Atlanta-based firm
Cardlytics. Many subscribers to these on-demand
fitness options are siphoning spending from traditional gyms, the data shows.
Payments to on-demand fitness services jumped to
7.7% of total spending on workouts last year, up
from 4.8% two years earlier, according to Cardlytics.
Spending for on-demand fitness now exceeds
spending at yoga and Pilates studios, according to
the data.
Traditional gyms still command the overwhelming
majority of workout spending, but that share fell to
about 73% in 2016 from nearly 78% in 2014.
Daily Burn offers a live streaming class every weekday and access to recorded
workouts for $15 to $27 a month.
PHOTO: DAILY BURN, INC.
Cardlytics analyzes credit and debit transactions from more than 120 million U.S. bank accounts to track spending
patterns. Identifying information is removed before the data is analyzed.
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THE WALL STREET JOURNAL.
As any Jane Fonda fan will tell you, video workouts have existed for decades. Digital fitness subscriptions offer a larger
variety of ever-changing workouts for about $5 to $30 a month, and the services are growing in sophistication.
In 2015, Daily Burn started broadcasting a live class online at 9 a.m. ET on weekdays. Users with the basic $15 membership can access that class for 24 hours. They can call up another 200 recorded workouts any time. A $27 premium
membership lets users access more than 600 workouts, including an archive of the live classes.
Daily Burn began broadcasting its daily workout from the 24 Hour Fitness location in New York’s SoHo neighborhood
earlier this month. Members of the 422-location gym chain can get a premium Daily Burn membership for $5 monthly.
Beachbody, founded in 1998 with VHS workout tapes sold through
infomercials, launched Beachbody on Demand in 2015. The streaming-workout service has 800,000 members paying $100 annually, with
much of the growth coming from people uncomfortable with going to
a gym, says Carl Daikeler, Beachbody CEO and co-founder.
“We got rid of the commute, the gross locker room and the uncertainty of what to do at the gym,” Mr. Daikeler says. The company also
sells DVDs.
People who used this on-demand approach for the first time in 2016
spent 37% of their total fitness budget on these services, according to
Cardlytics. They spent nearly 40% of their workout budget at traditional gyms, and the rest on fitness boutiques, according to Cardlytics.
A year earlier, those on-demand fitness users had spent nearly 67% of
their exercise dollars on gyms.
The on-demand programs in Cardlytics’ analysis also includes
services like New York-based ClassPass. The company offers users a
set number of visits to participating fitness boutiques and gyms in a
given city for a monthly fee.
ClassPass is in 31 U.S. cities and another eight in Australia, Canada
and England. U.S. prices range from $25 for three classes a month in
Tampa, Fla., to $135 for 10 classes a month in New York, far less than
the $200 to $500 a month the boutiques often charge.
Beachbody on Demand, which launched in
2015, offers more than 500 streaming workouts
for $100 annually.
PHOTO: BEACHBODY
ClassPass officials say they’ve booked more than 30 million class reservations since the company’s June 2013 launch.
Eric Billimoria, a 34-year-old financial planner in Chicago, reflects the protean tastes of many physically active professionals. He was a ClassPass subscriber in 2015, and then quit it to join full-time one of the studios he found through
the service.
He recently quit that studio, bought a traditional gym membership to have a place to lift weights, and rejoined ClassPass. Once the gym membership expires—he got it through a Groupon—Mr. Billimoria plans not to renew it and stick
with ClassPass, he says.
“I do tax preparation also, so I don’t know how much time I’ll have January through April,” he says. “ClassPass gives
me that flexibility.”
ClassPass rose on the popularity of its unlimited-classes package. But it announced it was halting unlimited plans in
November because they were financially unsustainable, sparking user fury. Chief marketing officer Joanna Lord says
the new plans so far have been well-received. “We have been shocked at the level of commitment that our customers
have had,” she says.
As soon as February, ClassPass will expand a venture it recently began testing: fitness videos on demand.
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