While bigger headlines are grabbed for the likes of NBCUniversal’s digital comedy channel Seeso, or Nickelodeon’s proposed service for kids, Noggin, there's also a burgeoning trend of SVOD services in the fitness arena, with cardio, yoga, weight, Zumba and other classes.
One niche company, Peloton, provides stationary bike spinning classes for Internet users in their homes.
Just like Netflix, Hulu or CBS All Access, many of these SVOD networks have monthly fees. Peloton charges a relatively high one, $39 for a month of live (12 daily) and thousands of on-demand classes.
That’s not all. The two-year-old company now sells a Peloton bike for $1,995, complete with a large interactive screen to participate in those live spinning classes.
Sounds ambitious to many. Yet Peloton says it has 150,000 total customers worldwide, and has sold 25,000 bikes -- which, it says, translates in-home to 50,000 riders.
John Foley, founder/CEO of Peloton, says this service make sense for those consumers who can afford to pay $30 to $35 or more for each class and typically take several studio spinning classes a month.
Each Peloton class is filmed in a 60-bike studio. “We wanted it to be authentic, versus other people that create fitness content with a faux studio,” says Foley.
Also consumers get plenty of interactivity -- especially with the bike, which can monitor heart rate and "wattage," a current valuable metric for pro cycling and other athletes.
Cyclists can also see how other spinners are performing in a class -- or online. Foley says: “You get to have an immersive experience.”
Peloton consumers are mostly upper-income suburban couples, 40 to 60 years old, with kids, who don’t always have the time to go to a spinning studio.
To market to this crowd, Foley says the company has a media budget of some $10 million a year, mostly on national cable networks, including NBCU business network and CNBC.
“We plan on spending three or four times that,” says Foley. Overall, Peloton’s business is growing five times year-on-year, he says.
The company is also spending on digital, out of home, and print ads, including publications like Wired, Vanity Fair and Architectural Digest. Initial marketing efforts came from Kickstarter, social media, and word of mouth.
For those who don’t want to plunk down two thousand dollars on a spinning bike, Peloton also offers, through iTunes, an app-only option for those who have their own at-home bike. The app has been downloaded 40,000 times. Unlimited bike classes through this app cost $5.99 weekly and $12.99 monthly.
Peloton isn’t alone in the live fitness arena. Crunch Live offers a full schedule of live fitness classes for $9.99 a month/$90 a year; Live Streaming Fitness also has live classes -- yoga, strength, cardio, 12 hours a day -- $9.90 a month or $99 for a yearly membership. Another big fitness site, Daily Burn, an IAC company, also offers on-demand and live workouts and is promoted through TV commercials.
For many this is a harbinger of virtual reality networks perhaps replacing real venues for any number of leisure recreational activities.
Lorna Borenstein, founder/chief executive officer of digital video fitness service, Grokker, says she is emboldened when observing reports -- like one on CNN Money -- talking up the rise of the “digital gym” and the slow death of the traditional health club.
Borenstein began Grokker while traveling as a busy executive and finding it difficult to access nearby health clubs quickly. She says the number-one thing consumers want from digital fitness video networks is “saving time.” “The second thing they want is to be untethered -- to have classes on their tablet, and definitely on their TV,” she says.
Borenstein says Grokker targets women 25-54. “They want it personal and non-competitive, and don’t want to feel like it’s walking into a CrossFit class." (CrossFit is an intensely competitive workout.)
The three-year-old Grokker, available through many platform and devices, including Apple TV and Roku, offers thousands of fitness videos; the price tag is $9.99 a month.
Recently Comcast’s Xfinity TV announced a deal to start up a spinoff of Grokker: Grokker Yoga Fitness, where consumers can access hundred of classes for $6.99 a month. Comcast is marketing Grokker with linear TV commercials, as well as promoting it via its on-demand programming guide.
Borenstein says, as other digital video fitness services entrepreneurs claim, that her service can be cost-effective versus $50 a month fees for an actual gym memberships -- or $20 to $30 for a single yoga class.
While digital fitness is growing, Borenstein say this doesn’t mean Grokker is going to totally leave the traditional gym behind. “We look forward to partnering with gyms and studios,” she says.
Critics says digital fitness lacks the personal attention an instructor or trainer can offer. But proponents say with social media and real-time interaction, the real-gym obstacle can be solved. Borenstein says: "It is not just through a one-way content stream. It’s really about connecting and supporting you." She notes the world "grokker" comes from the Robert Heinlein sci-fi novel “Stranger in a Strange Land," and means to “soak in knowledge through connection.”
Future digital video services will need to focus more on this interactivity. Borenstein says successful OTT operations will be those that “can create engagement and community; they are going to monetize the best.”