TECH AND THE HEALTH CLUB
THE STREAMING WARS
February 15, 2020
Streaming technology has arrived in the Fitness and At-Home Workout market. So How do Health Clubs adapt to this new reality?
By Jean-Michel Fournier
One of the newest trends in fitness involves the delivery of streaming group exercise content to consumers wherever they are —call it the Disney+/Apple TV/Netflix streaming war effect. While the on-demand, at-home workout trend is not revolutionary (lest we forget bike shorts, over-the-pant thongs and leg lifts à la Jane Fonda), 2019 saw an explosion of new and repackaged entrants in the at-home fitness space. (Equinox, LifeFitness, Echelon, MYXfitness, iFit via NordicTrack, Tonal, Mirror, Openfit via Beachbody co-founder John Congdon, to name a few). All of these companies took aim to penetrate the growing $94 billion global fitness industry.
According to 2019 research done by L.E.K. Insights, digital fitness content market growth in the U.S. alone translates to 14 million new subscribers and a $3.3 billion market opportunity in 2020. Writing about the recent CES 2020 technology conference, Natt Garun of The Verge says, “Fitness is now as trendy as owning the latest iPhone.”
Therefore, it is natural to assume the focus of attention centers on the two largest generations of fitness users, Millennials and Gen Zs, which now make up 80 percent of the fitness market. These “anywhere and everywhere” generations are carnivorous consumers of 24/7 digital streaming content, including exercise content. As true digital natives, this generation of consumers has grown up with the Internet in its pocket, technology seamlessly integrated in their daily lives, and has evolving needs for their fitness experiences. Research also shows that 85 percent of club members also exercise outside of clubs.
Despite this demand from new fitness business growth and consumers, streaming and downloadable fitness content has been adopted by a marginal percentage of global fitness operators. According to the Club Intel 2019 International Fitness Industry Trend Report evaluating club operators globally who have embraced this newest form of fitness delivery via digital technology, European club operators are the clear leaders with an adoption level of 14 percent. The adoption levels in other regions of the world range from four-to-seven percent. Mobile apps, which are used by over 80 percent of people to connect with businesses, have only been adopted by 20 percent of the fitness industry. It is clear that there is a lot of untapped upside for club operators in the digital technology at-home fitness space.
As I touched upon in my FIBO Focus January 15 article, “Tech & The Health Club – Bridging The Gap,” one of our big goals is to offer our health club partners and their members a 360-degree fitness solution that seamlessly blends the physical and the digital, or what we call the “consumerization of clubs.”
Expanding the four walls of the traditional fitness facility and enabling members to exercise where and when they want is a critical requirement we felt we needed to address, especially for our health club partners. Clubs are the heartbeat of our industry and it’s vital that they stay at the center of the fitness journey. As more and more consumers extend this journey to include digital, we’ve implemented ways to retain the clubs as a part of the digital fitness experience.
One solution was establishing our partnership with Netpulse in 2019. With Netpulse, we enable clubs to own their members’ fitness journey wherever and whenever they want to workout. Clubs are able to offer a co-branded Les Mills On Demand subscription to their members at a preferred member rate, helping to boost member loyalty and keeping them in the habit of exercising even when they can’t make it to the gym.
Our video streaming platform Les Mills On Demand offers a solution to the challenges of the evolving digital fitness world, allowing users to stream the most popular Les Mills programs anywhere, from any digital device.
We have also consistently registered a 96 percent satisfaction rate among consumers who use LMOD. We attribute our growth and high satisfaction in Les Mills On Demand to several factors:
- Les Mills 50-plus year history of being a leader in fitness globally. Experience and branding matter.
- Les Mills was one of the first fitness companies to bring this technology to the market.
- Our ability to offer consumers access to more than 800 Les Mills workouts complemented by the hottest music tracks in fitness. Many workouts are evolutionary in nature and one-of-a-kind when released.
- Fifteen new workouts released a month. Workouts range from 15 to 55 minutes in length.
- Very engaged and supportive Les Mills global fitness online community.
- Superior technical quality and support, which includes timely response to any user inquiries via email or social media. The Les Mills On Demand App is accessible to all TV, laptop, mobile and tablet devices and is iOS, Android, Chromecast and Airplay compatible.
- Very little upfront expense tied to equipment.
- Low cost of the service.
- Existing and expanding partnership with fitness clubs globally where clubs are able to offer a co-branded service.
Bridging the Gap
Bridging the gap between the digital and physical worlds of fitness clubs continues to present a tremendous opportunity for continued growth. We also recently embarked on a release of lesmillscoaching.com. We feel this is a space ripe for technological evolution in fitness. Fitness coaching and Artificial Intelligence (AI) could be a big disruptor in the future.
We remain very optimistic and confident digital technology and SVOD will have a huge impact on the future of fitness as technology emerges and matures. As fitness moves from a strict brick-and-mortar experience to integrating a digital one, the operators who pursue these technology platforms more assertively will be the ones who remain relevant in the fitness industry.
About the author
Jean-Michel Fournier is currently the CEO of Les Mills Media, a division of Les Mills International, a global fitness company based in New Zealand with offices around the world. As head of media at Les Mills, Jean-Michel oversees their worldwide consumer business, the entire B2B and direct-to-consumer digital portfolio of products (including Les Mills On Demand), as well as their worldwide music management portfolio. Jean-Michel is a seasoned entrepreneur in Silicon Valley, advisor to the French government for economic development and a graduate of Harvard Business School. He is currently domiciled in Silicon Valley and spends a consistent amount of time in New Zealand and Europe tied to his role for Les Mills Media and current advisory roles. He can be reached at firstname.lastname@example.org