THE WEEKLY HOWL IS A POD PERSON

Pod People: So there is a startup in China that is providing pod gyms (basically treadmill kiosks) on busy urban streets. Consumers book and pay for sessions with their smartphones. The going rate is approximately 3 cents a minute. Will this disrupt the gym business? Probably not. The main attraction is the treadmill but you know what’s even cheaper than a pod gym? Running outside. This model might work in China if the pollution levels in major metro areas like Beijing doesn’t decrease but it’s hard to see this taking off elsewhere. Traditional gyms have a tremendous advantage in that they are subscription businesses. They make money whether people show up or not. A pod gym needs to be booked in order to make money and it can only handle one person at a time.

And 3 cents a minute seems way too cheap. That’s $6 an hour which means that if it was occupied the entire day, it would only generate $144 in revenue. That comes out to just over $1000 a week. I realize that there isn’t much overhead but still. I’m not saying that you couldn’t build a strong business here by having 100+ pod-gyms. But I don’t think that this will disrupt the fitness industry because people go to the gym for more than a treadmill. I would be much more bullish on this if the price point was a little higher.   

Marketing Machine: The CEO of Planet Fitness went on Mad Money to talk about the hot streak that his company is enjoying. Earnings are up and so is the stock price. Memberships have increased to 10 million, from 7 million 2 years ago. And to what does he credit Planet Fitness’ success? Marketing.

"If you think about our business model and our marketing, it's a marketing machine," Rondeau told "Mad Money" host Jim Cramer on Thursday. "So every incremental member that joins, 9 percent of that dues goes to marketing, fueling the next join."

                Planet Fitness might be the smartest company in the fitness industry, which is depressing. They know exactly who their customers are and they tailor their marketing in order to go after them.

Rondeau called the overall style of Planet Fitness "conducive to the first-timer or casual gym user," a possible explanation for the chain's pull with millennials, who account for 49 percent of its membership.

                What Planet Fitness is really after is the person who will join a gym but never go. So they constructed a marketing strategy (No Judgement Zone, We’re Not a Gym) to target that person. Then they designed the gym to be less intimidating to that person (Lug Alarm, no free weights). Then they stripped out all the amenities that actual gym-goers might care about and lowered the price to the point where they hope that people won’t notice it on their credit-card bill.

                Planet Fitness is a smart company, no doubt about it. But they are not adding value to people’s lives. They have figured out how to take advantage of people’s apathy.

I’m a big pop-in guy: I came across an article on POPin, a new app that lets users purchase day passes to upscale gyms. For the life of me, I cannot understand why gyms do not make it easier to purchase short-term memberships. They either charge way too much ($25 for a day pass? Really?) or make you go through the whole sales process when you’re an out-of-towner. A middle market, big-box gym in not NYC/SF should charge $25 for a one-week pass. What are they afraid of? That people will just buy week-to-week memberships. Let them. That would be $100 a month. Don’t overthink it, just take the money. What you would really get anyway is people that are traveling and need someplace to work out. Or people that want to check out your gym before getting the hard sell.

                But instead, we are starting to see apps that are seeking to ease this pain point by functioning as the middleman between consumers and gyms. I am all for a service that will make it easier for me to find someplace to work out next time I am traveling but I do not understand why these services need to exist at all.  

                With POPin, you pay for the time that use. So that means that you have to check in and then check out as well. But your visit is free, so feel free to go nuts. The author did. She spend 3 hours at the Mercedes Club in NYC, which would have cost her $46.80.

Aging like a Fine Wine: The Hollywood Reporter published a piece on the challenge of preparing middle-aged actors for action-hero roles. As the big movie franchises get bigger and bigger, it is unreal how much is riding on the physiques of men in their 40’s and 50’s. Did you realize that Vin Diesel is 50 years old? He’s been playing Dom Toretto for 16 years now and I doubt that Universal Studios wants him to stop doing so anytime soon. The Fast and Furious franchise is worth billions of dollars. That is a lot of pressure on Vin Diesel to look like an action-hero. Maybe there should there be an Academy Award for Best Fitness Trainer.

                If you want a deeper dive into action-hero fitness, I highly recommend “Building a Bigger Action Hero”, a 2014 piece from Men’s Journal. It gets into the pressure on actors to transform their bodies for a role, how Fight Club changed Hollywood’s ideal male body, the use of PED’s, peaking for that big shirtless scene, telling George Clooney that he’s gotten fat, why stuntmen are a bad influence, Gym Jones, and the rise of the celebrity trainer.

 Boxing Gyms: Floyd Mayweather is getting into the gym business. The plan for Mayweather Boxing & Fitness is to sell franchises as well as branded programming:

The franchise model calls for the company to collect an upfront fee on each gym, along with a percentage of annual revenue (Williams wouldn’t disclose financial terms for the franchises). Affiliates will be non-Mayweather branded gyms or studios that offer select programming at more affordable pricing. A Mayweather gym in an affluent area might cost as much as $140 per month but could go as low as $40/month in areas with lower incomes.

                My knee jerk reaction to this is that the affiliate side of this business will do better than the franchises. Mayweather may be “one of the fittest athletes on the planet” but how often do you hear someone say that they want to look like him? Building a gym chain around one athlete is tougher than people think. This would have been an easier sell 10 years because every Mayweather fight would have been free publicity. How much will people care when Mayweather is truly retired? There are not many athletes who have remained in the public consciousness after they are done competing. And boxing is not a thriving sport. The fight that lured Floyd Mayweather out of retirement is with a guy who has never boxed professionally. That tells you a lot. Last but not least, there is Mayweather’s history of domestic violence. That hasn’t seem to hurt his boxing career in any appreciable way but you never know when people will wake up and decide that they want nothing to do with him.

Carrying a group exercise concept is a much easier lift and combat-based classes never seem to go out of style. The risk of being associated with Mayweather is much smaller as an affiliate than it would be as a franchise. MB&F is hinting that they have the secret sauce that made Mayweather one of the best boxer of his generation. If true, that could differentiate them from the competition.

TidBits:

-Nike Metcon vs. Reebok Nano

-Apple is getting into the corporate wellness game

-BeachBody is launching a new program based on MMA

-I need one of these