Peloton and Apple Health Plus depend on subscriptions to maintain prospects on New 12 months’s Resolutions
Fitness apps are taking a page from the Netflix manual in the New Year and building on their pandemic success to attract more people to exercise subscriptions that include access to recorded and live fitness classes, or instruction and personalized workouts. Like a number of industries that are heavily digitized, many companies, and even smaller studios and individual instructors, are finding that subscriptions are the key to survival and growth.
Data from mobile app analytics firm Sensor Tower shows consumers spent $ 167 million on the top five mobile fitness apps last year alone, up 40 percent year over year. And in May, 3.3 million people in the US downloaded one of the top five most popular fitness apps. That’s a 43 percent increase over the normally busy New Year’s resolution season in January.
In Kingsville, Ontario, Trish Allsop thought it was a choice between eating comfort foods and drinking wine to pass the time during the pandemic or to “get on the healthy train.” She opted for the latter and bought a peloton for $ 1,829 to start riding in the first week of January. The $ 39 subscription fee – plus the addictiveness of the classes – kept them going.
“It’s like a gym tariff that we pay and it motivates us to use it because we pay for it,” she said.
As devices and the Internet become more productive, and entire industries move to digital, it becomes increasingly clear that subscriptions are required to maintain profitability. Publishers, TV streaming apps, and grocery and restaurant delivery services are moving towards this model, which is maintaining a steady stream of income.
Netflix and Amazon Prime are two of the pioneers of the digital age model. Even iPhone maker Apple has shifted its priorities to “software and services” in the past two years, essentially recognizing that selling hardware alone is not enough to build a technological powerhouse and keep customers and their wallets busy.
(Jeff Bezos, CEO of Amazon, owns the Washington Post.)
“Some of this is just business logic,” said Julie Ask, principal analyst at Forrester Research. “Netflix and Amazon are proving that people who sign up don’t turn them off.”
In the fitness sector, people have been able to watch free training videos online for years. The market for home tutorials has grown denser over the past decade as smartphones became ubiquitous and health wearables, especially FitBits and Apple Watches, became fashionable.
During the pandemic, when other costs were cut and many gyms closed, analysts say consumers are more willing to spend money on exercise apps.
They can cost as little as $ 5 a month for a Strava bike app subscription or nearly $ 40 a month for Peloton’s membership, which is required for the on-demand courses. Monthly or yearly subscriptions to services like FitBit, WW (formerly Weight Watchers), or Peloton have steadily gained ground for years, but spending on similar home fitness apps has grown in popularity over the past year.
Apple is the latest big name to enter the fitness market with the launch of Apple Fitness + last month. The $ 10 monthly subscription service that combines workouts and personalized data with Apple Watch hardware is the latest service from Apple to join Apple TV Plus and Apple Music.
Like many of these fitness offerings, the subscription is only part of an interconnected range of products. Apple Watch Series 3 or higher, starting at $ 199, is required to subscribe. An iPhone 6s or higher is also required – or a larger screen.
Peloton sales rose last year, and the company announced last month that more than 1.3 million people currently both own the bike and subscribe to the $ 39 monthly service that gives them access to guided bike lessons and other workouts. It also makes money doing other things, from shoe and weight sets (starting at $ 150) to Peloton merchandise and clothing like custom Peloton earplugs for $ 119 or a scrunchie set for $ 20.
Peloton, which went public in 2019, recently extended its usual 30-day free trial period for its app to two months and saw the rush in January when the resolutions went into effect. Last year it offered a three-month trial. Strava jumped on board last year too, adding a paid subscription option with additional features to its previously free cycling app.
It’s one thing to get someone to sign up for an app that promises to be a successful fitness routine and quite another to get them to use it. Forresters Ask points out that getting paid subscriptions up for adoption is more difficult than getting a free service, for example. There are lots of free training videos on YouTube and Instagram – training queen Jane Fonda’s original classes are even online. But Ask also said that if they pay, people are more likely to stay longer.
In San Antonio in November, doctor Meghana Chalasani received a peloton bike with the intention of diving straight into it. Instead, she’d paid for the bike and its app for almost three months without continuing.
Her husband asked how long they should keep it before giving it up and giving it back. “And I kept saying, ‘I don’t know,’ she said. He said, ‘Let’s just keep it. We’ll probably use it at some point.’”
Chalasani, who has a baby and another on the way, noted that her subscription is less than what she would normally pay at a gym – but it’s only worth it when she starts using it.
The subscription trend also applies to independent fitness trainers who had to get creative when the coronavirus closed studios and gyms across the country. About a decade ago, during the recession, Christl Marcontell started a personal subscription service for her Kinesia Pilates studio in Seattle for recurring income. The model is common in fitness studios, but many specialty studios rely on prices per class.
Last year, when local regulations closed Kinesia’s doors, Marcontell and her teachers began teaching classes through Zoom. And their customers continued to pay for their monthly subscriptions for the same price.
“There’s no way we’d be there now if they hadn’t,” she said.