Fitness facility owners can cash in on the personalization of entertainment.
Entertainment at fitness facilities has moved so far beyond televisions mounted on the wall or from the ceiling that club owners providing only this option could be left behind sooner rather than later. Today's entertainment is all about personal choice for the member, and that personalization can offer extra revenue for the fitness facility.
It's an on-demand world. People want what they want, when they want it. That's why TIVO, on-demand movies, MP3 players with video and music downloads, streaming videos on the Internet and even individualized ring tones for cell phones are so popular.
It's no wonder that personal viewing screens, available for some time from various equipment manufacturers and as add ons by entertainment companies, are now becoming a must-have for many fitness facilities.
“Our members like to have control over their own viewing experience,” says David von Storch, owner of VIDA Fitness, a 29,000-square-foot fitness spa that recently opened in Washington, DC's Verizon Center, an entertainment and sports facility. “So even though big screen TVs look great, [members] like to have their own personal viewing screens, so they can view their own program at their volume.”
Crunch Fitness offers a choice to members of either viewing entertainment on their own personal screens or watching a larger plasma television.
“Some members like individual screens, and others don't care for that,” says Keith Worts, senior vice president of operations at Crunch Fitness, New York.
Brian Wilson, the director of marketing for entertainment and services division at a fitness equipment manufacturer, says, “If I'm a club and I don't have personal viewing screens and someone down the road has them, I'm in trouble if I don't buy them. I think you are starting to see that happen more and more across the country.”
Even at smaller club companies, such as Form & Fitness with a location in Mequon, WI, and another in Grafton, WI, personal choice is a must. The clubs offer large-screen TVs on the walls, but all cardio equipment has personal viewing screens with a full cable option, says Gretchen Quist, owner.
“TV nowadays is considered a guilty pleasure for people's busy lifestyles,” Quist says. “If…we can help [members] take care of that guilty pleasure while they exercise, they feel good about exercising and taking part in their guilty pleasure.”
Earning Extra Cash
One thing some manufacturers hope fitness facility owners won't have any guilt about is earning some additional revenue from their members' pursuit of entertainment during exercise. As entertainment options expand to allow for on-demand video viewing, Internet accessibility and streaming video, revenue options have opened to club owners.
With video streaming, an entertainment company provides the content for the streaming video and can leave time for the club to insert its own content. Another option is for the club to create the video and then sell time within it to local businesses, says Troy Severson, marketing manager at a technology company whose technology is installed in many lines of fitness equipment.
For several years some club owners have earned revenue by offering advertising on a branded video network offered by an entertainment company. Wilson's company is introducing a product that allows a club to have a branded home page on personal viewing screens. Club owners can define the content that they want to deliver to their members. Choices can range from network and cable TV stations to content that is created specifically for that club. For example, the club could provide a trainer channel in which users could meet all the club's trainers or a day care channel where users could watch their children in the facility's child care area.
Another entertainment company offers clubs Internet-based banner ad revenue.
However, earning additional revenue in this way isn't necessarily appealing to all club owners.
“I think there's a fine line with that one,” says Worts, who contends that the popularity of filters to get rid of pop-up ads demonstrates that people don't want to be inundated with advertisements. “If it's tastefully done, it can happen. We want to protect our brand. If we decide to go that route, it will be a careful decision.”
One entertainment company offers club owners additional revenue opportunities through the sale of a cheaper version of an MP3 player that members can use exclusively at the club, says Guy Danhoff, the director of entertainment operations at the entertainment company. Club owners earn part of the revenue from the sale of the MP3 player, and they can brand the product with their own name, providing advertisement for the club. Through this company, clubs also can sell monthly subscriptions to customized podcasts that can be downloaded at a kiosk at the fitness facilities. Members can subscribe to a specific genre of music and download a podcast within that genre. The music is ordered so that the beats per minute match the user's workout.
However, not every club owner is convinced this new technology is necessary. Even though it's technologically exciting to download videos or music at a fitness facility, von Storch doesn't believe most members will do it and, therefore, he has no desire to pay for the technology.
“What is good about personal viewing screens is that you push one button and put on your headphones and you are ready,” von Storch says. That's especially important for the uninitiated member, which is where membership growth resides. “The technology will appeal over time to the people who are bringing their own iPods and are into fitness. It has more appeal to those people than to people who are just trying to figure out where the locker room is.”
In addition, club members are time pressed and taking time to download a movie or music while at the gym isn't how members want to spend their time, says Peter Taunton, founder of Snap Fitness, a fitness franchise company in Minneapolis, MN.
“Our members want to get in and out,” Taunton says. “Those who have an iPod have preloaded them [before coming to the gym].”
Quist echoes the time-pressed theme. Members don't want to put a lot of effort into their pre-workout routine, she says, noting that 80 percent of members get on a machine and hit the quick start button rather than using the options that require plugging in more information.
Members aren't asking for high-tech solutions, von Storch says. Instead, they are asking for creative programs that allow them to break up their routines and interact with people to achieve their fitness goals.
Worts says, “Whenever you are going to invest in something, you have to see the cost-benefit value. Will it add to the member experience?”
One option that Worts says will add to a member's experience is on-demand movies and TV shows.
“If they missed last night's episode of “The Sopranos,” they can watch it [when they come into the club],” Worts says.
Adding more entertainment options to equipment doesn't make much sense to Kim B. Blair, founding director of the Center for Sports Innovation at the Massachusetts Institute of Technology in Cambridge, MA. That's because people already bring their own personal entertainment devices to the club. Integrating entertainment into equipment simply increases equipment prices, he says.
However, Severson says that integrating these devices into the equipment improves the experience for the member. Watching a movie on a MP3 player is best when users hold it in their hands. For use on fitness equipment, a larger viewing screen positioned properly is a better option, he says.
Integrating this technology into the equipment also increases the infrastructure and backbone a club needs to serve all the technology — which requires a lot of bandwidth, particularly during prime time at a fitness facility, Blair says.
“If you are going to add value to the equipment, it should do what equipment was meant to do — get people fit,” Blair says.
The entertainment options, Blair says, are being pushed upon users by manufacturers and technology companies.
“A lot of times the technology people don't understand what will motivate people and make them use it,” says Blair, who not only is a triathlete but who also is an advisor for a company that provides users with the ability to track their workouts and offers suggestions on changing their workouts.
That's why Blair contends that more studies need to be done to find out what motivates people to work out. He theorizes that entertainment might initially get members through the doors, but to keep them there, clubs must provide data that helps exercisers track their progress and offers feedback.
“My view is that what people want is useful information,” says Blair, noting that the Nike+, a partnership between Nike and Apple that uses a foot pad wirelessly connected to an Apple Nano iPod via a running shoe, caught on because it provides useful information, allows users to compare themselves to others and tracks their progress. Other companies also provide products that track an exerciser's workouts and offer feedback.
What members truly want may depend on the type of individual they are. More athletic types may want the data tracking option while new exercisers may want to zone out on entertainment options.
Whatever their motivation, members will soon see a change in their entertainment at clubs as some manufacturers work with MP3 and entertainment companies and on demand video companies to integrate a variety of new technologies into the current cardio equipment in clubs. That will come quickly with beta testing in 2007, says Gregory Florez, CEO of FitAdvisor Health Coaching Services and First Fitness Inc.
Once this happens, Florez predicts it will turn the industry upside down because clubs will begin investing in these systems rather than in the large entertainment systems they now buy for thousands of dollars. Instead, they will buy subscriptions that can connect the member at home or in the club and will respond to customers' needs and their goals and barriers.
That will not only personalize the experience for members, but it will also provide savings and an opportunity for additional revenue for club owners.
Editor's Note: Our magazine's policy is not to name in our stories manufacturers who could be potential advertisers since doing so could imply an endorsement by the magazine. However, because this article would have been incomplete without comments from some manufacturers and technology companies, we've included individuals' names without noting their companies' names. If you want additional information from any of the individuals mentioned in this special report, e-mail Pam at email@example.com.
Bringing up the Tail End
Are fitness equipment manufacturers hurrying to catch up with the technology already being used by exercisers? Yes, says Gregory Florez, CEO of FitAdvisor Health Coaching Services and First Fitness Inc. End users are buying MP3 players and bringing them into their clubs because that technology is not available there.
“Manufacturers are saying that they can't be left out of this,” he says.
Guy Danhoff, director of entertainment operations at an entertainment company, agrees that many equipment manufacturers are “behind the eight ball” with their focus too much on integrating personal viewing screens into their equipment. In the meantime, entertainment companies are moving ahead with broadening the options available on personal viewing screens, he says.
“Manufacturers reacted too slowly [to new technology],” Danhoff says. “Personal viewing screens…are a very popular piece to put in a facility, but what is changing is the options that you put in it. You can't have just a straight video feed because there are other companies out there offering MP3, streaming music videos, podcasting…It's not enough to just have personal viewing screens on your equipment.”
Troy Severson, marketing manager of a technology company, doesn't necessarily think manufacturers and entertainment companies are too far behind in the technology that they offer. The ability to do video on demand has been around for several years, but the technology hasn't been at the right maturity level as far as ease of putting it in place and cost for manufacturers to adapt it to fitness equipment, he says.
Most manufacturers don't have the money or sophistication to develop the technology on their own, so they must partner with technology companies, Florez says. However, fitness equipment manufacturers eventually will need to have this technology competency on their own, Severson says.
“They will need to understand information technology and how it impacts their products and product development,” he says.
Brian Wilson, director of marketing for an equipment manufacturer's entertainment and services division, cautions against thinking that partnerships between equipment manufacturers and technology companies offer the complete answer to playing catch-up.
“The fitness industry is a unique industry,” Wilson says. “You really have to understand that environment. So even though someone can go out and buy expertise in the technology, unless those technology people have experience providing technology in the health club environment, it is very likely that the technology won't hold up. There is tremendous value in experience in this industry.”
The Problem with PVS
While the popularity of personal viewing screens (PVS) is increasing, their use isn't without problems. If not positioned properly, the screens can cause users to exercise in a biomechanically incorrect manner that causes strain on users' necks, says Brian Wilson who works for an equipment manufacturer.
The second issue is that screens that are integrated into the equipment traditionally haven't held up well in the fitness environment. Because they are integrated into the equipment, the failure of a personal viewing screen can cause the entire piece of equipment to shut down.