Zoe Chew

August 13, 2022

Fitness Apps, Creators & Subscription Models

⭐️ Premium Post

Issue #20

Let’s talk about products that help you sweat, burn calories and become stronger. Nah, this is not a guide for losing weight.

We're going to talk about fitness tech, i.e. physical or digital products that make working out from anywhere possible. 

Startups are building for the future of exercise by (1) reinventing workout equipment, (2) bridging IRL and URL fitness, (3) creating immersive experiences, (4) niching down to serve new market segments, and (5) financialize exercising.

We’ll break down the top fitness market trends: what product categories are on the rise, how they differentiate, how they monetize, and what are the next big opportunities. Healthier, faster, stronger, let’s go:

1. Top 11 Fitness Market Trends

(1) Rise of fitness creator economy:

  • New players are capitalizing on the passion economy and building the Patreon for personal trainers. Digital platforms have emerged to help fitness coaches monetize workout classes and thrive as a creator business.
  • Playbook allows fitness influencers to build online communities, engage with fans, offer paid content, and launch a subscription business.
  • With arketa, wellness creators can sell in-person/online events, schedule 1:1, digital products, on-demand courses, and manage marketing & analytics in one place.
  • Talent Hack offers a suite of tools (website builder, video platform, subscription, automation), network, and partnership for fitness creators.

(2) Retail gyms are adopting a hybrid fitness model:

  • Franchise gyms are combining fitness studios (IRL fitness) and at-home workouts by tapping into virtual classes (URL fitness). 
  • Barry's Bootcamp offers Barry’s X, a $39.99/month subscription to access live workouts, on-demand videos, and social networks.
  • F45 offers F45 Challenge, a combination of on-demand workouts, meal challenges, and a goal tracking portal.
  • Jane DO is a women-focused workout studio + on-demand livestreams subscription, starting from $30/mo to $75/mo.
  • 9round offers 9RoundNOW, an on-demand kickboxing online session guided by instructors, starting from $19.99/month. 

(3) Peloton for “X” make all kinds of exercises possible at home:

  • Connected gym equipment is going beyond indoor cycling. Companies are making rowing, strength training, and running more connected, interactive, and smarter.
  • Tonal combines patented digital weight, workout content, and personalized coaching.
  • Tempo uses AI and 3D vision technology to provide real-time form correction and personalized workout plans.
  • Mirror offers an invisible full-length workout mirror to help you train at home. 
  • CityRow brings rowing machines and studios to your home.
  • FightCamp enables smart boxing and punching at your home.

(4) Fitness is becoming holistic:

  • Consumers want a fit body, a fit mind, and a fit brain. This demand shift has created a plethora of startups that design integrated solutions to help people train, rest, and relax.
  • Fitness for the mind is represented by Calm, Headspace, and Insight Timer, which offers content for mindfulness and sleep.
  • Fitness for the brain calls for a solution that helps people optimize sleep, recovery, and mental clarity. RISE tracks your sleep and predicts your energy throughout the day. Oura Ring is an activity + sleep tracker that optimizes your overall health.

(5) Bite-sized workout is entering the space:

  • Companies are creating new products to help people squeeze in fitness routines without thinking about it. Exercise is being reintroduced, i.e. from working out at the gym to low-impact daily movement.
  • Cubii is a bike that fits under your desk. This small but mighty device keeps you pedaling while you work and burns 150 calories/hour.
  • Activ5 is a portable and “squeezable” exercise device that enhances your strength, flexibility & endurance through isometric movements.
  • Gaiam Classic Balance Ball Chair is a convertible “yoga ball chair” that promotes ergonomic posture, aligns your spine, and strengthens your core.

(6) Audio-based workouts:

  • Workout apps are helping people to listen to workouts and become ‘screen-free”.
  • Aaptive gives you audio-based fitness classes led by certified personal trainers.
  • Ritual FIT offers audio-coaching content including cues, guidance, strategy, and motivation–starting from $10/month.
  • Auro offers motivational workout content designed by expert trainers.

(7) Financialization of fitness:

  • Web3 apps are paying you to exercise. New players are adopting the Move-to-earn (M2E) model that lets you earn cryptocurrency for walking, running, or even playing fitness games indoors. 
  • Stepn lets you buy an NFT sneaker, track running activity with GPS, and earn crypto when you move outdoor.
  • Fitcoin pays you crypto when you perform holistic healthy behaviors.
  • OliveX lets you earn DOSE token when you complete their workout games. DOSE tokens can be used to upgrade game modes and purchase NFTs.

(8) Gamification of fitness is exploding:

  • Fitness is being integrated into virtual reality (VR) headsets, video games, and entertainment. Companies are making fitness feels like gameplay and helping you burn calories. At-home fitness is shifting from the real world to the virtual world.
  • FitXR offers expert-led boxing, dancing, and HITT classes, starting from $9.99/month. 
  • Supernatural helps you escape to breathtaking locations to make workouts anywhere “off-world”.
  • HOLOFIT converts your rowing machine, bike, or elliptical into a VR experience.

(9) Wearable fitness tech is going to the next level:

  • Fitness trackers are going beyond activity tracking. Companies are developing biosensors that are embedded in everyday accessories such as rings, eyewear, footwear, clothing, etc.
  • ActiveLook smart glasses can track power meters, foot pods for running dynamics, and cadence to help cyclists perform better.
  • Wearable X’s smart yoga pants have built-in sensors that guide you through every yoga step.
  • Under Armour’s HOVR running shoes track running metrics and coach you in real-time to run better.

(10) Science-backed fitness is unlocking fitness performance:

  • New waves of biotech companies are targeting the fitness industry to help consumers understand the relationship between their genes and physical wellness. 
  • FitnessGenes offers a DNA testing kit to help you maximize your weight loss and workout results.
  • DNAfit analyzes your genetic profile and provides personalized recommendations on diet, exercise, sleep, and recovery.
  • Nutrigenomix’s Sports Nutrition and Performance Test focus on maximizing athletic performance.

(11) “Netflix for fitness” continues to spur new online fitness brands:

  • New fitness brands are connecting digital platforms, video content, device, and hardware to deliver a 360-degree workout experience. Live-streaming, on-demand workout classes, and interactive sessions are becoming lucrative subscription business models.
  • obé fitness offers a wide-ranged variety of exercises including cardio, HIIT, ride, dance, and yoga.
  • Glo, Pure Barre, and CorePower focus on yoga, meditation, and pilates movement.
  • Peloton and Tonal have integrated streaming workouts into their smart equipment.
  • Ballet Beautiful focuses on ballet-inspired workouts.

2. Market Players, Competitors & Databases

👉 Link to database

3. What problems do they solve?

(1) Fitness coaches aren’t getting paid enough:

  • In the U.S., the fitness training market is $13 billion per year. But personal trainers (PTs) only make $17 and $19/hour. Many PTs work as a contractor for the gym facilities, and only get paid for what’s left after splitting revenue with the facility owners. 
  • New software exists to help fitness trainers monetize their passions, build multiple income streams, sell digital products, and earn recurring revenue.
  • Talent Hack & Playbook helps fitness coaches bypass intermediaries (i.e. gyms) and monetize clients directly. The platform offers a suite of tools (website builder, video platform, subscription, automation), network, and partnership for fitness creators.

(2) Lack of time to exercise:

  • Losing weight and exercising ranked the Number 1 most common personal goal. More than 80% of people gave up their New Year's Resolutions by the second month.
  • New startups make exercising more approachable. They create “micro workouts” for those who don’t have the time, money, or energy to commit to a gym membership.
  • Apps like Seven, Sworkit, and Streaks offer mini-workout guides. It only takes 7 to 10min workouts each day to stay in shape.
  • Compact workout tools like TRX Suspension Trainer strap and Liteboxer Wall Mount turn your space into a gym. So you can access equipment from home without taking up a large space.

(3) Gym operators struggle to find and keep customers:

  • 81% of fitness studios fail within 12 months. New gyms often struggle to attract customers that no one has heard of. Failing to keep customers coming back is hurting revenue and sales.
  • Startups help gym owners find clientele by connecting gym-goers with studios near them. For example, FitReserve, Planet Fitness, Gympass
  • ClassPass built a billion-dollar company by aggregating fitness classes. In the early day, ClassPass studied the problems facing studio owners, i.e. they want to promote their destinations through free classes. ClassPass filled the gap between (1) owners who want more customers and (2) fitness enthusiasts who want to join classes but don’t know where to find them.

(4) Fitness intimidation and exclusion:

  • People who struggle with body image are more likely to experience gym anxiety. 15% of the world’s population has some form of physical disability.
  • Companies differentiate by solving the representation gaps. These brands focus on diversity, inclusivity, and solutions that cater to minorities and underrepresented people.
  • MissFits’s online classes empower overweight people to enjoy a workout.
  • Kate Stanforth built an online dance academy for people who’re living in a wheelchair.
  • The Ostomy Studio focuses on recovery exercises for people who have a stoma.

(5) Staying motivated is hard:

  • 50% of gym-goers leave behind their gym membership within 6 months. 14% of women and 8% of men quit going within a year
  • Social interaction is one of the most important factors that build lasting exercise habits. Companies solve this by using a “social fitness” approach. 
  • Strava builds a digital community around cycling and running enthusiasts. The app offers data (routes and maps), content creation (capture and share your ride), social network (follow, like, and comment on others’ posts), and accountability (leaderboard, ranking, and competition).
  • Camp Gladiator combines outdoor group fitness and on-demand workouts. Users can also be part of the communities and trainers for peer support.

4. Business models & monetization 

(1) Monetize through creators:

  • Many fitness creators' platforms monetize creators directly. Similar to the Substack and Patreon model, the fitness platform only makes money when the creator earns through the platform. 
  • Fitness instructors typically access the platform features for free (e.g. upload fitness content, grow subscribers, build followers) until they start generating subscription revenues from fans.
  • Playbook and Trybe take 20% of revenue cut from creators, and creators keep 80% of the earnings.
  • Talent Hack doesn’t monetize from creators. Instead, they charge a 3% to 10% processing fee from the customers for each online workout session conducted by the fitness trainers.

(2) Physical and digital product bundling:

  • Most common in connected at-home gym equipment that sells hardware and digital products such as monthly content subscriptions.
  • Peloton treadmill costs $2,495, and requires a membership that costs $44/month to access live/on-demand workout content streamed via the Peloton screen and iPhone.
  • OxeFit strength training machine costs $3,999+ with an additional accessory package; has an integrated membership that costs $39.99 to $49.99/month which gives you access to 250+ strength-training exercises.
  • Ergatta smart rowing machine costs $2,199, with a separate membership at $29/month, including a growing library of fitness games, dashboard, live tracking, and new workout content every week.

(3) E-commerce marketplace:

  • If you operate an e-commerce sports apparel marketplace, there are a few ways to generate revenues. By definition, a marketplace enables sellers, buyers, and third-party participants to exchange value and complete transactions on the platform. 
  • Flat commissions: GOAT, a global platform for buying/selling authentic sneakers charges sellers 30% commission fee for items sold below $350.
  • Tier-based commissions: StockX offers 5-level transaction fees starting from 10%. The more you sell, the lower your transaction fees will be. E.g. at 250 units sold/quarter, sellers only pay 8% to StockX.
  • Listing fees: Instead of taking commission fees, fitnessmarkt.com charges between €99.95 to €199.95 from sellers for listing gym products on the marketplace. In addition to listing revenues, the platform offers ad placement starting from €24.95, or €54.95 for 4 weeks / €54,95 for 3 days on the main page.

(4) Monetize from employers and organizations:

  • Most common in employee wellness platforms that help organizations provide fitness benefits, perks, and discounts for employees.
  • Gympass charges companies a flat fee of $150 per month and pricing varies depending on company size. Employees can enjoy a discounted rate to access any gym studios or digital wellness subscriptions that Gympass has partnered with.
  • Benepass offers company-funded wellness benefits and pre-tax benefits with one virtual card. The pricing is unclear, however, the platform adopts a SaaS business model to help employers manage HR benefits digitally.

5. What are the next big things?

(1) Fitness-as-education will emerge:

  • Universities are being unbundled successfully and startups have created new categories of “schools” on their own. General Assembly verticalized the engineering faculty. Masterclass unbundled lifelong learning. Duolingo specialized in language learning.
  • Currently, aspiring trainers are getting certified by authorities such as NASM, ACE, ISAA, and AFAA. As personal trainers are entering the job market every year, new startups will reinvent degree, certification & training for professional coaches through non-traditional mediums.
  • For example, (1) create a Masterclass for sports coaches, e.g. Masters App (2) Y Combinator for aspiring fitness founders, and (3) Maven for top fitness professionals to start their cohort-based fitness courses.

(2) Fitness apps have the potential to become food delivery companies:

  • Eating and exercising are interconnected. Apps like MyFitnessPal and MyPlate Calorie Counter connect fitness goals with calorie tracking, food diary, recipes, meal planning, and exercise videos. 
  • The food delivery market made $130 Billion in 2022. There are massive opportunities for startups to integrate grocery and food delivery directly into the fitness app. 
  • Hungryroot is a great example. It combines recipes with online grocery shopping. Whisk (acquired by Samsung NEXT) also made its way to exit with its connected recipe platform.
  • As consumers develop a holistic sense of fitness, weight loss apps can apply a similar concept that allows users to easily shop for meal kits or fresh ingredients based on their fitness-oriented needs.

(3) Ailment-related fitness remains an untapped opportunity:

  • Chronic disease affects 40% of the American population. The demand for chiropractor treatment pushes the market size to be valued at $19.5 Billion a year.
  • Therefore, alternative exercises and fitness routines are needed for people who experience multiple sclerosis, rheumatoid arthritis, and other mobility dysfunctions.
  • This will give rise to niche fitness platforms that focus on the physiotherapy, recovery, or reversal of chronic physical health conditions. There could be alternative fitness equipment, smart wearable trackers, or on-demand content (e.g. MS Workouts) being offered to this demographic.

(4) Virtual gyms will take it to the next level:

  • While the virtual kitchen model has been demonstrated successfully by Kitchen United and CloudKitchens, we have yet to see a similar model being applied in the fitness industry.
  • New providers could purchase multiple locations, add equipment, set up professional studios for live streaming, sell white-label fitness content, hire kitchen staff to cook fitness-focused meals, offer food delivery services, and integrate analytics and marketing tools.
  • As a result, gym owners can open a gym remotely, expand into multiple locations, and scale their fitness startups digitally. Providers can monetize through revenue sharing or take commissions from the gym owners.

(5) Full-stack fitness model will see more adoption:

  • Fitness, nutrition, and mindfulness are becoming an integral part of a healthy lifestyle. Therefore, solutions that provide beyond body movement will be well-positioned in the holistic wellness trend.
  • A full-stack fitness approach can be viewed through the lens of business models, end-to-end ecosystem creation, and hybrid products and services offering.
  • Potential use cases: (1) build an integrated fitness digital health platform that offers video consultation with performance coaches, nutritionists, physical therapists, and mental health experts; (2) embed health insurance offerings natively on the website as consumers shop for a gym membership or fitness equipment.

(6) New forms of creator economy in the fitness industry:

  • YouTube and TikTok have led to the rise of “fitness influencers” who monetize through brand partnerships. Playbook has led to the rise of “fitness creators” who turn their passion into an online fitness business.
  • The creator economy of fitness will continue to play out in new categories such as gaming, entertainment, and shopping.
  • Gaming: The rise of VR fitness like Supernatural will create more game developers who build fitness games in the virtual world. This could also lead to the rise of game-asset designers who create and sell virtual fitness assets.
  • Shopping: There could be a Supergreat equivalent of the fitness industry. With the abundance of fitness brands, equipment, and workout supplements, solutions that curate the best video reviews on these products could be built.

(7) Fitness sector will seek new ways to adopt Web3:

  • Web3 adoption is already happening in the fitness industry. Exercise to earn crypto is demonstrated by Fitcoin and Sweatcoin. Fitness-oriented blockchain games are being offered by Step App and OliveX.
  • The future of Web3 fitness is letting everyone own a piece of the fitness industry. This could manifest in the form of alternative investments, provider tools, and ecosystem enablers. 
  • Potential use cases: (1) an NFT marketplace like NBA Top Shot but for niche sports e.g. martial arts, drifting, dodgeball; (2) Republic but for investing in early-stage metaverse fitness projects; (3) blockchain-as-a-service to help fitness brands launch metaverse gym studios. (4) an online marketplace for shopping metaverse fitness apparel, e.g. sneakers, smart clothing, yoga pants, etc. 

(8) Microtransaction business model:

  • In video games, microtransaction occurs when you spend money to buy virtual game goods such as energy, lives, avatars, skins, unlock new destinations and game modes, etc.
  • As gaming is increasingly embedded in the fitness product offerings (Hints: metaverse exercise, VR workouts, and fitness-based games), microtransaction can be used as a revenue stream for fitness platforms.
  • For example, connected fitness brand like Peloton can introduce streaming-based transaction that allows users to purchase a pop-up session with celebrity trainers, on top of their existing subscription plan.