As Covid-19 is keeping people home and gyms and studios temporarily closed, loads of live-streamed and video on demand (VOD) fitness offerings are popping up all over social media via various platforms. The amount of hourly notifications I’m betting that there’s “LIVE” boxing or boot camp class about to begin (from multiple clubs and studios that I follow) is starting to get a bit overwhelming. There is so much out there on the “airwaves” I’m not sure who to watch or which class to take. My inbox is also full of video quick clips and tips about what I should be eating or supplements I should consider to help ward off the Coronavirus. With the vast amount of fitness classes and wellness education being bombarded at me, I’ve never felt fitter or healthier – who knew there would be a silver lining to a global pandemic and #socialdistancing.

The fitness industry eats up and spits out music at recording breaking speeds. Its rhythm welcomes members who they first walk in, and then its loud, heart-pumping beats motivate a packed class. It’s literally the heartbeat of our trade. But music doesn’t come without a price.

Let’s start at the beginning. Music licensing was created to pay songwriters and publishers for the usage of their copyrighted music. When you buy private licensed music on Spotify or iTunes, it gives you permission to play that music for personal use only.

In order to play music for commercial use, in your fitness club or a public arena where people are paying to participate in events or group fitness classes, you must purchase a public performance license for video on demand. If businesses are charging a fee and benefiting from the use of copyrighted music, they must pay a performance royalty to the composer, songwriter or lyricist.

How do these music creators get paid? That’s where Performance Rights Organizations (PROs) enter the picture. PROs like ASCAPBMI, SESACGMR, and SOCAN (in Canada) collect the performance royalties and pay their affiliated songwriters and publishers. It’s important for fitness brands to become licensed to play music and comply with the law to ensure these creators are fairly compensated. They help enhance the experience and will continue to create if supported.

If gyms and studios are not doing direct licensing deals with labels or working with the “PROs” and companies like feed.fm, they will need to find a way to stay in compliance with the rules and regulations of the music industry for BOTH in-club and online music.

Due to our #newreality, the focus is now on virtual fitness. What types of music can we use for online consumption? The answer is Royalty Free Music. What is Royalty-Free Music? According to Premium Beat by Shutterstock, “In a nutshell, Royalty Free Music refers to a type of music licensing that allows the purchaser to pay for the music license only once and to use the music for as long as desired”. Although it’s free of royalties, you will most likely still have to pay for it. You will only need to pay once and then can use it as many times as you want. This is the easiest route to go as the legal work to acquire and use copyrighted music is cumbersome and expensive. Music companies like Dynamix Music have “paid for the right to obtain a master-recording, and duplicate that recording for public sale”. You as a fitness company or professional, can simply purchase these recordings and legally use for your virtual or live-streamed classes.

Another option is a Rights Managed model or “per usage”. This model is based on how many times the song is used. According to tech101 “Rights managed music is a requirement that a license should be obtained both for the sound recording and composition of music. Right managed music will earn royalties in the event it’s used in a revenue-generating entity such as the broadcasting sector or a YouTube program. The fee, length of use, in this case, is negotiable.” The pricing will be affected by how and how much the track is used. Royalties are paid for each use.

Another type of license to be aware of is a Synchronization License or a Sync License. This is a license offered by the owner or composer of a song. A licensee or buyer can purchase the right to use this music for video or other uses. The rights to this music in most cases belong to the publishing house that represents the artist. The copyright, in this case, is split between the record label and the composer or songwriter. This is typically presented as a fee for one-time use. The benefit of this license is usually for up and coming artists who can use this for a major revenue stream and allow their work to be exposed to new audiences to help build their brand.

You may have heard about sync licensing after Peloton was exposed to the sync licensing gap because they push out so much weekly content with new classes combined with the latest music. Their turn-a-round was so fast, it was cumbersome for them to pay the rights for each individual song (as required) and they got flagged. Innovation is exciting and often catapults above current expectations, so the red tape and time it takes to comply with the tricky music laws and restrictions can set back this quick pace. Looks like Peloton and others are starting to work with artists and musicians to come up with a collaborative relationship and unique agreement outside of the constraints of music copyright law. We’ll keep our eye on this!

To keep this simple and easier for you to digest, I’ve listed a few “Royalty-Free” Music Companies you can purchase music from to use for your live-streamed and video on demand (VOD)classes right now. Browse their collections and genres and double-check their licensing options so you are in full compliance and know what you’re paying for and rules of use.

Now that you have the quick 101 of music licensing, you can now pick your top tracks and virtually motivate through moves and music – legally! Don’t forget about the rules and regulations for playing music inside of your club and studio as well. Once we are all re-opened and doing BOTH “Virtual” and “LIVE” offerings, double-check with the PROs to ensure you’re complying with the music copyright laws for in-club usage as well.

Stay safe and keep virtually interacting with your members during this trying time. Your members and clients need you now more than ever. We are lucky to be in a technology-driven eco-system where we can immediately trigger a digital reach and keep inspiring our fanbase through movement from the safety of our homes to theirs.

Be Well,

Ann Marie

ENDOROPHINZ is building the fitness services company of tomorrow, to empower brands and fitness creators in the digital age and provide video on demand services .Endorphinz is the first full-service fitness streaming agency offering fully integrated services from media production, publishing, merchandising, marketing, and more.  To learn more about Fitness streaming you can begin by checking out our latest article – 7 STEPS To Developing and Launching a Viable Fitness Streaming SOLUTION. Follow us on LinkedIn & FB to discoverEndorphinz – 

Are you racing to deliver a fitness streaming solution to your members in an effort to service your customers at home? Then you’ve probably already experienced the daunting task of figuring out what platforms exist, which one fits your need and how much does this all cost. We have been through one of the deepest dives across all VOD and streaming platforms that serve close to 80% of the fitness brands and instructors. There are a lot of options but no one group delivers everything you may think you want in the long run, so you have some decisions to make.

For these decisions it is imperative that you have a plan in place, or you will be doing like many others do and end up switching platforms down the road to solve the problems you didn’t think about. This is why we are recommending that everybody take a quick break, think about this like a product, set some goals, layout a vision for this need in the short term and long term as this will speed up the procurement process and ultimately save you time and money.

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Steps For Commercial Fitness Streaming Solution

An important distinction for this article is to treat this like a product or brand extension so that means the platform would need to be branded with your logo unless you want to send your customer to other fitness brands. Long before COVID-19 the adoption of an omni-channel strategy was underway in the fitness industry and those who adopt this model will be successful over the long-term. For more information on planning you can read our article on the 7 steps to developing and launching a viable fitness streaming solution as a guiding road-map.

Now assuming you know what your plan is, and you have allocated your resources. You are going to have 3 different categories of platforms to evaluate when it comes to solutions you can brand.

  1. End-to-End Solutions that can be white labeled with your brand
  2. Platforms with API’s that you can build a custom front-end solution
  3. Other streaming products packaged within a vendors branded products

We did not include social media, consumer video platforms or other peer to peer solutions because in a lot of cases they should be treated like top of funnel and then some of these solutions are hacks which is great for now but once you turn to developing a monetizable solution you can scale with varying types of content and business models it will become limiting to your growth. So we believe customers need to look at commercial applications.

As a part of this and since a lot of people are new to the fitness streaming opportunity we put together the top 7 questions to think about;

  1. What type of content do you want to serve to your customers – Video on demand, live streaming, audio content, learning programs, etc…
  2. What type of business model do you want to serve members and non-members with – subscription, transaction, advertising or a hybrid…
  3. What screens do you want your content accessible through – your mobile app, the browser, on the TV through OTT apps, etc…
  4. Do you want to integrate the fitness streaming solution with your other software systems like your CRM, Club Management, Etc…
  5. Do you plan to create your own content and need to manage that or do you need to find an existing catalog with content to license for use…
  6. How fast do you need to have a solution live in the market. Do you need something in a matter of days or can you wait for 4-8 weeks.
  7. Do you want a seamless solution between your brick and mortar business and the fitness streaming solution or are you okay with two apps, etc…

There are many more questions to ask but this should give you something to start with and it can save you days of time thinking about this upfront. Also, keep in mind the go to social solutions will not answer these questions and you should think about those solutions as complimentary.

As stated, we have fully evaluated close to 80% of the platform providers in a detailed analysis comparing over 50 attributes/offerings. Each company offers a great solution for a specific void in the market but when it comes to finding one that matches your plan we have found a proper plan will automatically narrow down your options to 2-3 vendors to select from making the procurement process faster and more efficient.

For a list of commercial platform vendors please visit our press release here and we will be updating the list in the days to come on our website at www.Endorphinz.net. For assistance with the plan, procurement process and introductions we are available at Hello@Endorphinz.net or (833)-227-4469.

Endorphinz is building the fitness services company of tomorrow, to empower brands and instructors in the digital age. The company is a fitness streaming agency that offers the first fully integrated model across service, media production, content, publishing and marketing. We handle the hard parts and work for brands and instructors to develop, launch and optimize their solutions.

As gyms and studios are temporarily closing their doors as an immediate response to help “flatten the curve” and help mitigate the spread of COVID-19, many operators and managers are scrambling to deliver content to their member base who are now self-quarantined AT HOME. Many options exist and gym brands and instructors are quickly uploading content to YouTube and various social accounts while doing live streams via Skype, Zoom, Instagram, Facebook and more to immediately meet their members with little to no investment. These are all smart options for now, but only temporary and limited.

We at Endorphinz are seeing the rumblings of a bigger shift and the need to think about this as a product while still interacting with your members to help them feel connected with your brand and instructors. Prior to the COVID-19 outbreak there was a shift taking place to an omni-channel strategy for the industry as a whole and with this huge wave of fitness content online the supply is through the roof and will now become a requirement going forward.

Prior to COVID-19, there were hundreds of club and studio brands who offer free content online while offering monetizable options. These organizations are making 6 and 7 figure incomes with a much lower cost of acquisition and running a +75% margin business. There are a lot of factors that go into achieving that but based on our research we had estimated the market to have grown last year alone at triple digit growth rates. Whether you agree with it or not, fitness streaming and content is now a necessary channel for all fitness organizations and will be a fail safe revenue stream for the future.

We believe it’s the decisions you make today that will impact how this plays out for your fitness organizations. Standing up a platform is not even half the battle and that is why we focus on program management with a heavy focus on the upfront plans being developed. We even envision the brand of the future in fitness will follow the Warby Parker model and start online first and then go into bricks and mortar. 

 

The 7 Step Process To Developing and Launching A Fitness Streaming Solution

  1. Create A Business Case Using Insights
  2. Financial Model and Allocation of Resources
  3. Platform Procurement and Integrations
  4. Content Production and Sourcing
  5. Online Store Merchandising
  6. Online Channel Development
  7. Story Media and Connections

INSIGHTS INTO EACH STEP PROVIDED BELOW TO START YOUR THINKING

CREATE A BUSINESS CASE: We say “The process of putting the business case together is the product vs the plan itself”. We have a template model we follow like any other business plan which starts with aligning the companies mission and vision with an agreeable vision for the fitness streaming business. The difference with fitness streaming is our research shows that depending on your business model the user base of the online platform consists of between 70-80% of the users NOT being members of the club. The reason is clear and it is part of the why: a more accessible product, no schedule to align with, a lower price point and it’s a top of funnel product that can serve those with “gymtimidation”. We have one of the largest fitness streaming knowledge bases with best practices which supports our efforts in creating a viable strategy.

RESOURCE ALLOCATION + FINANCIALS: Each plan requires resources, even free ones. Just like any other plan you have to evaluate what skills you have and don’t have etc. We look at resource planning as A) Time B) Money C) People. We recommend doing a top down and bottom up approach to the financials and have the KPI’s and industry benchmarks that makes for a more accurate forecast model. Currently, most platforms operate in a resource lite model with the average SVOD model delivering a low 6 figure revenue stream using their existing staff with split time between retail and digital. We are currently supplementing the brands team in a fractional role to see what the increase int output results in along with being a partner to operate these platforms.

PLATFORM PROCUREMENT + INTEGRATIONS: The plan and model needs to be in place BEFORE you select your platform as not all platforms do the same thing. In addition, there is this common trend of starting with a quick to launch platform and eventually needing to switch platforms. Options exist to stand up a browser based solution in the matter of days and then depending on the application you can have all screens covered in 4 to 6 weeks. We have evaluated close to 24 platforms and segmented the various types into 4 categories across all types of content to make the selection process very rapid. The average selection and procurement process can take up to 90 to 120 days as there are a lot of options and things to think about and learn. We have years of experience in this process and have narrowed this entire process down to days.

CONTENT PRODUCTION + LICENSING: The heart of this business is in the content. We have a matrix of all the types of content and what options exist with a quality vs cost matrix. We see 4 options with your content 1) DIY 2) Hire A Virtual Producer 3) Use A Production Studio 4) License Your Content. Each has pros and cons and a lot of people make this decision based on the cost versus the ROI. The cost to produce an hour worth of content has a large variance from $250 per produced hour and in some instances as high as $2,000 per produced hour. And when it comes to licensing content there are thousands of options but not always a publicly knowing sourcing option where one can work through aggregators or do direct licensing deals. Those licensing deals can be done in multiple ways but requires you to have thought about your business model. Production is an entire article on its own as there are many things to think about, including music (another article). We work across all 4 options and have our own virtual producer model as most clubs like to do their shoots at their location with their staff.

STORE and CONTENT MERCHANDISING: Now that you have a platform and content it is time to set up the store. When you think about your merchandising we consider this to start with meta data, content ingestion, curation, tile management, pricing, bundles and much more. This part of the process will impact the engagement once the consumer gets to the store. A good quality experience with the ability to up-sell and cross sell to users is part of the revenue strategy. In addition, more and more groups are integrating accessories and apparel with a % of all users purchasing based on the convenience. This process is not a one and done process. As an example if you have been on Netflix at all lately you’ll notice the tile management with image and promotional changes and if you do this correct you use the data analytics to execute some great programming with this.

CHANNEL DEVELOPMENT + FUNNELS: As mentioned earlier a lot of the users are not members of the physical retail store so this requires you to think about outreach. What we have found is consumers are engaging with the brand because they know of it and then discovering this digital content option which is a lower to barriers entry product and what we call top of funnel. We have found a direct correlation between the number of monthly active users in your website and your social channel followers. There are additional campaigns and paid media that can help here but we work to set up the funnels based on this type of thinking while developing a separate channel plan for the paying members as they both have different conversion rates and we believe the brand can start this thinking early way before they launch the store. We have retail to digital and digital to retail funnels that we use and test variations of based on the brand.

STORY MEDIA and CONNECTIONS: We have a philosophy when it comes to content and one of the 3 is creating genuine content. People love stories and what you might think of as behind the scenes and personal stories. There is a 7 step process to developing that compelling story line and it has a much higher connection and engagement rate when coupled with the core product. This requires you to think about this “script” ahead of launch and capture the content throughout the process. As Gary Vaynerchuk says “Document, Don’t Create” and this approach saves time and hits the spot. Capture content from the entire process from the behind the scenes of the production shoot to the stories about the instructors and more. Consumers love the humanizing side of content and this can facilitate better connections. It also can serve as a lead up to the launch of the platform to create more stickiness as the momentum factor can really help with any potential network effects strategy. We have been developing multiple concepts around story media as well as different ways to package the content into programs vs just stand alone exercise videos.

As you can see there is more than just standing up a platform when it comes to developing and launching a successful fitness streaming solution. Ask any of the existing brands with content and they will tell you it’s the content you create and what you do on top of that platform that matters the most. It can be the difference between success and failure. We welcome the opportunity to connect with you and your team to talk about this virtually as we are all heeding the recommendations of social distancing

In the event you did not see our announcement, for the next 30 days we are deploying our team to help fitness organizations develop and launch sustainable streaming solutions while waiving the upfront expenses and opening up our knowledge base to expedite the process and reduce the risk. For more information you can visit www.Endorphinz.net and we can be reached at 1-833-227-4469 or email us at  Hello@Endorphinz.net.

Written in collaboration by Endorphinz Partner, Mike Hansen and Endorphinz Education Leader Ann Marie Barbour.