BeachBody CEO discusses journey from ‘8-Minute Abs’ to creating the ‘Netflix for fitness’

The on-demand economy is usually associated with the Uberization of products.

Smartphone users can now summon what feels like an endless list of services — a taxi(Uber, Lyft), a massage(Zeel), babysitting(Hello Sitter), cleaning service(Handy) — to wherever they may be located.

But let’s not forget that the term “on-demand” is inexorably linked to content. BeachBody CEO Carl Daikeler certainly hasn’t.

The Lansdale, Pennsylvania native started out in the infomercial space with 8-Minute Abs in the 1990s. Today, he’s at the helm of a fitness empire that provides literally thousands of workout videos to more than 23 million customers.

Santa Monica, California-based BeachBody started out in 1998 with just $500,000 from angel investors, and its popularity spiked thanks to the dedicated following of what Daikeler calls “walking billboards.” Loyal customers made testimonials to prove just how well programs like “P90X” and “Insanity” worked, and DVD sales spiked.

As of 2015, the company reached $1 billion in sales.

But as DVDs go the way of VHS tapes, something needed to change. It became more efficient to convert the content to online, so customers could stream it via their computer or mobile device. Plus, that would save on shipping costs. Essentially, Daikeler wanted to give his company the Netflix treatment. However, when it came to settling on a price, his plan didn’t go over well with the company board.

“It was scary actually,” Daikeler tells me (see link above to podcast). “I remember the board meeting where I proposed that we charge $99 a year, flat, for all of our content — you get it all.”

A skirmish ensued. Board members cried: “Now, wait a minute, you charge $120 for one P90X, that’s 13 workouts, and then if that customer loves the workouts, they get Insanity — there’s another $120, so that’s $240.”

Daikeler eventually won out and made what was essentially $7,000 worth of content available to customers for less than $100.

So far, it has worked. BeachBody On-Demand is currently nearing a million subscribers.

“That number has to be 10 million,” Daikeler added.

The company also gives customers nutrition advice and discount access to its food and shake offerings, which account for about 65 to 75 percent of BeachBody’s revenue.

Daikeler was recently in New York to meet with product developers to discuss a new fitness and nutrition concept that BeachBody has in the works. He stopped by our office to discuss how he got his start, the pleasant surprise of hearing 8-Minute Abs mentioned in the film “There’s Something About Mary,” working with private equity firm LNK Partners, taking Beachbody into the tech sphere and why he’s “flakey” about an initial public offering.

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