COVID-19 has changed everything from how we live, work, travel and work out. Over 60% of ClassPass users want digital on-demand classes — even after COVID-19. Hear from a panel of studios owners from around the world discuss how they maximize revenue with digital classes.

The Panelists

Hosted by Rose Yan, Director of Pricing & Inventory at ClassPass, together they will cover everything from what current digital offerings are available, how to create the best content you can, and where digital classes are headed.

Quick Tips for Digital Content

  • Correct pricing and quality are the most important factors for digital offerings.
  • If you decide to use music in your offerings, be sure to check the legal implications or go with a royalty-free provider.
  • With digital offerings, the people that can take your classes are no longer limited geographically. Use an aggregator, like ClassPass, that will give you access to a large group of people and clients that can try your digital classes.

Get access to the full webinar here:

Maximizing Revenue with Digital Classes Webinar Transcript

What format of digital classes are studios currently offering?

Rose Yan, Director of Pricing & Inventory, ClassPass: OK, so we’ll jump into the actual content now, and so starting off with just a big picture view of the current digital offerings, so just looking at ClassPass partners, 72% of our partners are actually offering livestream classes right now. Interestingly, we have a small portion of partners who have tried it, no longer doing it, but the majority who have tried it are still doing it. We also have about 30% of our partners who are offering on-demand classes, so these are video on demand classes that users can start and stop whenever they want.

Then, about 70% are offering personal training, and then 12% are offering no digital offering. So, you can see, the majority of our partners are leaning into the digital space during this period.

I’d love to have the panelists tell us what digital content they’re currently offering. Vanessa, I’ll start with you. I’m curious how you thought about offering video on demand versus live stream and why you landed where you did?

Vanessa Bourne, Owner, Ekam Yoga & Pilates and BOXHAUS: Sure. We did both. We did livestream and on-demand, so I’m in that 4%. We no longer operate the livestream I think because livestream for me, with timing it isn’t enough hours that we could operate especially for our type of clientele that are always on the go. They’re booking classes at all different hours, in fact, that the on-demand option was a lot easier for us to find talent, and more so, just made more sense to me. For the amount of effort that you kind of put into that.

It’s a library of classes that you can keep building on, especially when they’re professionally done and done well. You know, adding on to that library you work for, and it continued growing it for the long haul, so it just seemed to me like a better investment, and that’s something that I really want, is to focus our effort in when it came to online offerings. And to be honest, our teachers weren’t all excited about doing the livestreams. But they’re really excited about the on-demand, I mean, it’s edited, it just looks a lot cleaner and better than the livestream offering.

So, that was the reason why we kind of leaned into on-demand. We scheduled a bunch of shoots during quarantine. Obviously, because the studio was available and open, we continue to now shoot on the weekends or will shoot probably once a month. And will crank out 10 hours of content, of on-demand classes and have those. We add about two or three videos on our library per week for all the brands, for pilates, yoga, and for boxing. And people are happy with it. 

There’s a good amount of people that are still staying in, and even the people that have been coming back to the studio, they are also still actually continuing to use the on-demand because they like the option. We sold bags as well as we sold a few reformers. We’ve had a lot of people kind of still doing both, coming into the studio and doing the on-demand classes, so it’s been a nice fixture, especially with the capacity lower than it should be.

Rose Yan, Director of Pricing & Inventory, ClassPass: Ari, I know you said previously, you are teaching livestream classes. It sounds like you’ve leaned more into the livestream classes at KAMPS.

Ari Karl, Owner & Co-founder, KAMPS Fitness: Yeah, so we initially started offering livestream classes, and through Zoom, we’re offering three or four classes per day. And we chose Zoom just because it’s a very interactive platform, where people can have their camera on and use the chat feature. So, we still offer these three, three to four times a day. We know that people are always chatting, and feel like they’re part of the community, so we want to maintain these classes going, but we also know that the times don’t always work for everyone. So a little over a month ago, we created an on-demand platform as well, so we have a wide variety of class types and durations. We have 15-minute stretch classes, we have 30-minute classes, we also have some of our 15-minute live classes, we just put up there, although they’re not as high quality as our on-demand platform. We just wanted to make sure that our clients and customers had a variety of options, so yes, we’re currently offering them.

What kind of digital classes are being offered?

Rose Yan, Director of Pricing & Inventory, ClassPass: Coss, have you similarly adapted any of your classes, or have you mostly offered the same type of classes you as we’re offering in person? 

Coss Marte, CEO/Founder, Conbody: It’s definitely different. The on-demand workout videos have like 10 to 20-minute workout videos for the on-demand group. People want to get that 45-minute experience livestream. We have a higher price point. And so that’s what’s different. We expect people to pay more when we can view their boxes. And it’s all bodyweight-only equipment. We started offering mats. We ordered really high impact mats from China and put a CONBODY stamp on it and started making money off of that. 

It’s hard to workout in NY. A lot of people were complaining that they had thin yoga mats. Or they didn’t have anything on their floor because it’s so small. And neighbors literally banging on people’s doors while they are doing the livestream or complaining because of the noise level when their body drops down to the floor. So, the high impact mat was a solution that we could market to our customers and it solved it. 

Rose Yan, Director of Pricing & Inventory, ClassPass: That’s so interesting. So, I know that fitness equipment has obviously been in such a shortage, so it sounds like you’ve taken the steps to become a supplier of fitness equipment that your clients are asking for, similarly to Vanessa, what you were saying as well. It’s a really interesting, additional avenue.

And, Will, I know at SH1FT you have a ton of different genres. Is there one that you guys have found to be particularly successful that you’re doubling down on during this period?

Will Brereton, Founder, SH1FT Fitness: Yeah, so we have mindbody yoga, bodyweight, resistance, and step, and cycle in the VOD for an instructor format. We have a bodyweight format and a resistance format. They use dumbbells, or kettlebells, weights, weight plates. 

We release new workouts every month and so when we went into lockdown, we started a special lockdown series. We thought about the things that make at-home workouts difficult, which are small apartments, so limited amounts of space, constraints on the ability to film, so whether or not you can stand up and get up and then also equipment. 

Like Ari was saying, we encourage all of our instructors, so I think that this is more from what our instructors can deliver rather than what we do. We encourage them to, like use wine bottles, backpacks, fill up water bottles, kind of make their own weights, so that they would really allow their users to see that they could do that too. 

And then we created a special set of workouts that worked around those factors. So, we had a couple of webcasts that didn’t involve any floor work so that you wanted to connect through the screen, you could do that. And we also created some of the resistance classes, specifically didn’t require heavy weights, several more volume-based, rather than resistance based.

How to create the best digital content

Rose Yan, Director of Pricing & Inventory, ClassPass: That’s really helpful to understand kind of what you guys are offering. And I’d love to jump now into how you guys have put that together, and how you guys have created the digital content since I know you guys have a lot of tips and tricks here.

I think one of the really interesting things that we have been seeing in classes and in terms of our user behavior, is that quality is actually more important than brand when it comes to digital content. So when we looked at our top-performing livestream partners, we didn’t see as much of a correlation to in-person popularity as we thought would happen. Only about half of the top-performing partners were, you know, our top-performing partners in person. The other half for other studios who maybe weren’t, wouldn’t have gotten as much reservation volume in person, but actually we’re getting a ton of traffic online.

We’ve had users and user surveys, you know, you never know how good the classes are going to be, even from the most popular. And a lot of that depends on instructors, like no matter what brand is right. It’s you and that instructor and the quality of that instruction. So that is really important for life and in particular. And I think the other interesting piece, I know this is a lot on this graph that basically we had asked our users, what are the most important factors to you when you decide to purchase subscriptions to digital content, either thing. And you can see that from this blue on the bottom, you can see that if you look at the second bar, 77% said that the quality of on-demand videos is very important.

You can see, from the second to last one, you can see price is very important, and the fourth bar, 63%, thought that the quality of life and classes were most important. Very important. So you can see, basically price and quality are much more important than say the studio brand, which you can see from the fifth bar, only 31% said that the brand was very important.

How to incorporate music into your digital offerings

Rose Yan, Director of Pricing & Inventory, ClassPass: That’s a really good segue to our next question on music. And I think you guys have all spoken a little bit about how you use music in your classes, Spotify playlists, et cetera. I think that, to the extent that you do want to use music in the classes, obviously, there are, especially with popular music, there are music licensing requirements. 

So, I’m curious if any of you have had experience with that, or, you know, any additional kind of points on, how are our audience, can best legally use music in their classes online?

Ari Karl, Owner & Co-founder, KAMPS Fitness: So we just made sure that we signed an agreement with that, with ASCAP, and, and hired a lawyer to make sure we’re running this process legally. And so, that’s, that’s pretty much all the steps we’ve taken so far.

Rose Yan, Director of Pricing & Inventory, ClassPass: I think the most important step you said there was talking to a lawyer to make sure that is correct. Will, as a former lawyer, do you have any additional beneficial thoughts on the music piece?

Will Brereton, Founder, SH1FT Fitness: Yeah, I mean, this is quite a few royalty-free providers. I think one of the things that’s pretty important is that rights differ in every jurisdiction. And so it’s really difficult to get fully globally cleared stuff, obviously, I have a European and UK perspective on this rather than a US one. For example, in the UK, there’s PRS MPP alum. So there’s two different collection bodies that both take a cut when it comes to using music. I think that for the livestream by far and away, sharing a playlist that they can play themselves, or having a Spotify channel, where there’s multiple playlists for different moods, is by far the best way of doing it. If you do want to use music, there’s places like Soundstripe where you can either pay a monthly license, or buy individual licenses, if you want to do that. Original music is pretty difficult. I would advise against it.

I know people do use it, but you know, that Peloton got into massive trouble, I used to work at Les Mills, and they spent hundreds of thousands of dollars per year on music licensing. If you’re a small studio, you better off going for royalty-free stuff or avoiding the music problem altogether.

How to price and advertise your digital classes to increase revenue

Rose Yan, Director of Pricing & Inventory, ClassPass: Such helpful tips, I think, in this entire section we’ll quickly move on to the pricing and marketing piece. So on the pricing side, from our user surveys, users are expecting digital prices to be cheaper than in-person classes. You can see that the vast majority think that livestream classes should be cheaper.

A lot of the user surveys are saying because there’s no amenities because you’re in person directly, you know, connecting with instructors. Interestingly, a good portion think that livestream should be free given the, you know, the variety and, you know, an abundance of digital content out there.

And then the other I guess, throwing it back to the panel’s panelists here, Ari, I know you KAMPS had an interesting model when in terms of pricing, building an audience, and then monetizing it. So, I like to combine this question, because I think pricing often is related to marketing. So, you know, for your digital content, how did you guys think about the pricing and marketing piece? 

Ari Karl, Owner & Co-founder, KAMPS Fitness : So, so when we started off, I decided to offer the livestream classes for free with the optional donation. 50% of our donation went to Feeding America. and 50% of the donation went to our company to support our staff and trainers. So our goal was to try to expand clientele, and not just our current in studio clients, but the reach of more global audiences. And so, we offered the live classes again for about a month and a half for free, until we collected over 10,000 emails or so. We realized around the 1 month point, we started talking how, you know, we’re not going to be opening anytime soon. We believe that this pandemic is going to last for awhile, it’s not going to be safe to open up our studio. How can we monetize to survive. 

So, we came up with a solution of fact figuring out how we can offer an affordable price. We agree that the offering is not the same quality as our in studio experience. So, and we also know that people are dealing with a lot of layoffs in tough times. And so, we came up with a pricing that was $7 per class. Or you can pay $25 and have an unlimited access to our live stream live stream classes per month.

Still our model for our live stream classes. Now that we have implemented our on-demand, you pay $15 a month for the on-demand, unless your livestream member, you can get a pay, $10. Though, you don’t have to do it on demand. You can do the livestream, you can just do it on demand. But, again, we wanted to keep everything affordable and focus on just kind of building our clientele. We still are trying to reach everyone throughout the country. We’re thinking, you know, quantity, number of people. How can we attract? The more the merrier. And so, yeah, that’s, that’s kind of where you’re at right now.

Rose Yan, Director of Pricing & Inventory, ClassPass: Yeah, that sounds really smart. Will, before we get to you, I love to kind of shift the focus a little bit more on to the marketing side. Vanessa mentioned Instagram, which I think a lot of our students have been using is kind of free marketing efforts to build an audience especially. We have another question from our audience about specific marketing platforms that you know, you guys are using if there’s anything different marketing and digital offering versus on demand.

Will Brereton, Founder, SH1FT Fitness: So like when everything is shut down so abruptly, I totally understand why everybody started doing stuff for free on Instagram. I’m really glad that people are pulled back from it because it doesn’t really serve the industry at all. I think overall it was a bit of a handbrake, and everybody needed to still connect with their users.

I think on the marketing side having spoken to ex colleagues like Beach Body and Les Mills, and various places that do big on demands, Peloton is strangling the industry in terms of acquisition on digital. So if you are starting up an on demand channel, you have to think of who you send this thing to and the people you’re servicing are the people that would have been coming into your studio anyway. You’re not really going to be able to compete on a search engine optimized marketing basis or even Facebook marketing with Peloton when they give them the 90 days for free. But what you definitely can do is markets your existing client base and the adjacent client base to your existing client base. So, getting friends and family, getting people that live with the users that are using your product already and engaging him, getting them off the couch.

I work with one studio in London and they’re not cheap. They’re like £199 for an unlimited membership. When it first switched, they basically said anybody that has been laid off or furloughed can continue for free. For anyone who hadn’t, it was still being paid was still payday for membership, and they had 85% of the members still paying the £199 per month for the first three months of the lockdown period. So people are definitely willing to pay, but you have to think about who you can reach. 

And so on a marketing basis, I would say, utilize aggregators like ClassPass. For live streaming, advertise through your community, and get them to bring other people along. Get people to join in their classes and organically grow. And if you’re doing VOD, I’d say that you need to participate in some kind of aggregator. So, for example, ClassPass, they can be aggregating all of VOD. What that will do is it’ll allow you to get access to a large group of customers and clients that will try your stuff. And then potentially get engaged with it, and use your livestream or your real-life options. But um, you need, you probably need to focus on your local community or your adjacent community, or work with an aggregator if you want to market so widely.

The future of digital classes

Rose Yan, Director of Pricing & Inventory, ClassPass: Awesome. And I am conscious of time, so I want to make sure we get to how you guys are incorporating digital into the, just the feature of your business. So, I think this comes to no surprise to people, but users are reporting that they are going to continue to use digital even when in person studios open up. 60% of our users said that even after this COVID period, they are going to continue to use digital. There is a draw to stick with those at home workouts even when things reopen. 

Discovery and variety seeking is higher in this online world. We are seeing double the amount of discovery, meaning reservations, first time reservations at new studios, on our platform in a digital world versus in an in person world because of course, no geographic constraints here. So, I think that’s really exciting. People are taking classes all over the world, all over the country. 

And then I’ll turn it back to you, the panelists in terms of how, how are you thinking about the future of incorporating digital into your business? So Ari, you mentioned you guys are gonna be set for awhile, sounds like, your, you’re doubling down on, on the on demand piece as well.

Ari Karl, Owner & Co-founder, KAMPS Fitness: Yeah, I think digital will be a core part of our business, moving forward beyond the pandemic. You know, we think it’s, you know, that it’s a very accessible tool, not only for our clients but prospective clients around the globe. The future of our world right now is, it’s going to change, change after this. And, I think everyone is starting to realize that. It’s difficult to anticipate what the client’s behavior will be. So, we’re going to maintain and continue to offer a wide variety of on-demand and livestream classes, beyond the pandemic. And so, that means we, you know, probably continue to invest in, quality, invest in the future, in marketing, and really putting more money to spend a lot of time trying to perfect, you know, trying to make our model better. The quality of care as we discuss now is just tying everything together and expanding and re-investing into not only our trainers but also for our clients. But, also, just gaining new clients throughout the country.

Yeah, we’re, or this will be part of our company. As I mentioned, future studios we open will have a section specifically for filming live classes and on-demand classes. With high-quality equipment, you hope to, you know, reach, continue to reach out to people around the world.

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