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Transcription – Lauren Foundos Show 202

Chantal:          I am seriously excited about today’s guest. Not only is this an incredibly hot topic to talk about, but we have an amazing guest joining us today to talk about it. Lauren, welcome and thank you for joining us on the show.

Lauren:           Thank you so much for having me. I’m excited to chat today.

Chantal:          Now, I think I should give everyone a little bit of background, because we met only recently at the Motion Self Technology conference. Would it be fair to say that we pretty much bonded straight away over our mutual love of high intensity exercise?

Lauren:           I think it was love at first work out. The harder it was, the happier we both were. I was like, “This is the perfect fit.”

Chantal:          It was the perfect fit. I think we somehow transitioned from talking about working out and our love for fitness, to actually talking about what you do in the industry. Our topic for today, of course, is live class streaming. Now, as I’d mentioned right up front, this is a hot topic. This is something that we’re starting to get into, and we’re starting to understand more. But I thought that the best place to start with today is, perhaps you can explain to us in non-technical terms, exactly how live class streaming works.

Lauren:           Yeah, so basically we knew for fitness facilities, that we’re going to have to build an end-to-end solution that worked magically, that would eliminate them from the process, because they’re obviously focusing on what they do great, and creating great content and having a great facility, so that’s what we wanted to stay focused on. We built a real seamless end-to-end solution, where we installed typically three to five cameras in a studio space, and put a server there on site. That server access, basically the producer of the class all on its own. When the instructor plugs their phone in to put their Spotify on, and puts their mic on to begin teaching, this automation turns on all five cameras, produces the class in real-time, and then shuts itself off.

Just as you would see as a producer would have all these different screens, and they’re changing the camera angles and mixing things up, our automation is doing that on its own, because it knows what the class is going to look like and do. Then it shuts itself off. All the classes then stream live, and then they’re available on demand thereafter. From the studio’s perspective, they’re just teaching the class that they teach normally, and doing what they normally do.

Chantal:          That is absolutely phenomenal. As a member of a specific facility, what you’re saying to me is that I have increased options to exercise, because I can rock up to my studio, I can do a class there, but I can also go home later and see my very same instructor, and either do a repeat of that class, or do a different class from my own facility. Is that correct?

Lauren:           Exactly. We have a couple of use cases. One is where we stream boutique fitness studios to our marketplace, like a Netflix hub of this all you can eat classes. Then we’re also doing a sass play. For a traditional club, from them to stream their own classes to their own people if they miss a class or they’re not comfortable taking a class and so they want to check it out on their own time. Those are the two different use cases. There B-to-B play, where we’re empowering the studios to live broadcast, and then also this marketplace that we’ve created where we stream these various studios to a subscription that members can watch whatever they want.

Chantal:          If you were to have a look at the market right now in 2018, from a percentage perspective, roughly how many clubs do you think, let’s say across the U.S., are currently utilising a service such as yours?

Lauren:           I think there’s a couple of dynamics to this that are important, but I think the fitness industry in general now has 42% of its revenue coming from studios. For the clubs, I think they need to be doing the things that their studios are doing, and the studios are now … When I started this business over three years ago, the studios were not that keen on streaming, and neither were the gyms. Now, everyone is like, “I need to be streaming.” It’s been great to watch that shift happen, but almost everybody now wants to have some form of a online presence and the ability to get their content beyond just the gym, or have it available after just people go to a class. I think everybody sees that now, which has been really exciting for us. Before I was sort of having to really sell the future, and the vision for the future, and now it’s here. It’s been really good in that respect, if that makes sense.

Chantal:          Lauren, talk us through the practical side of this. Because you mentioned that your software in particular, it automatically switches on, and you’ve got these cameras in the studios. Tell us exactly how that set up looks, and what a fitness business owner would have to go through to actually get that set up within their business, within their studio.

Lauren:           Yeah. The studio, in our case, usually pays for the hardware and software, then we web share with them, if they’re streaming to our subscription service. The process starts really with us taking thousands of pictures in the studio from all these different angles, understanding what the classes look like, and where the warmup space is, and how everything works in there. Then we try all these different lenses, and really understand the lighting and all these variables. In Peloton, for instance, they’re building a recording studio, right. So their facility is made for that. We’re going into a gym that has a room that has classes, right? They have windows, and the windows bring in light, and there’s all these variables that we’ve learned to combat, because we’re not building, going into a recording studio.

We’re taking what they had and we’re making it look great. We do all these variable things, and then we come up with the best solution to fix these cameras. Then once we install the hardware, we hard wire it into the walls, and basically put a little tiny black computer box in there. Then that’s how we speak to the studio, and that’s how we make everything work magically from our end. Then we go through the trainers and we set their voices. The louder they yell and get basically the mixing of all the audio set. Then from there they simply go on a calendar, schedule a class, put the date, time, the instructor. When you select the class it knows what specific mix to do, or how to produce it. Then it magically goes off from there.

Chantal:          Wow. That is just phenomenal. We’re talking about live streaming from a studio perspective. What if I was a personal trainer, and maybe I had a variety of locations. Maybe I had some indoor sessions, maybe I had some outdoor sessions. Can an individual trainer utilise these live streaming services, or do you work primarily with fitness studios only?

Lauren:           We work primarily with studios, but we did set up a location to bring in trainers that were not associated to our studios, because we realised at the gate, if we have a thousand yoga studios, the user doesn’t know what yoga studio to watch. We realised that a curated mix was the best approach, but at the same time, we realised there’s going to be great people that don’t work at the places that we’re partnering with. We kind of played devil’s advocate against our own model. The rise of the trainers is a real thing, and to be able to empower them as well. We are in tandem bringing in trainers into a non-granted facility, to also give them a shot as well. I think ultimately if somebody’s doing a great job and garnering a lot of action, it shouldn’t necessarily matter whether it’s a person or a studio. We’re sort of playing devil’s advocate in that way against ourselves. But I think we certainly are open to creating a facility like you’re explaining, where somebody could go in and create live content, because I think the demand is so high for people to have that.

We’re really closed about leveraging our technology, and only doing it the way we envision, which is sort of this Netflix hub of all the classes. Now we’re open to exploring a sass opportunity where somebody can install this technology for whatever purpose that they want, because we have the answer and we’re like, “You know what? We should just empower everybody that wants to do it in the way they see fit, and make it work for us financially, however the deal’s going to work.” At this point now we are expanding out of that.

Chantal:          Lauren, for the club owners that are listening at the moment, they’re intrigued by this concept. Can you give us a rough ballpark figure of what the investment is for someone to get up and running with streaming live video or live classes from their studio?

Lauren:           Yeah. For us, for the clubs now, we’ve just started to do this. Because we’re not getting the user revenue like we are in the other model, we have to sort of do it as a software as a service type of play. So really the cost would come down to, we’re going to integrate it into your website, so however you want that to look and feel. We’re going to give you a hundred features, right? Reserving a spot for a live class, leader boards, all these different features. You’re going to pick the features that you want. That will dictate that upfront cost, depending on what you want and what you don’t want. It could be between 10,000 and 25,000, I guess, depending on how crazy you wanted to get. The hardware typically costs $10,000. We don’t upsell it. It can be slightly more or slightly less if you have more or less cameras. Because the cameras are a heavy part of the cost.

Then from there you’re basically are going to pay for what you use. The more you use it, the better it’s working for you, the more you’ll pay, but the happier you’ll be because it’s working. Then the costs are basically fixed off the minutes watched, and then we’ll scale up and the numbers will, the cost will decrease as you continue you to use in size. The main is this upfront hardware and software integration, and the rest is basically scaling on how much usage you’re getting.

Chantal:          I know that one of the, I guess, concerns that some club owners have had in regards to virtual fitness and this type of operation is that, perhaps it draws members to exercise outside the club, which is what we’re talking about. In your experience, what effect has live class streaming had on member retention? Are there any case studies that you can share with us for how that dynamic has worked for a club that’s been traditionally just utilising just live classes in the studio, to then incorporating the streaming so that members can access it from home as well?

Lauren:           Yeah. I think people always think it’s going to cannibalise their business, and it’s not going to do that. It’s exciting. When we partner with a new studio, they’re always worried about that, and then they start to get emails from people. I don’t live there anymore. They’ve moved away and they’re so pumped to be taking the class, or maybe they can’t go on Tuesdays and Thursdays because their kids have soccer practise, and now they’re taking it at home. So they’re still engaging in their brand. It’s great to see those emails come, for I think the one or two people that it would displace, I think the amount of people they see that are having a positive effect has been really exciting. Nothing replaces an in studio experience. That would be like having a robot as a boyfriend, right? It’s the future and those things are happening, but nothing replaces a person. I think the other thing too in the argument I always make is like, the NFL is on TV, and people don’t not go to games because they can watch it at home.

Beyonce’s on the radio, and people don’t not attend her concerts because they can get it at home. It’s almost the opposite effect. In fact, it drives people in the doors. Once more people are talking about it, they start to become curious about what’s going on in there. I think even watching Peloton you could see the same thing. People are curious what it’s like, and what goes on in there. I think it actually does the opposite of what people’s fears are.

Chantal:          Lauren, one of the topics that we talked about during the Motion Self Technology summit was wearable technology. Can you tell us, how does live streaming work with wearable tech to actually enhance the user experience?

Lauren:           Yeah. I think it’s an important part of it. Right now, if you reserve a spot for an upcoming live class, and your instructor knows you’re taking it, and we just completed the integration of wearables. To create live leader boards, similar to that of what Orange Theory has done, MyZone has done, and stuff like that. That was, they can really connect their remote user to the room. But more importantly than that, I think just my macro thesis around digital health in general is, I really want to take change and narrative of losing 30 pounds in 30 days, and all this other stuff that’s been put out there, to … You can use the wearable data in a way that shows people that, “Hey, maybe you didn’t lose weight since you started working out, because that’s highly tied to eating plain chicken salads, but this is still working for you. Your heart is working more efficiently.” This working out, even though you don’t have a six pack, and people get so disappointed when right away they didn’t shred all this weight, because that’s tied a lot to diet.

I think being able to show people that this is really good for, your heart is happier, this is good for you, I think will be a powerful tool. Just as people with their counting of 10,000 steps, it really triggered something in a lot of people. They’re like, “I gotta get to that 10,000.” It was great. I’m like, “God bless you realised that moving is an important thing.” But it did do that to people, and I do think there was something really powerful there. So as these new wearables come out too, that sort of take a 3D scan of your body and track your movements. If you do bicep curl or a push up, and it knows what you’re doing and it’s counting those reps. I think that information will also be really important, because if you’re a high level athlete or a big jacked guy in the gym, you’re writing down bench, 180 six times. That’s how you get stronger, really keeping track of that. But most people aren’t that neurotic. I think if that information is syncing wirelessly, I think that’s game changing for people.

Being able to show them their perceived intensity may be that they’re killing themselves, but then the facts are, they really did 50% less work. I think that information given to somebody in a fun way will be really helpful for them. I also just believe, currently if you have a job and you get health insurance and you go to the gym to get money back, you bring a form in and you say, “Can you sign this and say I was here 200 times?” And the guy at the desk will sign it. I think the wearable data will be something that the insurers would look at eventually, and reward you for that, just as you get penalised for smoking and stuff like that. I think the digital play is one for the gamification, and two for the health insurer, and also as medical devices continue to get more connected the doctor would be able to use that information as well in the future.

Chantal:          I really look forward to hearing how that journey progresses, and perhaps what we could do is touch base, I’m thinking this time next year, because I’d love to see how that’s progressed and where the live streaming, or live class streaming industry is when it comes to wearable tech. Lauren, I was hoping that maybe you might be able to talk us through a case study, because I always feel like the best way to truly understand the way that a new technology or a new product comes to market is by looking at it through the eyes of a gym owner. So, if you were to choose, and you don’t need to name names, but if you were to choose a case study of someone that you’ve worked with that has gone from being a standalone studio, bricks and mortar, to implementing live class streaming, and what they’ve gone through along the way and the benefits that they’ve gotten, and how it’s kind of transformed the business. Can you walk us through a case study that you’ve experienced firsthand, and just talk us through that?

Lauren:           For sure yeah. I think it’s funny. The first installation for us was a rollercoaster of emotions, because the studio was [inaudible 00:15:08] these emotions. Now, I’ve been through it so many times, so I know these stages of emotion that they go through, right? Because as a gym owner you install this hardware, and you need to tell the people in your facility, and they see it, and so obviously it’s really tiny but they still see it the first day, and so they’re all asking questions. The owner is always panicking. It’s like, “Oh, was this idea?” They’re questioning everything. The first time this happened I was having a heart attack myself, but now I know the process, and I know the end result through this transformation is a great place. The first days are stressed out. People are asking questions, and good and bad. That always happens. Then within two days after everyone figures out what’s going on, nobody even cares anymore that, that’s happening. They forget about it. It’s little tiny things that doesn’t affect your day-to-day operations.

The whole point in the way we operate, is that we aren’t affecting your homeostasis, that we’re integrating into what you’re currently doing, and everything is done the same. Quickly that fear starts to go away, and slowly the gym, like I said, it starts to get these emails from people being like, blast from the past sort of. People are reaching out and loving that they’ve found this ability to use their content. From our perspective too, then we give the gym a lot of information saying, “These 500 users have come from you. These 3,000 users didn’t come from you, and Barbara watches 20% of her time at your content, and then next month she watched 30, and now 50. This lady is gaining traction on your content.” Kind of giving them the data to be able to talk to these users and … Ultimately the users are going to do in the marketplace studies a lot of cardio. The cardio girl’s going to run, and then she spins. They move around this wheel and stay in the marketplace, as opposed to churning out because they have all these options.

Then we also give them data on most watched class and most popular times. Even just the language that’s used in the things like … Everybody searches abs. Even just what people think they want, right? Again, abs you need to diet a lot to let those babies show, but people like that. It’s interesting just the language then, when they’re not seeing the class, or they don’t know the people. What they find important and what they’re looking up. We can actually see, which is kind of creepy. We could see the users experience on the website, so where they’re trying to click that maybe they can’t, or what they’re searching in. We can figure out a lot of stuff like that from just watching those videos and really help to iterate, and also help the studio iterate the in studio experience. I think a lot of instructors have found … We found that a lot of instructors watching themselves or watching other instructors, so that was also something interesting. One of our studios has a certification programme, so after people got the cert they were then watching the people continuing on.

I thought that was pretty interesting. I think now with the internet, people used to be scared that their method would be shown or that people could copy it. I think now the internet is what it is, and you need to be [inaudible 00:18:11] and own it. Everyone will say they’re doing your thing, as opposed to trying to keep it in the doors of your gym and keep it a secret. I don’t think that’s the world that we live in. I also believe too, you can have 500 brick and mortars across the country, but the power of the internet is very real. Blockbuster in the States was eliminated off the planet because they didn’t build Netflix. Trying to not adopt technology can be a dangerous thing, and it’s been exciting to watch the studios go through this transformation and be pumped. Now they’re like, “What do we do next?” To watch them get to the point where they get it now. So it’s been really exciting going through those journeys with different brands.

Chantal:          I think it’s really interesting what you were just saying about data, because it sounds to me like the level of insights that you’re getting into a lot of the members, and the people that are taking place in the classes. There’s probably a lot more insights than what we would have ordinarily about our members. I think that’s really interesting in how you can utilise that data to kind of think about what we’re providing to our members on a day-to-day basis within the clubs.

Lauren:           Even with our skipping. If they fast forward moves, or segments where you’re going on a finding yourself spiel or whatever it may be, they’re not going to tell you that granular of feedback, basically. That also is important. You can iterate the experience, or if they’re rewinding and going back to doing things that they love. I think that’s the answer right there, and nobody’s going to give you that broken down. No matter how much they love you, isn’t going to give you that much broken down feedback because it will be hyper critical. That information, I think, just from the classes alone is really helpful for the studios.

Chantal:          What about when it comes to integrating various types of software? Because you mentioned earlier that one of the things you do is you have the class scheduling and people can go in and choose the classes. But obviously a lot of, or majority of fitness business owners will have existing software associated to the business. Does the live class streaming tech have a way of communicating and working in? Or how does that side of the kind of … You can tell this is not my area of specialty. How does the tech integration side work with existing software, and then bringing in a new platform?

Lauren:           Yeah. We don’t have it so it integrates currently with anything, because the majority of our software is the automation or the production of the class. We don’t have it so that they can … Kind of go off their current schedule or maybe sync their mind body class info. Because once they create the class it’s really just a onetime thing, and then the information’s there. It’s not like that it’s so … It would actually take so much time to actually connect the things at this point. We haven’t really had a case where we’ve done it yet, or thought about doing it, or allowing somebody to use their mind body log in or those things potentially. If we see enough demand for that, and if we think it really enhances the user experience, we’ll certainly explore those things, because we don’t want people having to log in a million different places and the more friction, the less people will like the product. We’re not opposed to doing it, but we haven’t found a case where it really, yes, cemented and made solidified, and made things easier for anybody at this point yet.

Chantal:          Okay. Lauren, you’ve given us such a fantastic overview about live class streaming, and I think you’ve really helped us understand the process a whole lot better. Let’s wrap everything up today, and perhaps you can share with us three tips for clubs to be actually utilising live streaming within the next two years.

Lauren:           Yeah. I think it’s important to utilise live streaming. One, it obviously, I think it gives people a chance to experience, seeing that they may not be willing to go take the class or … People are nervous to take classes, I think will get more people trying more things and engaged in your brand. Obviously you can use it however you see fit, but you could geo target people that aren’t actually going to your facility yet, and try to get them to come in by giving them that content. The content doesn’t have to be your spin class, because the person as home doesn’t have a bike, but you can make content that would cater to somebody that isn’t currently going to the gym. Once the hardware’s there you can live stream and do whatever you want. You can try a million different things. It doesn’t cost anything to produce it, it’s easy to produce at that point. I think that’s a great way to use that, and I think I know from the instructors that are here in New York where I live, which New York is so intense and so crazy with fitness.

I think, some of those instructors, they don’t want to teach somewhere where they’re not live streaming now, because once they start live streaming and they’re talking to more than the 30 people in that room, it becomes a really powerful thing for them. To go back to just being in the four walls seems like a digression. That’s what’s happening here in New York on the most cutting edge phase of that. I think it’s something to keep in mind that obviously video content is so valuable now. Facebook prioritises video content. Instagram. Being able to just have this to even make social media content, I think is a powerful tool. People always look at Peloton and say that they’ve built so much and spent so much money building this product, but their community lives pretty much on Facebook, which is free.

I think, yeah to see what these great brands are doing and emulate them in a way that’s cost effective. You don’t need to raise a billion dollars and build Peloton, but with $10,000 of hardware you can do the same thing, and do it on a different scale. I think it’s important to keep advancing with technology and staying up with the trends, but you don’t need to go crazy, spending tonnes of money to do it. I think there’s ways now, and hopefully we’re that solution in terms of live streaming that makes it affordable.

Chantal:          That is phenomenal Lauren. Thank you so much. I want to just encourage everyone to actually jump on and have a look at your website, because I found that going onto the Forte website was, for me, a really good way to truly understand how your particular product works, and get a really good visual of what it looks like and how people can get involved. I’m going to put all of your details in today’s show notes. So Lauren, thank you. I’m so thrilled that we met. Not only because next time I’m in New York City we are training together. [crosstalk 00:24:30]. It’s going to be brilliant. Listen, thank you so, so much for joining us on the show. This has been absolutely brilliant, and thank you for being a guest on the Fitness Business podcast.

Lauren:           Thank you so much. Thank you, I appreciate it.

 

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