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How P90X maker Beachbody is taking on Peloton

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Home workout video and fitness program company Beachbody went public under the ticker sign 'BODY' on Monday. The Beachbody Company Co-Founder, Chairman and CEO Carl Daikeler joins Yahoo Finance Live to discuss the company's success amid the pandemic and outlook for the fitness and nutrition space post-COVID.

Video Transcript


ZACK GUZMAN: Welcome back in to Yahoo Finance Live. Today we've got a very interesting debut from a company you may know well. That would be Beachbody going through not only just a blank check SPAC merger here, but merging with another company as well, MYXfitness, the company behind a workout at home bike, which is interesting, the combination of Beachbody and that company potentially taking on Peloton. As we've seen, the workout from home thing really catching on here in the pandemic. Interesting timing.

And happen to be chatting it through here with the co-founder of the Beachbody company, and CEO of Beachbody, Carl Daikeler joining us right now. And Carl, congrats, first of all, on finally making it here, the debut. Obviously, people have known the Beachbody company for a while. If you're a P90X fan out there, also in the mix. But talk to me about what this deal does to help Beachbody in its goals to really boost America's and the world's fitness now.

CARL DAIKELER: Well, look, we have been at this for two decades. And it's really exciting to be able to add indoor cycling to the genre that we offer our subscriber base. The Beachbody on Demand platform has been really an amazing experience for us. But through this transaction, we get to now scale this to world class level. We're 99% in North America, have barely scratched the surface in terms of who we can reach in North America. But now we get to take IT global because we'll have the resources to do that, plus one of the highest quality stationary bikes priced very affordable for people. We consider ourselves to be fitness and nutrition for the masses, and we're just so excited by the prospects that are unlocked by the transaction today.

AKIKO FUJITA: Carl, this is a space where we've seen incredible evolution over the last year, particularly with at-home workouts. I know you're launching a premier tier in the fall. But I'm wondering what you think the, what you see as the outlook in the space. Is it going to be a hybrid approach? Are people going to stick to their at-home workouts? What do you see on the horizon?

CARL DAIKELER: Well, the research that we've seen is actually quite encouraging, that 87% of the people who were locked out of the gym, basically, and had to find an in-home option, 87% of those surveyed said they're going to stay with their in-home fitness, either as a hybrid, with their social experience at the gym-- but consistency is so much easier and more convenient to achieve at home-- or they're going to completely revert or go use the in-home solution, because they get this combination of fitness content and meal planning content so that they get the total experience.

So from our perspective at Beachbody, this has been the premise for two decades, that working out at home is just more convenient. And from the P90X days, Insanity, 21-Day Fix to the content that we're going to be creating live this fall, to be able to roll out of bed, take a pre-workout energy supplement and get the workout done in 20 to 30 minutes is just the way most people are going to go about it. So we think the prospects are very good for growth in this category.

ZACK GUZMAN: Yeah. And you specifically, I mean, you think about all those things you listed off there, even before that, what, Eight Minute Abs, the marketing in the space, it's going to take some of that secret sauce to maybe take on Peloton, just because they had a lead in the space. As you noted, the MYX bikes, they're about $1,000 less when you look at the price, than a Peloton. But what about the marketing, you think, is going to be able to make you capture maybe the market that might say, you know, I work out at home, I need a bike, I just don't want to spend as much on a Peloton, how do you see that battle shaping up?

CARL DAIKELER: Well, it's not a zero-sum game. I mean, there's 150 million people in North America overweight or obese. The TAM is outrageous in this space.

So we've been acquiring customers for 20 years profitably and running the business out of cash flow. Now we, for the first time in our history, have the capital resources to be able to acquire customers from the top of the funnel, doing brand marketing, doing the things that Peloton did quite elegantly in their run up. Now we have the ability to take our story out, not be the best kept secret in fitness, known for P90X and the underlying brands, but now known as the company that delivers the total solution.

And frankly, we've got 400,000 of customers turned what we call coaches, basically accountability, an accountability community that are trumpeting the new releases and the new breakthroughs that this company puts out on their social media. It's like this built-in amplification of any of the marketing that we do that is really the secret sauce. I mean, it's a stunningly powerful business model driven, frankly, by customer success.

AKIKO FUJITA: That total solution you talk about, is that ultimately where this market is headed? I mean, I know you say it's not a zero-sum game. But there is a lot of competition, if we're talking-- a lot of investments up front for the consumer, whether it's buying a bike or a mirror. You know, who ultimately comes out on top? Is it about sort of building out the overall ecosystem?

CARL DAIKELER: The ecosystem is critical. We have a bit of a walled garden. We've got community with our own groups inside the business. We've got our own e-commerce. We've got the bike. We've got meal planning. We've got supplements, all of that offered within this ecosystem.

But I gotta tell you, the difference is the experience of the content. If what happens on that screen isn't compelling and makes you want to come back the next day, it's no good. And whether you're a person using the bike or whether a person you're spending $100 a year for the digital subscription, what we've got to do, and what we've done for 20 years, is create content that blows people's minds.

You mentioned Kevin Mayer, former CEO of TikTok, joining our board. That's why FRX chose Beachbody as the company, their target for the SPAC. Because they recognized the depth of the digital library that we created and the fact that when our engagement of content is as good as any entertainment company out there. So we're excited now to bring that to the world.

ZACK GUZMAN: Yeah, very interesting. You also check on that as a strategic advisor as well now, maybe potentially speaking to how big it could get when you use all these things. I myself got to blow off the dust on my P90X tapes, maybe get back to it. But Carl Daikeler, the co-founder of the Beachbody company, congrats again on the debut. Thanks again for the time.