Advertisement
U.S. markets open in 6 hours 54 minutes
  • S&P Futures

    5,208.25
    -6.50 (-0.12%)
     
  • Dow Futures

    39,212.00
    -11.00 (-0.03%)
     
  • Nasdaq Futures

    18,184.25
    -47.25 (-0.26%)
     
  • Russell 2000 Futures

    2,048.30
    -1.50 (-0.07%)
     
  • Crude Oil

    82.55
    -0.17 (-0.21%)
     
  • Gold

    2,159.00
    -5.30 (-0.24%)
     
  • Silver

    25.13
    -0.14 (-0.53%)
     
  • EUR/USD

    1.0870
    -0.0007 (-0.07%)
     
  • 10-Yr Bond

    4.3400
    0.0000 (0.00%)
     
  • Vix

    14.33
    -0.08 (-0.56%)
     
  • GBP/USD

    1.2708
    -0.0021 (-0.16%)
     
  • USD/JPY

    150.4150
    +1.3170 (+0.88%)
     
  • Bitcoin USD

    64,965.46
    -3,453.32 (-5.05%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,722.55
    -4.87 (-0.06%)
     
  • Nikkei 225

    40,003.60
    +263.20 (+0.66%)
     

'We have seen a huge uptick in subscribers' says Obé Fitness co-founder

Obé fitness Co-Founder & Co-CEO Mark Mullett joined Yahoo Finance's Myles Udland, Akiko Fujita, Jen Rogers, and Andy Serwer to discuss the booming business of at-home fitness amid the coronavirus crisis.

Video Transcript

MYLES UDLAND: While we're all stuck at home trying to do our best, get this show out the door, of course, people are still trying to stay active. Mark Mullett is the co-founder and co-CEO of Obe, which, Mark, you guys were already in the streaming class space. And now, we've seen that trend really accelerate. I guess just kind of outline for us where you guys were maybe 3, 4, 5 months ago and where your service is now and how things have transitioned, as we've all tried to adjust to this new life.

MARK MULLETT: Absolutely. So at Obe, we broadcast premium live and on-demand fitness classes seven days a week. We've been doing it for two years with a focus on all levels, all modality. All you need is really a screen, tiny bit of space, and maybe some light hand weights or resistance bands, right? So low barrier to entry.

We've been delivering a really premium experience in people's living rooms every day. With COVID, people are stuck at home. And they're realizing that if they used to go to a gym, or they used to go to a studio fitness routine that they need to turn their living room into their agenda to their fitness oasis. So we have seen a huge uptick in subscribers.

AKIKO FUJITA: So Mark, you were out in front in terms of offering these services. But what I found is since we've all been in lockdown, a lot of these gyms have turned to social media. They are streaming their classes. They're getting huge numbers in those streams. Does that create more competition for you on the other side?

MARK MULLETT: Yeah, you know, perhaps. What I would say is folks at home who are working out are looking for a premium experience. My business partner and I come from the world of entertainment. We were talent agents at a big agency. We come from, you know, production content, great talent. And what we focus on [INAUDIBLE] is delivering a very premium experience, from the talent to how it's executed to how it's shot to how we call names out in class.

While it's exciting to see so many people sort of taking at-home fitness into their own hands through Instagram live or through other streaming platforms, unfortunately, I would not call that premium. And I do think that the viewer at home, if they're paying for a daily experience, they want it to be of a certain caliber.

ANDY SERWER: Hey, Mark, you work at both WAME and CAA.

MARK MULLETT: That's correct.

ANDY SERWER: So yeah, you were really into it. So let me ask you about this online, offline world and the fact that so many people, of course, are signing up right now because of their situation. And some people are saying, oh, they're never going to go back to gyms, because they're going to use services like yours. And they'll be happy. Have you modeled out, you know, how many people you think will stick and how many people will go back to Equinox?

MARK MULLETT: Yeah, first and foremost, I'm heartbroken. My business partner, Ashley, we're heartbroken for any of our peers and colleagues who work in sort of traditional brick and mortar fitness and watching their businesses change so drastically overnight. It's deeply upsetting to us.

As far as modeling it out, what we can tell you is the influx of new people discovering their own homes, their studio apartments, their basements, their garages as a fully fledged ecosystem for wellness has been exciting for us. It's something we've known all along. But as far as modeling it out you, we are seeing, not only a huge, huge uptick in free trials, but we are seeing people convert into the paid service.

I'll tell you one of the things that we're really proud of as a company is that conversion rate. We deliver a great experience seven days a week. And so people do convert paying customers at a very high rate.

MYLES UDLAND: And then, Mark, finally, as you guys looked at your business a couple of months ago-- and, again, I hate to harp on this before and after time-- but did you have plans that you were looking at for 2020, 2021 that you've now either accelerated or shelved or kind of seeing your business going in a different direction than you expected just because of the influx of customers you've seen? And maybe some of the classes, you know, that are growing more popular now that hadn't been popular in the past, are you thinking differently about your business now than you were just a few months ago?

MARK MULLETT: Yeah, you know, we, for the most part, we stay our course, right? Our goal is to make sure that every day is different and special for our community. As far as a modeling perspective, I would say acceleration's been-- it's a bit of an understatement. We've been laying traps for the past two years with our offering and how we iterate every day on what we do.

And this unfortunate situation has allowed us to reach more people in more homes in doing that. So to that end, on the more people, and we created programming for kids, for seniors, for partners who are together at home and or looking for a wellness experience together, again, we want to make sure that we're providing daily movement for the whole family.

So whether it's PE class for a newly minted homeschool moms and dads or seniors who need to get movement but really need to be stability conscious, really need to be conscious of every move and alignment, we've created classes for everyone all levels. Again, very little to no equipment needed.

JENNIFER ROGERS: Peloton and the Mirror have really capitalized. All of that's probably the wrong word on what's happening here on social media or just when you're in a Zoom with somebody saying, oh, let's jump on a class together. But they have expensive equipment. You don't have that. But maybe the expensive equipment makes you go and do the workouts more. Do you think that you'll get into the equipment business ever?

MARK MULLETT: You know, as of now, we sell-- we sell sort of light equipment. But, again, we didn't want to be in a business where there was a barrier to entry based on pricey equipment on-- and with all due respect to the two companies you mentioned, great companies. Again, it's our attitude has been if you have a screen, which we all do, whether it's a tablet or an iPhone or a smart TV, laptop, you can get a great, really fun, really interactive and dynamic work out.

So I don't see us being in the pricey equipment business by any means. But we will continue to iterate on the modalities and on the class types that we offer, which we do monthly anyways. We're always offering new class types, new theme classes, new instructors, really keeping it fresh so that our audience can get fit and not bored.

MYLES UDLAND: All right, Mark Mullett is the co-founder and CEO of Obe. Thanks for joining the program.

MARK MULLETT: Thank you.

Advertisement