Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. Well, our next guest count ci
Speaker 1: A Ludlow Ventures, b d M I WWS, Mindy Grossman,
Speaker 1: a friend of our show. Uh, the Skims co founders,
Speaker 1: and many more, some of their investors, Mark Mallette and
Speaker 1: Ashley Mills, their former talent agencies. They co added Obey.
Speaker 1: It's a at home fitness platform offering live and on
Speaker 1: demand workouts, but they've got their own twist to it,
Speaker 1: so I'm looking forward to getting into it. They join
Speaker 1: us right now, both in New York. Mark, Ashley, Welcome
Speaker 1: to Bloomberg Radio. Jason and I have been looking forward
Speaker 1: uh to talking with you. UM. Tell us a little
Speaker 1: bit about your platform, because we've been talking with a
Speaker 1: lot of fitness folks about what life has been like
Speaker 1: during the virus. UM. Mark, you want to kick it off. Yeah, sure, thanks,
Speaker 1: Thanks Carol, Thanks Jason, and we're glad to be here. UM.
Speaker 1: At Obey we are a premium fitness platform broadcasting live
Speaker 1: and on demand classes seven days a week. UM. We
Speaker 1: have over four in live classes a day, and we
Speaker 1: add usually about four new on demand classes UM every
Speaker 1: single day as well to our library of almost five
Speaker 1: thousand classes. Um. Everything we do we do with a
Speaker 1: fun twist. We'd like to call it entertainment. UM. Coming
Speaker 1: from entertainment and where we met, which was at a
Speaker 1: big talent agencys c A where we were agents. We
Speaker 1: love great content, we love great talent, and we love
Speaker 1: to work out, but we want to have fun um
Speaker 1: when we're doing it. So you know, we're big on brand,
Speaker 1: we're big on design. That's why you'll see um the vibrant,
Speaker 1: ever changing colors of our set inspired by contemporary artists
Speaker 1: like James Terrell and Dan Flavin and we and like
Speaker 1: I said, we want to have fun. Um. We've had
Speaker 1: on air engagements, on air proposals. We have a bachelor
Speaker 1: at party next week. Um. We really like to keep afresh.
Speaker 1: That's so cool. Like think about that, Like you could
Speaker 1: create a party with people all over the place right
Speaker 1: and bring them together. That's really pretty cool. Absolutely, So
Speaker 1: you know, our trainers really are your your superhero best
Speaker 1: friend across the screen. And when we worked in the
Speaker 1: agency business, you know, dealing with the most fabulous, you know,
Speaker 1: stars on the planet, we always felt that that great
Speaker 1: fitness talent are secretly some of the greatest stars out there. Right.
Speaker 1: They're making you feel better. Look, you know, look your
Speaker 1: best living your best life standing up straight, or as
Speaker 1: you walk down the street or take on that next meeting. Um.
Speaker 1: And we really wanted to give them a platform, so
Speaker 1: you know, to have them not only train and interact
Speaker 1: with our members every single day, but to really share
Speaker 1: their lives too, um through the screen and through the flat.
Speaker 1: The platform is really fantastic, all right, So, actually tell
Speaker 1: us more about some of the content, because I'm fascinated
Speaker 1: as to how you bring entertainment in you know, I
Speaker 1: think you guys have done some theme content, uh, including
Speaker 1: with the new streaming service HBO Max. Talk to us
Speaker 1: about what that looks like. Absolutely so we um we
Speaker 1: you know, we produced fourteen live classes a day, seventies
Speaker 1: a week, and all of those classes are unique and different,
Speaker 1: and we have ten different class types. There really is
Speaker 1: something for everyone. We do a ton of themed progroming. Um.
Speaker 1: You know, every week you look at our schedule and
Speaker 1: you'll see you know, different artists and um, different kind
Speaker 1: different um class types that we've integrated in different ways,
Speaker 1: whether it's a Jane Fonda themed class, or Richard Simmons
Speaker 1: or whatever it is. UM the partnership that you spoke
Speaker 1: about with HBO Max. They came to us knowing, you know,
Speaker 1: the wild engagement that we have on our platform UM
Speaker 1: because they were obviously launching the service, and so we
Speaker 1: did four bespoke classes for them. There was a Sex
Speaker 1: in the City class, a game of throwing class, sesame
Speaker 1: street class because we have kids programming UM and so
Speaker 1: it was a really fun way to bring bring the
Speaker 1: community together. One other quick anecdote we just recently had
Speaker 1: in Vogue on so they are celebrating their thirty years
Speaker 1: their tour at Campel because of COVID. So they were
Speaker 1: on air live with us promoting in from home, doing
Speaker 1: the class with one of our instructors, connecting and speaking
Speaker 1: to the instructor or during the class. It was such
Speaker 1: an amazing way for them to celebrate their years, for
Speaker 1: our members to to really look back at all of
Speaker 1: their music and remember all of the incredible work that
Speaker 1: they made UM and and really just celebrate what is UM.
Speaker 1: You know, such a fun kind of moment. There's so
Speaker 1: many questions I've got for you guys. UM. Actually tell
Speaker 1: me though, who's your typical demo here, like who who
Speaker 1: is typically on the platform and how sticky is it?
Speaker 1: Let Once they're on, they're a lot. You know, they're
Speaker 1: staying with you, guys, UM forever hopefully. Sure. So the
Speaker 1: audience is primarily females with fifty four is our sweet
Speaker 1: spot in terms of engagement or engagement is very very high,
Speaker 1: at the best in the category. So on average, our
Speaker 1: members are taking fourteen classes a month, which when you
Speaker 1: think about the fact that most Americans don't exercise, that's
Speaker 1: a staggering number. Our top last month took four or
Speaker 1: four classes in the months. They're doubling up on both
Speaker 1: days and you know, forty four classes a month. Yeah,
Speaker 1: So it has everything to do with incredible content that
Speaker 1: they're excited about and they're is a very large community
Speaker 1: effects and feature that we UM that is that is
Speaker 1: part of everything that we do. So it's people hearing
Speaker 1: their name shouted out in class, it's UM connecting uh,
Speaker 1: you know, digitally after class, it's connecting on Facebook and
Speaker 1: interests so on and before. But we really keep that
Speaker 1: community very tight and people get to know each other.
Speaker 1: We did UM actually the week the weekend before COVID,
Speaker 1: we had um, you know, a massive retreat in New
Speaker 1: York City and there were sixtie slots that was sold
Speaker 1: out in five minutes. People came from most people came, um,
Speaker 1: you know, by by air to get there. Um. And
Speaker 1: but it was like, you know, you walked in not
Speaker 1: knowing what it was going to, feel like it's the
Speaker 1: first time we've done and it was it was like
Speaker 1: a high school reunion. It was most well, was like
Speaker 1: so excited to see each other. So, guys, I want
Speaker 1: to talk about the two ps pandemic and Peloton we may, um,
Speaker 1: So Mark, let's start with the first pandemic. How did
Speaker 1: that change? Mean? Actually, you said just before we did
Speaker 1: some news that pre pandemic, you guys, you know, did
Speaker 1: this big event with a lot of your users sort
Speaker 1: of getting together and almost a festival sort of atmosphere.
Speaker 1: But Mark, the world shuts down. That obviously changes a
Speaker 1: lot of things. But I would imagine it probably offered
Speaker 1: some opportunity to how did you take advantage of it? Yeah, definitely, Jason.
Speaker 1: I think you know, out of the two ps, uh,
Speaker 1: you know, the through line is it further proved out? Um,
Speaker 1: you know, the value in the room for growth in
Speaker 1: the at home wellness category, you know, with the pandemic. UM,
Speaker 1: like many businesses, sort of distributing our core workforce overnight
Speaker 1: while also being deemed an essential service by the New
Speaker 1: York State government. UM was was a feat unto itself. UM.
Speaker 1: You know, we were because you're a media company, right, well,
Speaker 1: because we're a media company, and we were also providing
Speaker 1: you know, we were providing a service for everyone at
Speaker 1: home in the sense that the two peas we have,
Speaker 1: the three essets we had we had to keep people safe, strong,
Speaker 1: and sane UM at home, right, So, you know, we
Speaker 1: were programming for our normal audience. We were programming. We
Speaker 1: added kids programming, We added be programming for seniors, UM
Speaker 1: in front of our paywall, knowing that they would be
Speaker 1: you know, closed behind uh their four walls as well.
Speaker 1: So we basically with a whole new protocol, a whole
Speaker 1: new production protocol UM keeping people really really distant and
Speaker 1: a pretty skeletal team. We kept producing UM seven days
Speaker 1: a week, and our team did a phenomenal job. It
Speaker 1: goes without saying we were heartbroken and remain heartbroken for
Speaker 1: our peers, uh, you know in the wellness business who
Speaker 1: have had to shutter their doors, and we're glad that
Speaker 1: we were able to not only keep our team employed
Speaker 1: but also um provide this this outlet in this service
Speaker 1: too folks stuck at home across the country. So actually,
Speaker 1: let's take the other p Peloton, because Jason and I
Speaker 1: have spent a lot of time with the founder and
Speaker 1: John Foley of Peloton and talked a lot about their model.
Speaker 1: We've been at I forget what it was called homecoming,
Speaker 1: like we did a live broadcast as everybody came in
Speaker 1: from around the country. Um, right here in New York
Speaker 1: City before obviously COVID nineteen. You know, what are the models?
Speaker 1: What are of fitness models that you admire, that you
Speaker 1: look to, that you look to kind of embrace and
Speaker 1: maybe improve upon with obey Sure so we we also, um,
Speaker 1: you know, have tremendous respect for for what hell Upon
Speaker 1: has built. It's an incredible company. UM. I think one
Speaker 1: of the things that we are are you know, just
Speaker 1: always look too and we see it a lot of
Speaker 1: uh it's it's different, but we see a lot of similarities.
Speaker 1: Certainly are in in the in the strength of the community. UM.
Speaker 1: I think pelopont is a really good job of fostering
Speaker 1: that UM, as do we and I think it's why
Speaker 1: um our engagement is very very high and and at
Speaker 1: similar levels. UM. Obviously they they are a different products.
Speaker 1: Obviously they're there are hardware products. UM. We are of
Speaker 1: the belief that you don't need hardware in order to
Speaker 1: have a great workout, body weight workouts, you know, workouts
Speaker 1: that you can do with little or you know, very
Speaker 1: very minimal equipment. UM will will set you up and
Speaker 1: and make you very strong and get a great cardio
Speaker 1: workout and what have you. So, um car hardware is
Speaker 1: not in the cards for us. But again, we we
Speaker 1: have tremendous respect for a Peloton and h I think
Speaker 1: what they're building is really incredible, but online and Peloton
Speaker 1: is finding out that they increasingly need to do online,
Speaker 1: which which kind of opens up their audience even more widely.
Speaker 1: I am curious, you know, actually, how many of people
Speaker 1: that are really kind of on your platform right now
Speaker 1: that once they kind of get back to normal and
Speaker 1: we're in a post COVID world, will stay, you know,
Speaker 1: pretty strongly with that online model. Yeah. So the you know,
Speaker 1: the COVID cohort of of people who came over it
Speaker 1: was mostly um, you know, there's a lot of folks
Speaker 1: who were JIM goers who were going to boutique fitness classes.
Speaker 1: I think what we're seeing the longer this goes on
Speaker 1: is we're going to see you know, really extensive consumer
Speaker 1: behavior shifts UM. And for a lot of folks who
Speaker 1: were who were sort of going, you know, doing the
Speaker 1: old route prior to it was probably because they didn't
Speaker 1: realize how convenient it could be to workout from home.
Speaker 1: They didn't realize that they could motivate at home, they
Speaker 1: didn't realize they could get a great workout at home.
Speaker 1: And so I think, you know, given to this as
Speaker 1: on on for so long, and it's going to continue
Speaker 1: to go on for so long, it's more time for
Speaker 1: people to really submit those habits and those behaviors become
Speaker 1: you know, the new norm. Right. So, Mark Uh, let's
Speaker 1: talk a little bit about talent, something both of you
Speaker 1: are very familiar with given your backgrounds, but it also,
Speaker 1: as you said at the top, is critical in terms
Speaker 1: of building community, hanging on to customers. How do you
Speaker 1: find talent and how do you keep it? Yeah, so
Speaker 1: you know, we find talent in in all sorts of ways. UM.
Speaker 1: When we first launched it, was just it was people
Speaker 1: that we had been working out with in person, UH
Speaker 1: and people whom we had cultivated great relationships with UH
Speaker 1: and and now it's it's everything from referrals to tryouts
Speaker 1: and auditions to UM you know, UH, we'll get calls
Speaker 1: from casting agents saying, have you have you heard of
Speaker 1: so and so or so and so, And it's a
Speaker 1: process you take it really seriously. UM. We we have
Speaker 1: a team that works extensively with our talent. UM. We
Speaker 1: we do media training for our talent. We we have
Speaker 1: a continuing education program whereby talent can take all their
Speaker 1: credentials and take it up a notch and maybe learn
Speaker 1: more about prenatal or or another area of fitness that
Speaker 1: really speaks to them, or wellness in general, so that
Speaker 1: they can bring those learnings on air. At the end
Speaker 1: of the day, our talent are incredible performers. They're incredible
Speaker 1: at really formatting a workout, but to be able to
Speaker 1: do that altogether and really transcend that screen and connect
Speaker 1: with individuals at home is a special special quality and
Speaker 1: we really take that seriously. We screened for that, we
Speaker 1: help cultivate that, and the folks who are on air
Speaker 1: at at Obey are the absolute best at it. Hey, Mark,
Speaker 1: what does it all cost? We're a month or for
Speaker 1: annual membership, so less than the price of a spin
Speaker 1: class in New York City limited classes. Yeah, I mean
Speaker 1: that's That's one of the things and you guys know
Speaker 1: it as well and better than we do, is that
Speaker 1: the economics of this has really sort of turned upside
Speaker 1: down as we've all been at home, and I think
Speaker 1: people have started, uh to realize candidly what they were
Speaker 1: spending on a lot of those boutique classes. Yeah, yeah, spending,
Speaker 1: so I'm sorry, spending from a time perspective and the
Speaker 1: money perspective. I think that the commute back and forth
Speaker 1: that adds up in time time is important and we're
Speaker 1: realizing how precious each and every minute is. Right, The
Speaker 1: more accessible everybody is in terms of fitness, that means
Speaker 1: more people can participate, means hopefully a healthier society, which
Speaker 1: we know with the virus has proven to be incredibly important.
Speaker 1: All right, Mark Millette and Ashley Mills. They are the
Speaker 1: co founders of obey Check it out online.