Obé Co-Founders on Business During Pandemic

us right now, both in New York. Mark, Ashley, Welcome to Bloomberg Radio. Jason and I have been looking forward uh to talking with you. UM. Tell us a little bit about your platform, because we've been talking with a lot of fitness folks about what life has been like during the virus. UM. Mark, you want to kick it off. Yeah, sure, thanks, Thanks Carol, Thanks Jason, and we're glad to be here. UM. At Obey we are a premium fitness platform broadcasting live

and on demand classes seven days a week. UM. We have over four in live classes a day, and we add usually about four new on demand classes UM every single day as well to our library of almost five thousand classes. Um. Everything we do we do with a fun twist. We'd like to call it entertainment. UM. Coming from entertainment and where we met, which was at a big talent agencys c A where we were agents. We love great content, we love great talent, and we love to work out, but we want to have fun um

when we're doing it. So you know, we're big on brand, we're big on design. That's why you'll see um the vibrant, ever changing colors of our set inspired by contemporary artists like James Terrell and Dan Flavin and we and like I said, we want to have fun. Um. We've had on air engagements, on air proposals. We have a bachelor at party next week. Um. We really like to keep afresh. That's so cool. Like think about that, Like you could create a party with people all over the place right

and bring them together. That's really pretty cool. Absolutely, So you know, our trainers really are your your superhero best friend across the screen. And when we worked in the agency business, you know, dealing with the most fabulous, you know, stars on the planet, we always felt that that great fitness talent are secretly some of the greatest stars out there. Right. They're making you feel better. Look, you know, look your best living your best life standing up straight, or as

you walk down the street or take on that next meeting. Um. And we really wanted to give them a platform, so you know, to have them not only train and interact with our members every single day, but to really share their lives too, um through the screen and through the flat.

The platform is really fantastic, all right, So, actually tell us more about some of the content, because I'm fascinated as to how you bring entertainment in you know, I think you guys have done some theme content, uh, including with the new streaming service HBO Max. Talk to us about what that looks like. Absolutely so we um we you know, we produced fourteen live classes a day, seventies a week, and all of those classes are unique and different,

and we have ten different class types. There really is something for everyone. We do a ton of themed progroming. Um. You know, every week you look at our schedule and you'll see you know, different artists and um, different kind different um class types that we've integrated in different ways, whether it's a Jane Fonda themed class, or Richard Simmons or whatever it is. UM the partnership that you spoke

about with HBO Max. They came to us knowing, you know, the wild engagement that we have on our platform UM because they were obviously launching the service, and so we did four bespoke classes for them. There was a Sex in the City class, a game of throwing class, sesame street class because we have kids programming UM and so it was a really fun way to bring bring the community together. One other quick anecdote we just recently had in Vogue on so they are celebrating their thirty years

their tour at Campel because of COVID. So they were on air live with us promoting in from home, doing the class with one of our instructors, connecting and speaking to the instructor or during the class. It was such an amazing way for them to celebrate their years, for our members to to really look back at all of their music and remember all of the incredible work that they made UM and and really just celebrate what is UM. You know, such a fun kind of moment. There's so

many questions I've got for you guys. UM. Actually tell me though, who's your typical demo here, like who who is typically on the platform and how sticky is it? Let Once they're on, they're a lot. You know, they're staying with you, guys, UM forever hopefully. Sure. So the audience is primarily females with fifty four is our sweet spot in terms of engagement or engagement is very very high,

at the best in the category. So on average, our members are taking fourteen classes a month, which when you think about the fact that most Americans don't exercise, that's a staggering number. Our top last month took four or four classes in the months. They're doubling up on both days and you know, forty four classes a month. Yeah, So it has everything to do with incredible content that they're excited about and they're is a very large community effects and feature that we UM that is that is

part of everything that we do. So it's people hearing their name shouted out in class, it's UM connecting uh, you know, digitally after class, it's connecting on Facebook and interests so on and before. But we really keep that community very tight and people get to know each other. We did UM actually the week the weekend before COVID, we had um, you know, a massive retreat in New York City and there were sixtie slots that was sold out in five minutes. People came from most people came, um,

you know, by by air to get there. Um. And but it was like, you know, you walked in not knowing what it was going to, feel like it's the first time we've done and it was it was like a high school reunion. It was most well, was like so excited to see each other. So, guys, I want to talk about the two ps pandemic and Peloton we may, um, So Mark, let's start with the first pandemic. How did

that change? Mean? Actually, you said just before we did some news that pre pandemic, you guys, you know, did this big event with a lot of your users sort of getting together and almost a festival sort of atmosphere. But Mark, the world shuts down. That obviously changes a lot of things. But I would imagine it probably offered some opportunity to how did you take advantage of it? Yeah, definitely, Jason. I think you know, out of the two ps, uh,

you know, the through line is it further proved out? Um, you know, the value in the room for growth in the at home wellness category, you know, with the pandemic. UM, like many businesses, sort of distributing our core workforce overnight while also being deemed an essential service by the New

York State government. UM was was a feat unto itself. UM. You know, we were because you're a media company, right, well, because we're a media company, and we were also providing you know, we were providing a service for everyone at home in the sense that the two peas we have, the three essets we had we had to keep people safe, strong, and sane UM at home, right, So, you know, we

were programming for our normal audience. We were programming. We added kids programming, We added be programming for seniors, UM in front of our paywall, knowing that they would be you know, closed behind uh their four walls as well. So we basically with a whole new protocol, a whole new production protocol UM keeping people really really distant and a pretty skeletal team. We kept producing UM seven days

a week, and our team did a phenomenal job. It goes without saying we were heartbroken and remain heartbroken for our peers, uh, you know in the wellness business who have had to shutter their doors, and we're glad that we were able to not only keep our team employed but also um provide this this outlet in this service

too folks stuck at home across the country. So actually, let's take the other p Peloton, because Jason and I have spent a lot of time with the founder and John Foley of Peloton and talked a lot about their model. We've been at I forget what it was called homecoming, like we did a live broadcast as everybody came in from around the country. Um, right here in New York City before obviously COVID nineteen. You know, what are the models?

What are of fitness models that you admire, that you look to, that you look to kind of embrace and maybe improve upon with obey Sure so we we also, um, you know, have tremendous respect for for what hell Upon has built. It's an incredible company. UM. I think one of the things that we are are you know, just always look too and we see it a lot of uh it's it's different, but we see a lot of similarities.

Certainly are in in the in the strength of the community. UM. I think pelopont is a really good job of fostering that UM, as do we and I think it's why um our engagement is very very high and and at similar levels. UM. Obviously they they are a different products. Obviously they're there are hardware products. UM. We are of the belief that you don't need hardware in order to have a great workout, body weight workouts, you know, workouts that you can do with little or you know, very

very minimal equipment. UM will will set you up and and make you very strong and get a great cardio workout and what have you. So, um car hardware is not in the cards for us. But again, we we have tremendous respect for a Peloton and h I think what they're building is really incredible, but online and Peloton is finding out that they increasingly need to do online, which which kind of opens up their audience even more widely.

I am curious, you know, actually, how many of people that are really kind of on your platform right now that once they kind of get back to normal and we're in a post COVID world, will stay, you know, pretty strongly with that online model. Yeah. So the you know, the COVID cohort of of people who came over it was mostly um, you know, there's a lot of folks who were JIM goers who were going to boutique fitness classes.

I think what we're seeing the longer this goes on is we're going to see you know, really extensive consumer behavior shifts UM. And for a lot of folks who were who were sort of going, you know, doing the old route prior to it was probably because they didn't realize how convenient it could be to workout from home. They didn't realize that they could motivate at home, they didn't realize they could get a great workout at home.

And so I think, you know, given to this as on on for so long, and it's going to continue to go on for so long, it's more time for people to really submit those habits and those behaviors become you know, the new norm. Right. So, Mark Uh, let's talk a little bit about talent, something both of you are very familiar with given your backgrounds, but it also, as you said at the top, is critical in terms of building community, hanging on to customers. How do you

find talent and how do you keep it? Yeah, so you know, we find talent in in all sorts of ways. UM. When we first launched it, was just it was people that we had been working out with in person, UH and people whom we had cultivated great relationships with UH and and now it's it's everything from referrals to tryouts and auditions to UM you know, UH, we'll get calls from casting agents saying, have you have you heard of so and so or so and so, And it's a

process you take it really seriously. UM. We we have a team that works extensively with our talent. UM. We we do media training for our talent. We we have a continuing education program whereby talent can take all their credentials and take it up a notch and maybe learn more about prenatal or or another area of fitness that really speaks to them, or wellness in general, so that they can bring those learnings on air. At the end

of the day, our talent are incredible performers. They're incredible at really formatting a workout, but to be able to do that altogether and really transcend that screen and connect with individuals at home is a special special quality and we really take that seriously. We screened for that, we help cultivate that, and the folks who are on air at at Obey are the absolute best at it. Hey, Mark, what does it all cost? We're a month or for annual membership, so less than the price of a spin

class in New York City limited classes. Yeah, I mean that's That's one of the things and you guys know it as well and better than we do, is that the economics of this has really sort of turned upside down as we've all been at home, and I think people have started, uh to realize candidly what they were spending on a lot of those boutique classes. Yeah, yeah, spending, so I'm sorry, spending from a time perspective and the

money perspective. I think that the commute back and forth that adds up in time time is important and we're realizing how precious each and every minute is. Right, The more accessible everybody is in terms of fitness, that means more people can participate, means hopefully a healthier society, which we know with the virus has proven to be incredibly important. All right, Mark Millette and Ashley Mills. They are the co founders of obey Check it out online.