The Beachbody Company

The Beachbody Company is a privately-held American fitness and media company based Santa Monica, California. It operates the brands Beachbody On Demand, Team Beachbody and Openfit. The company also sells "superfoods" and other dietary supplements such as Shakeology and Beachbar[1] through direct response infomercials[2] and multi-level marketing via independent Team Beachbody "coaches" who serve as sales consultants.[3]

The Beachbody Company
TypePrivate
Industry
FoundedSanta Monica, California (1998 (1998))
FoundersCarl Daikeler
Jon Congdon
Headquarters
Santa Monica, California
,
United States
Area served
U.S., Canada, U.K., France
Brands
  • Beachbody On Demand
  • Team Beachbody
  • Openfit
Websitethebeachbodycompany.com

In 2015, it released a 'Netflix for fitness' streaming service of all exercise workout DVDs known as Beachbody On Demand. The service has reported 2 million subscribers and received more than half a million new subscribers during the first 3 months of the COVID-19 pandemic.[4][5] In 2019, the company introduced a nutrition programming and tracking app with live workouts called Openfit.[6]

History

The company was founded in 1998 by Carl Daikeler and Jon Congdon in Santa Monica, California.[7] Daikeler was previously in informercials for Lifeline Gym and :08 Min Abs in the 1990s. The founders received $500,000 in angel investing, developed a series of workout videos and bought the website Beachbody.com.[2][8]

In 2005, P90X, or Power 90 Extreme, was created by Tony Horton as a commercial home exercise regimen and developed as a successor to the program called "Power 90". It consists of a training program that uses cross-training and periodization, combined with a nutrition and dietary supplement plan.[9] It was heavily marketed through infomercials and celebrity endorsements.[10] In 2007, customers began selling workout DVDs.[2]

Controversy

Between June and November 2017, advertising watchdog organization Truth in Advertising found that Beachbody distributors were making false and unsubstantiated income claims to promote the company’s business opportunity.[11] The FTC has stated that 99.6% of all MLM participants will lose money, after factoring in the costs to join.[12]

In 2017, Beachbody agreed to pay $3.6 million to settle a lawsuit from the city of Santa Monica over automatic credit card renewals. It was alleged that Beachbody was charging its customers’ credit cards on an automatic, recurring basis without the required written consent of those customers.[13]

Divisions

Team Beachbody

Team Beachbody encourages members of the general public to enroll as "coaches". These customers-turned-salespeople register online as a "coach" and sell fitness packages using Beachbody products and programs including workout DVDs, food supplements and meal plans and in turn earning up to 25% commission[14] for each sale.[15] Carl Daikeler, a co-founder described coaches as serving as "walking billboards and salespeople who want to help their family and friends..."[3] and that the "average lifespan" of a coach is three months. In 2013, CNN reported that within two years of Team Beachbody's launch, sales of the parent company's products rose more than 60%.[16]

An article by Michelle Ruiz for Cosmopolitan's website in 2015 reports that the "pyramid setup" garners criticism from some who call Team BeachBody a "scheme" and that anyone can register online as a coach. The article also quotes Marion Nestle PhD, a professor of nutrition and food studies at New York University, as saying "It never ceases to amaze me that anyone would fall for anything like this. ... It's about making money."[15]

An article in The Philadelphia Inquirer by Anna Orso in 2018 profiles Team Beachbody coaches and reports that coaches earned an average of $2,600 per year (not accounting for expenses) and that more than half of all coaches earn nothing. The company claimed that their pyramid-like sales structure is not an illegal pyramid scheme.[14][17]

Shakelogy is a dietary supplement that is sold by Team Beachbody. It was formulated by Darin Olien, who also co-created the company's plant-based Ultimate Reset 21-day detox programme.[18]

Beachbody On Demand
Beachbody On Demand
TypeFitness
Launch date2015 (2015)
StatusActive
Members 2 million (as of April 29, 2020)
Websitewww.beachbodyondemand.com

The company introduced a video on demand streaming subscription service known as Beachbody On Demand in 2015 with a library of at-home workouts from programs such as Insanity and P90X.[4] According to the CEO, the company's board was hesitant to offer all of its workout DVDs for a single subscription rate.[2]

Its programs include Morning Meltdown 100, 80 Day Obsession, LIIFT4, 21 Day Fix and Insanity.[19][7]

Due to lockdowns associated with the COVID-19 pandemic, Beachbody On Demand experienced growth of more than 300 percent in new subscribers, passing 2 million overall by April 2020.[20] The company announced that it would stream free classes for children on Vimeo during the pandemic.[21]

Openfit

In 2018, Congdon co-founded a personalized nutrition programming and tracking app with "FaceTime for fitness" live group classes called Openfit.[6] The company acquired LeBron James and Arnold Schwarzenegger's Ladder, which develops nutritional products to help athletes with severe cramping after James had issues in the 2014 NBA Finals. The terms of the deal were not disclosed, James and Schwarzenegger remained minority stakeholders.[22]

References
  1. Day, Hannah; Jones, as told to Alexis (November 5, 2019). "At 237 Lbs., I Was Embarrassed To Go To The Gym. So I Did An At-Home BeachBody Program—And Lost 117 Lbs". Women's Health. Retrieved January 8, 2021.
  2. Debter, Lauren (April 10, 2018). "Inside Beachbody's Billion-Dollar Fat Burning Empire". Forbes.
  3. Rovell, Darren (January 31, 2011). "Beachbody Grows Exponentially Thanks To Network Marketing". CNBC. Archived from the original on October 13, 2012. Retrieved April 1, 2012.
  4. Smith, Rob. "Beachbody CEO: file sharing and piracy 'costs us millions'". finance.yahoo.com. Retrieved January 8, 2021.
  5. "Fitness streaming businesses surge amid the pandemic". CNBC. February 6, 2021. Retrieved February 7, 2021.
  6. Ellingson, Annlee (November 7, 2019). "Openfit launches 'FaceTime for fitness' with live workout coaching". www.bizjournals.com. Retrieved February 7, 2021.
  7. Diana Olick, CNBC. "Get really fit by hitting the basement." May 27, 2016. Retrieved Sep 5, 2018.
  8. Noto, Anthony (May 5, 2017). "BeachBody CEO discusses journey from '8-Minute Abs' to creating the 'Netflix for fitness'". www.bizjournals.com. Retrieved February 7, 2021.
  9. "What is the P90X workout? Rep. Paul Ryan credits Tony Horton fitness routine for keeping in shape". NY Daily News. August 15, 2012. Retrieved August 15, 2014.
  10. Townsend, Matt (September 7, 2012). "Ripple Effect: Beachbody LLC flexing its muscles following success of P90X program". Chicago Tribune.
  11. TINA (December 18, 2017). "TEAM BEACHBODY INCOME CLAIMS DATABASE". Truth in Advertising. Retrieved September 15, 2020.
  12. Jon M. Taylor, MBA, Ph.D. "Appendix 7E: MLM Profit and loss rates vs. various income options" (PDF). FTC. Retrieved September 15, 2020.CS1 maint: multiple names: authors list (link)
  13. Howard Fine (August 29, 2017). "Beachbody Agrees to Pay $3.6 Million to Settle Case Over Automatic Credit Card Renewals". Los Angeles Business Journal. Retrieved September 15, 2020.
  14. Orso, Anna (May 21, 2018). "Behind those before-and-after Instagram photos: Money, marketing and meal replacements". The Philadelphia Inquirer.
  15. Michelle Ruiz (July 22, 2015). "This Cultish Workout Is All Over Your Social Media Feeds — But Is It Legit?". cosmopolitan.com.
  16. Hicken, Melanie (January 9, 2013). "The money behind Herbalife, Mary Kay and others". CNNMoney.
  17. "Statement of Independent Coach Earnings December 29, 2016 – December 27, 2017 1" (PDF). Beachbody.com. Retrieved March 5, 2019.
  18. Rainbow, Sophie (July 14, 2020). "Who is Darin Olien? Meet the author and Zac Efron's pal". www.standard.co.uk. Retrieved February 7, 2021.
  19. Malik, Naureen S (March 24, 2020). "Almost Overnight, the $100 Billion Fitness Industry Goes Virtual". Bloomberg.com. Retrieved January 8, 2021.
  20. Haithman, Diane (May 18, 2020). "Beachbody Sees Gains". labusinessjournal.com. Los Angeles Business Journal. Retrieved February 7, 2021.
  21. "Coronavirus quarantines causing home fitness programs to skyrocket". Fox Business. Retrieved February 7, 2021.
  22. Young, Jabari (December 2, 2020). "LeBron James, Arnold Schwarzenegger's Sports Nutrition Company Sells to Fitness Platform Openfit". NBC Los Angeles. Retrieved February 7, 2021.
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