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Beachbody: Thinking Beyond the Infomercial

By Esmé E. Deprez
     Nov. 18 (Bloomberg BusinessWeek) -- Tony Horton has trained
senators, soldiers, and celebrities such as Bruce Springsteen and
Billy Idol. In the past three weeks, the latter-day Jack LaLanne
has been to six states to promote his grueling in-home fitness
program, P90X. Soon, Horton is off to Japan and France for
training sessions, his first book will be published in December,
and he's shopping around a reality TV show. "The first five
months of the year I slept in my own bed only 50 times," Horton
says. "It's pretty crazy."
     P90X, flogged countless times daily on cable TV, is an
anomaly in direct marketing. Most of the pills and potions seen
on infomercials seem to offer physical perfection with little
effort. Horton, by contrast, has persuaded 3 million people to
pay $140 for his 12-DVD program by promising three months of pain
and perspiration in a routine that combines resistance training,
yoga, boxing, weight lifting, and a strict diet.
     At age 52, 5 feet, 11 inches, and 175 pounds, Horton can do
35 pull-ups, 100 push-ups, and climb a 25-foot rope upside down
while barely breaking a sweat. In the videos, Horton combines the
discipline of a drill sergeant with a touch of humor left over
from a youthful flirtation with stand-up comedy. What Horton
calls muscle confusion—a series of varied workouts targeting
different muscle groups at different times—seems to work.
Initially, "I would do the leg workout and wouldn't be able to
walk the next two days," says Liz Beebe, a 29-year-old actress
from Los Angeles. "But once you start, you get hooked."
     Now that it has built a loyal customer base, Beachbody, the
Santa Monica (Calif.) company that sells P90X, knows it needs to
figure out what's next. It has sold $420 million worth of P90X
DVDs since they were introduced in 2005, and buyers of the
program will drive nearly half of Beachbody's $430 million in
revenue this year. Problem is, P90X sales growth has slowed in
recent years, from 85 percent in 2008 to about 30 percent this
year. "Fitness is very much like fashion," says Carl Daikeler,
chief executive officer of Beachbody. "The important thing is
that the company continue to learn from the marketplace."
     One thing Beachbody has learned is that P90X isn't for
everyone. So the company is introducing programs for the elderly,
teens, and the religious (Body Gospel, a program set to church
music). Next year, Horton will star in a revision of a less
intense P90X variant called Power90, as well as a tougher version
for die-hard fitness nuts. And Beachbody has created
Spanish-language P90X videos, something it plans to do for its
entire product line.
     The company is also stepping up a direct-sales initiative
called Team Beachbody in which people market products to friends
and get a share of the revenues (and a piece of commissions
earned by other salespeople they recruit). The plan is paying
off: Shakeology, a meal-replacement drink sold only by direct
sales, is Beachbody's fastest-growing product.
     Daikeler expects Team Beachbody revenue to reach $200
million in 2011, up from $35 million last year. "Long term, more
people are likely to buy from friends and family members who got
results vs. people who are going to buy from an infomercial," he
says. Half of P90X buyers have never even seen a commercial for
the DVDs, he says.
     Finally, Beachbody is trying to broaden its appeal. The
company's website sells P90X drinks, protein supplements, chin-up
bars, and other spin-offs. "If you look at direct marketing folks
that aren't on television anymore," Horton says, "what they
didn't do is work on building their brand."
      The bottom line: After racking up $420 million in sales of
P90X DVDs, Beachbody is seeking to reduce its dependence on the
smash-hit fitness program.

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