Sep 16, 2021 - Economy

Workout economy hangs fate on celeb trainers

Illustration of a treadmill belt extending from the machine into a long red carpet

Illustration: Annelise Capossela/Axios

At-home workout companies are turning fitness instructors into stars.

What's new: Tonal, which makes a wall-mounted, strength training device, said its machines will start streaming live classes in October. 

  • Tonal CEO Aly Orady also tells Axios that the company plans to open a studio in New York City.
  • “More sound stages equal more capacity," he says. "In going live, we need more time zones and can [also] tap a whole new market of coaches."

What's happening: Instructors play a key role in user engagement, which ultimately drives better margins.

  • For example: Peloton products had a 12% gross margin in its fiscal fourth quarter, compared with a 63% gross margin for subscription.

Who's who: Peloton's Cody Rigsby ascended to instructor fame amid the pandemic, and he just landed a spot on "Dancing with the Stars."

The big picture: Whether it's connected bikes, mirrors or weight systems, delivering classes through at-home workout equipment comes with the potential of reaching many more people than traditional studio classes.

The intrigue: While Peloton doesn't disclose what it pays instructors, CEO John Foley has acknowledged to Axios' Dan Primack that it's significantly more than they'd be making by teaching smaller, in-person classes.

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