By
Viewed
203,642
Please choose the correct answer for each question below:
Questions: 0/710
Correct: 0
Translate:
This is Barry's Boot Camp, one of the
many luxury fitness studios where people
willingly pay $40 to be yelled at in a
dark room for an hour. And yet, I am
here multiple times a week along with
millions of other people who have made
these boutique fitness classes a
non-negotiable part of their routines.
But these studios are so much more than
overpriced exercise. They are carefully
crafted experiences that have completely
transformed the fitness industry. While
a basic gym membership might cost you as
little as $10 a month to $30 to $50 a
month, fitness studios like SoulCycle,
Berries, and Solid Core might charge you
that much or more for a single class.
The question is why? What is the
business strategy that transformed basic
exercise into a luxurious experience
that so many urban yepies can't seem to
live without? I have spent years both
observing and heavily participating in
this industry. And today we're
investigating how luxury fitness studios
created a business model that is part
highintensity exercise, part status
symbol, and part psychological master
stroke that keeps people coming back.
And just why for many people, it is
absolutely worth
[Music]
it. I'll stop doing the pointing thing.
All right. As always, before we dive
into the business model and the
psychology behind premium fitness, do I
look like I'm here to mess around? Now,
let me give you an idea of what it's
actually like to take one of these
luxury fitness classes. And we'll focus
mainly on berries for this because it's
my favorite. You walk in and check in
with one of the usually chipper and
smiling folks at the front desk. And
then they'll tell you what spot you have
inside the class. From there, you go
back to the locker room where you put
your stuff away, change into workout
clothes, and I'll show you some of the
amenities in those locker rooms after
the workout. And then it's showtime.
Various classes are famous for their
dark rooms and red lighting. They're
actually called the red room. lasting
music and of course high-end equipment.
That's right. Each and every one of the
treadmills inside a Barry's class are
$15,000 a pop. They're the nice woodway
treadmills, which are indeed
top-of-the-line. I checked. Each class
is 50 minutes and four rounds,
alternating between the treadmill and
the floor for strength training. And
what's the workout actually like? It's
freaking hard. It's widely regarded as
the hardest workout of all. It is
highintensity interval training at its
best. But of course, you can go as a
beginner and just run a little bit
slower than what the instructor suggests
or lift slightly lighter weights and
then you just work up to it. That's what
I did. But yeah, I personally come out
of each and every berries class drenched
in sweat. Now, while I focus on berries,
each studio has its own unique
atmosphere. SoulCycle creates this
almost spiritual experience with candle
lit rooms and instructors who double as
motivational speakers. Solid core on the
other hand is all about that slow burn
muscle failure in a cool lit blue
environment. What they all share though
is attention to every sensory detail.
And I personally come out of each and
every one drenched in sweat. Maybe I'm
just a sweater. I don't know. And the
instructors, they're all really, really
great. Extremely fit as you might
imagine. Like one of the instructors
that I go to in LA literally looks like
a human G.I. Joe. and their motivational
coaching approach hits just the right
spot for me at fairies where they're not
mean to you like run faster you piece of
but they're also not shouting like
cringy fluffy affirmations. It's
somewhere right in between where I feel
properly hyped up. Then once it's time
to shower off all that sweat, you go
back into the locker rooms where you
have cotton towels, high-end products
like whey hair and body
products. It used to be Orbe which is
even fancier but that's okay. Dyson
haird dryers which are $500 a pop and
then you know some other basic personal
products and toiletries. The amenities
do differ a bit between studio like
solid core doesn't even have showers.
I'm like girl that's half the reason I
go to berries. Just kidding kind of. And
then finally there is the fuel bar. So
after the sweaty workout you can have
one of these smoothies waiting for you
which is packed with high-end
supplements and protein powders. They
use Promix products for their smoothies
which as with all these other things are
coming in at a high price. Smoothies are
not included in the class price, but
it's a nice option to have right there
after you finish working out. And
there's also some retail in every
studio. So, while that might have
sounded like an ad for berries, it
wasn't. I wish. It's just an inside look
into how you're not just paying for a
hardass workout. You're also paying for
this overall highquality luxury
experience where everything in there is
the highest quality version of that
thing. And you walk out of there feeling
like a million bucks. Tired, yes, but
satisfied and nicely lotioned up. Okay,
so that's what the experience is like.
But even still, it's not quite as simple
as, "Oh, it's a high-end experience.
That makes sense." There's still the
question of why do people who attend
these boutique fitness classes multiple
times a week, not just pay for a gym
membership, an expensive gym membership,
even like Equinox, which also offers
classes and luxury amenities. To better
answer this question, let's look at the
evolution of the fitness industry and
where boutique fitness group workout
classes fit into all of this. So,
beginning with the traditional gym of
pre-200s, they used to be a lot more
bare bones with a much larger focus on
weightlifting and cardio machines and
pretty much no focus on group fitness
classes. And the business model of
traditional gyms surprised me a bit when
I was doing my research for this video.
You see, traditional gyms that are low
cost and high volume of members actually
count on most paying members not showing
up to turn a profit. Planet Fitness at
$10 a month with all that overhead cost,
are you kidding me? It only works
because most paying members do not
regularly attend. In fact, Planet
Fitness has openly acknowledged their
dependence on low attendance rates. In
the early 2000s, some gyms started to
add group fitness classes to experiment
and try to differentiate themselves.
This marked a major transition point as
members who went to the gym started to
enjoy the social and community aspects
and not just the solo workouts. And gyms
quickly noticed that members who
attended group workout classes were much
more likely to renew their memberships.
But when did $40 classes as we know them
today come into play? Well, noticing
this trend of group fitness, boutique
fitness classes started to pop up here
and there in the 2010s. And Barry's was
actually ahead of the curve. So, the
founder, Barry J, was a front desk
employee at a gym, he created his own
group class format that became so
popular the gym eventually let him start
his own studio. Fast forward and Barry's
boot camp, as it was originally called,
is founded in 1998 in West Hollywood,
Los Angeles, California. I say with
pride as an LA native, the boom didn't
really start until the 2010s, during
which the boutique fitness firms
experienced a
450% increase in industry growth
compared to 5% for traditional gyms in
that same amount of time. Those numbers
kind of speak for themselves. Venture
capital and private equity firms start
pouring in investment. The average class
price climbs from $15, $20 to $30 to
$40, and the industry has not looked
back since. So, that's how boutique
fitness classes came onto the scene.
We're starting to get the picture.
Traditional gyms saw that people liked
the group workout classes and social
aspect, but boutique fitness studios
took it to a whole another level with
this very highquality experience. But
now, let's dig in a little deeper to the
fun part, the psychology behind premium
fitness, how it transformed my personal
fitness journey, and just how these
studios have a chokeold on millions of
people. Okay, so remember the model for
traditional gyms who bet on people not
showing up. The luxury fitness model
flips this completely on its head. At a
typical gym, the psychology works
against you. I only pay $30 a month, so
skipping today is just losing a dollar.
There's minimal accountability, endless
options that create decision fatigue.
Should I do cardio or weights? Which
machines? And you're basically paying
for access to equipment, not an
experience. Boutique studios operate on
the exact opposite psychology. They are
expensive. And it doesn't take a genius
to understand the mindset shift from,
oh, I might go to the gym today to, I
paid $42 for a 5:30 class this Thursday.
I'm going. And you're not just paying
for access. You're paying for a reserved
specific time slot and a whole
experience. It's basically the
difference between having a gym
membership card in your wallet that's
collecting dust versus having a
non-refundable concert ticket. And this
total psychological reversal is
completely intentional. These studios
know exactly what they're doing by
creating this highstakes commitment
device. As far as brand positioning
goes, different studios leverage
different psychological hooks as well.
Berries uses the intensity and boot camp
vibe to make you feel accomplished. Soul
Cycle taps into the emotional catharsis
with their therapy on a bike approach.
And Solid Core emphasizes the science
and precision of their method. They're
all selling a transformation just
through different psychological
doorways. Then there are other factors
at play too. The community aspect
creates some social accountability.
Seeing the same faces at your Thursday
5:00 p.m. class, following your
instructors on Instagram who have
effectively become micro influencers
within the fitness space with thousands
of followers. But you know what I think
is the number one thing that makes these
classes so attractive, at least for me,
it's the structure. And this is where my
personal journey I think really
illustrates why these studios are so
effective. For those who don't know,
athletics was pretty much the biggest
part of my life besides academics, I
guess. But for the first 18 years of my
life, I was mainly a track athlete, a
sprinter, and a high jumper. And then I
introduced volleyball later on in high
school. But at some point in my life, I
pretty much tried every single sport.
And anyone who's ever taken sports
somewhat seriously, like you were on a
team in high school or you played a club
sport, knows how structured it is. I
would go to school and then I would go
to track practice after school, track
meets on the weekends, and then
additional workouts with my coach who
was telling me exactly what to do. It
was completely structured and I loved
it. Then came college where suddenly I
wasn't on a team anymore. For the first
time in my life, I lacked that organized
structure of high school sports. Yeah, I
still cared about being healthy, so I
went to Penn's gym occasionally, but it
was college. I was having fun. I didn't
have my coach to tell me exactly what to
do in my workouts and so I completely
fell out of a consistent routine. This
pattern lasted for about five years
pretty much all throughout college and
into the early pandemic. I'd start a
workout kick for a week and then stop
and then start again. But the problem
wasn't just the lack of structure and
accountability. It was that I didn't
truly enjoy what I was doing. Random
weight circuits and occasional runs
didn't capture what I loved about
athletics. And this isn't just my story.
I actually think this mirrors what
millions of former athletes and young
professionals experience. We go from
structured environments to being told to
just go to the gym. It's basically the
same thing as if someone always had a
personal chef and then you told them to
just cook something. It sounds spoiled
and maybe it is, but it's true. Guess
what solves those things to a tea?
Workout classes. After my 5-year hiatus
from consistent exercise, it was berries
that got me back into a routine. It
recreates what worked for me as an
athlete. A structured, coached
environment where each 50-minute session
was planned down to the second by a
professional who knows what they're
doing. And most of all, I enjoy it. The
music is blasting, the energy is high,
and I genuinely look forward to it. And
that's the real psychology of premium
fitness. Yes, the investment factor of I
paid for it, so I'm going to show up
matters. And yes, the community aspect
and the instructor relationships help,
but what I'm really paying for is the
structure. having something very well
defined for me, having a specific time
that I show up to and lock in for 50
minutes, no more, no less, and then
yeah, I have a fancy shower afterwards.
And this explains why these studios
thrive in urban areas crawling with
highly paid young professionals. They're
paying for efficiency, a perfectly
designed 50minute workout that fits into
their busy lives without requiring them
to plan, design, and actually follow
through with a solo workout. When you
look at it this way, $40 starts to make
a little bit more sense, though it's
still a lot to pay for exercise. So, who
exactly is paying for these classes and
why are they priced at $40? Before we
explore the target market and the
pricing strategy, I'm curious how much
revenue these studios are actually
generating. As we always do on the
Taylor Bell channel, let's take a quick
look at the unit economics of luxury
fitness studios. Okay, luckily, this is
pretty easy to calculate. Here's a map
of the last Barry's class that I was at.
You can see I was on treadmill number
two there. There are 59 possible spots
in the class, 11 classes per day. I'd
say on average each class is about 80%
full based off of personal observations.
And I would guess that the average
person pays about $38 per class because
yes, you can get some slight discounts
which I'll tell you more about in a
minute. That is
$19,730 per day per studio. Sounds like
a lot because it is. To put this into
perspective, Barry's revenue per square
foot is more than 400 times that of
traditional gyms and is on par with
higher-end fitness retailers like
Lululemon. I mean, what other business
can pack 59 people into a tight space
and charge them $38 to $42 for 50
minutes of their time? Not that many.
So, the Dyson hairdryers and the $15,000
treadmills are starting to make a little
bit more sense. Now, that's just
revenue. Barry's doesn't publicly
disclose their profit or EBIT doll
figures because they're privately held.
But costwise, I would assume extremely
pricey real estate rents given the ultra
premium locations like we're in the
middle of Manhattan, New York City right
now. Same with the Solid Core and Soul
Cycle. Obviously, instructor costs,
fancy amenities, and equipment costs.
Even still, industry experts estimate
that Barry's operates with a 25 to 30%
evid margin. That's earnings before
certain expenses are taken out compared
to traditional gyms which operate at
about a 15 to 20% even margin. So very
profitable indeed. Speaking of
profitable business models based on
organization, I've recently been using
something that is changing the game on
how I manage my crazy inbox. Notion, the
tool that I already use for all my
scripting, organizing, pretty much
everything, has launched Notion Mail.
So, besides Notion Mail automatically
categorizing and labeling all of my
emails for me using AI, let me show you
my two favorite features. First, the
built-in scheduling tool. Here I am
asking myself for a call to discuss
channel strategy. Nice. And instead of
switching between a bunch of apps like
my calendar and my email, I can just hit
the schedule command and boom, I can
send over my calendar availability as is
or I can go through and actually select
certain ranges of my availability. Then
on the other end, they just click one of
those times that work for them and boom,
the meeting is scheduled. Second feature
I love, the snippets. For emails that I
get all the time, Notion Mail learns my
typical responses or I can manually save
them just like this and send them in one
click. And since it's built by Notion,
it has that clean, familiar interface
with all the keyboard shortcuts that I
already know and love. So, you can try
Notion Mail for free by clicking the
link in my description. Connect your
Gmail account. It's currently only
available for Gmail, but they are
expanding soon. And thanks so much to
Notion Mail for partnering with me on
this video. Now, back to our boutique
fitness analysis. We've seen how
profitable these studios can be, but who
exactly is filling these $40 classes
besides me. Let's take a closer look at
the target market that is fueling this
luxury fitness boom. All right, we've
already kind of built out an archetype
of the type of person attending these
luxury fitness classes. 25 to 45year-old
urban professional, above average
income, healthconscious, but time
limited. Then, as with Arowan, there are
the celebrities. Some of the celebs
spotted at Berries include Jake
Gyllenhaal, Kim Kardashian, Julia
Roberts, Jennifer Lopez, David and
Victoria Beckham, Harry Styles to name a
few. But I actually personally don't
associate these luxury fitness classes
with celebrities the same way that I do
with Arowan. You're in a dark room. It's
not really a high visibility see and be
seen type of thing. That's just my
experience. So, how do these boutique
fitness studios target this specific
demographic? Largely through its
location strategy. They're all located
in densely populated young urban wealthy
areas. Even within New York City,
they're still pretty strategically
placed. We have berries in Tribeca,
Chelsea, Nho, Madison Square Park, and
then a couple in Upper East and Upper
West Side, downtown Brooklyn, and
Williamsburg. And for those who know New
York, those areas are certainly serving
the target demographic. On the marketing
front, most of them actually don't do a
ton of paid advertising. Barry's is
known to take a community first approach
by driving good relationships with his
existing clients to drive positive brand
identity and a lot of word of mouth.
Their social media strategy though is
solid. Again, the instructors at these
classes, most of them or a lot of them
are micro influencers within the fitness
space, creating fitness content, and
helping to foster that community feel.
So, after a decent amount of the
classes, the instructor will yell out,
"Follow me on Instagram, soando, and tag
me in your red room selfie." Then
there's the iconic red light
post-workout selfie. So, the social
media strategy is there, but it's all
pretty much organic. Smart. As for the
brand positioning, it definitely varies
by studio. I have to say, they've done
an incredible job carving out distinct
identities while still essentially
targeting the same demographic.
SoulCycle kind of positions itself as a
lifestyle brand with the find your soul
messaging. Solid Core appeals to the
data and results driven crowd with their
focus on efficiency and muscle
stimulation. Barry's kind of split the
difference with their best workout in
the world confidence. And the diverse
positioning is really smart business.
Same price point, different
psychological appeal. So now to look at
the pricing strategy in perceived value.
$40 for 50 minutes of your time sounds
absurd on paper, but if we closely look
at what you're paying for, the
calculation kind of starts to shift.
When you break it down, what premium
fitness classes like Solid Core,
Berries, and Soul Cycle are selling is
not just access to gym time. It's a
complete experience engineered to
actually drive results. The high-quality
instructors who know your name, the
premium equipment, the built-in
community, and of course, the structure.
These aren't just random perks. They are
carefully crafted elements of that
pricing strategy designed to justify
that $40 price tag. You're essentially
paying 80 cents per minute for a
professionally designed workout that is
pretty guaranteed to make you sweat.
Now, I should mention that there are
ways to get slight discounts for these
classes. I am not paying $40 for a
Barry's class. I personally use Class
Pass, not sponsored, I wish, which lets
you book classes at some of these
studios by using credits instead of
paying full price. So, through Class
Pass, I actually pay $30 for each of my
Barry's classes, which not cheap, but
better than $40. And if you want to try
it out, I do have a link in my
description. Again, not sponsored, but
you get some bonus credits and we both
get a little kickback. But the $40 price
point is also a marketing tool in itself
where they're automatically filtering
for their target demographic who is more
likely to view this $40 price point as a
health investment. While not everyone is
in the position to make this investment,
obviously classes like berries cater
exceptionally well to those who do. Now,
I hope it's clear that you absolutely do
not need to go to $40 workout classes to
be fit. You don't even need to spend $10
for Planet Fitness. All you need is
yourself, maybe a pair of running shoes,
the ground, and the drive to
consistently move. Even I am confident
that if I hadn't started Berries, I
would have eventually found my way back
to a consistent workout routine. Cuz
around the time I turned 25, I was like,
how am I still not consistently working
out? But for those who are down to pay
the $40, whether they go multiple times
a week and it's their only form of
workout, or they go once or twice a
month as a little treat to themsel or
they occasionally go with their friends
as a social thing, it is worth it. For
me, berries didn't just get me back into
a consistent workout routine, it pretty
fundamentally changed my adulthood
relationship with exercise. And the
irony is that after spending thousands
of dollars on these workout classes, I
have now gained the discipline to work
out anywhere. I no longer need berries
for the structure. I supplement it with
outdoor runs and self-fledged strength
training all the time. But I still
choose to go to workout classes weekly
because the experience is worth every
dollar to me. Okay. Something that I
always find interesting when analyzing
businesses like this is what's their
future outlook. And as with any
business, boutique fitness classes of
course face their challenges as well.
Similar to Arowan, which is a luxury
ger, classes like this would also be
considered to have elastic demand.
meaning that during an economic
downturn, people will become more price
sensitive to services like this. This is
the case for luxury things most of the
time because even high-income folks, if
they're looking to save a little bit of
cash, they can also turn to cheaper
alternatives. Then there's this other
offering that in theory could really
disrupt boutique fitness classes, but I
actually don't think it's that much of a
threat. It's digital offerings like
Pelaton or Mirror, which you can do from
home. These offerings of course took off
during the pandemic when people were at
home and they haven't fully disappeared
but their growth has normalized and most
successful boutique fitness classes
offer both in-person and digital
components. So digital offerings will
not replace in-person classes in my
opinion but just complement them. The
thing that I think will actually pose
the biggest threat to boutique fitness
classes is market saturation in urban
areas. Parts of Manhattan now have five
to seven boutique fitness studios within
a fiveb block radius like the berries
that we've been filming at is right over
there. So with more alternatives
entering the market, there is an
increased pressure for these studios to
differentiate themselves. This could
lead to higher marketing costs and more
aggressive customer loyalty programs to
reduce churn in these competitive
markets. But to respond to the market
saturation in major metro areas like LA
and New York, I've noticed studios like
Berries expand to secondary markets like
Nashville, Austin, Denver, which I think
is a really smart move because these
cities still have that target
demographic of young professionals with
some disposable income and the real
estate costs are lower. Customer
acquisition is a bit more reasonable
because these markets aren't quite as
saturated and they can still charge
their premium price. So, while urban
saturation presents its challenges, it's
also pushing these studios to expand
strategically. My prediction, I think
that these studios will only continue to
grow. A macro trend that I think we've
all probably noticed in the last few
years is a huge increased focus on
health and wellness. Whether it's health
podcasts like Andrew Huberman's becoming
mainstream, more discussion in the
cultural zeitgeist around longevity, the
benefits of weightlifting becoming more
talked about for both men and women,
which makes me so happy. I do think that
these boutique fitness studios really
complement this cultural shift that's
happening, especially for people who
don't really know where to start and
they have the disposable income, these
classes give you that structure. So,
while it of course is not necessary to
pay for $40 workout classes, I think
that we have thoroughly investigated
today why it is worth it for so many
people. For me, boutique fitness classes
didn't just get me back into shape. They
reconnected me with what I most loved
about athletics in the first place.
Structure, community, and the pure joy
of intense movement. And that experience
is something that I don't really put a
price tag on, even if these studios
certainly do. Have you tried luxury
fitness? If so, what do you think? Total
ripoff or amazing experience? Let me
know in the comments and like and
subscribe for more business case study
videos. Until next time, turtle
out. Is it raining too much now? Do we
go under that tree? Done.
Yay. You know how many people were
staring at me that whole time? Oh, over
there. Yeah. In the in the La Colom,
which is a Philly based coffee roaster.
And guess what? I don't really like it.
I don't like how it tastes. That's how I
feel. Oh my
god. Were there any calves that walked
by while we were filing
[Laughter]
now?
Cut. It's raining. It's a raining,
man. Oh, I hate the gusts. I hate them.
I hate
them. Great day to
film. Look.
He has little
booties. Oh, howdy. If you liked this
video, I'd bet my bottom dollar you'll
also like this one. Check it
out. Okay, bye.
Related Songs