Fitness sales spread to alternative outlets

As mass merchants cut back on titles

By Cindy Spielvogel -- Video Business, 12/28/2007

DEC. 28 | Wal-Mart and Target have cut back on fitness titles, according to some suppliers, but that hasn’t stemmed the flow of titles. Labels that have lost business from the mass merchants report making up for it in other outlets, from supermarkets to sporting goods stores to Internet sales.

In a year when many other DVD categories have seen a decline in the number of individual titles released, fitness suppliers are releasing as many or more titles for the coming New Year’s resolution fitness season this year as they did last year.

Although most suppliers privately lament the decrease in attention they’re getting from the mass merchants, Bill Sondheim, president of direct-response marketing and trade distribution for fitness DVD market share leader Gaiam, said his company is doing well at mass and at most other outlets as well.

“Unquestionably we’ll be up this first quarter,” Sondheim said. “We expect to be up 15% to 20% from last year’s first quarter” on roughly the same number of titles released, he said. “I do think there has been a change in aggressiveness with some of our competitors—some of them may be releasing fewer titles. A couple of key retailers, notably Wal-Mart and Target, have become a little more selective. Unless you’re in the top echelon, it’s hard to get placed.”

Sondheim credited much of his company’s success to its extensive use of infomercials, which drive the market at retail, he said. Gaiam infomercials frequently include titles packaged with equipment, and that’s helping the DVDs find placement in equipment sections of stores.

“Target has changed the way they’re handling fitness, taking it away from video and putting it squarely in the fitness exercise department,” he said.

Also bullish on the fitness business is Lionsgate, which is poised to continue picking up share thanks to several brand-name properties, including top seller Dancing With the Stars. “We’re releasing over 10 titles around the end of the year for January,” representing a doubling over last year, said Kajsa Vikman, Lionsgate VP of marketing and fitness. “Our titles perform well in all the outlets. We’ve heard of mass merchants having shelf space issues, but they continue to support our titles,” she said. “Fitness as a genre is going up in general and for us.”

“From September to December, we released 12 titles, up just slightly from last year,” said Michelle Rygiel, senior VP of creative and product development for Anchor Bay Entertainment. “Distribution is down some at mass, but overall sales are up. We have increased at grocery and sporting goods over 50% year to date.”

“We’ve seen a lot of activity and growth inside the grocer sector,” added Dan Gurlitz, VP of video for Koch Entertainment Distribution. “And there’s always a lot online. The online world becomes the place for people to hunt and find stuff they may not be able to find in a store.”

“Any time in the market when a big mass merchant cuts back on a category, the demand doesn’t go away, it just opens up somewhere else,” said Jeff Fergason, president of Razor Digital Entertainment. “Sales at Amazon are stronger than ever. Online has grown dramatically for us in the last couple of months.”