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In-Home Personal Training Market: TAM
Since pre-compiled data on the total addressable market of the digital fitness market or in-house personal training and workout market were not available, we used the available information to arrive at an estimated figure. Based on our calculations, the global market TAM is around $115 billion. While industry-wide CAC and CLTV were not available, we found that the latest CAC and CLTV for Peloton; a leading player in the market were reported to be $5 and $3,593 respectively.
DIGITAL FITNESS MARKET VALUATION
Total Addressable Market (TAM)
- According to L.E.K. Consulting, the total US opportunity within the digital fitness market (i.e total addressable market) is estimated to be around $10 billion-$15 billion (average of $12.5 billion). The current market penetration is 7%-10% (average of 8.5%).
- Taking only averages into consideration, we find that the current US market is worth $1.06 billion ($12.5 billion*8.5%) and that the total market opportunity is around 12 times this value ($12.5 billion/$1.06 billion).
- While exact statistics on the US share of the digital fitness market was not available, it was found that North America represents 38% of the global fitness app market. It was also found that North America dominates the global wearable technology market with a 30% share.
- Marketwatch research shows that the global digital market was valued at $9597.7 million in 2020.
- If we assume that the global market for digital fitness shares the same market conditions/potential as the regional leader North America, we can calculate the TAM for the global market to be around 12 times the current market value, which is $115 billion ($9597.7 million*12).
DIGITAL FITNESS MARKET METRICS
Lifetime Value (LTV)
- According to the SEC filings of Peloton, their lifetime values per connected subscriber for 2017, 2018, and 2019 were $3,433, $4,015, and $3,593 respectively.
- L.E.K Consulting has reported that "although digital fitness services existed prior to Peloton’s 2014 launch, Peloton was the first to effectively commercialize the opportunity at scale by launching an integrated hardware and content product."
Customer Acquisition Cost (CAC)
- Peloton has also reported its CAC per connect fitness subscriber for 2017, 2018, and 2019 as $183, $(33), and $5 respectively. The company notes that it was able to offset its customer acquisition costs with the gross profit earned on its connected fitness products (customers pay $2,245 for the Peloton bike and a $39 monthly subscription fee).
RESEARCH STRATEGY
After an extensive search through market research reports, industry reports, and expert analysis related to digital fitness and in-house personal training and workouts market, it was clear that statistics such as the total addressable market, customer acquisition cost, and customer lifetime value was not readily available in the public domain. Since we were unable to find pre-compiled information related to TAM for the global digital fitness, we triangulated a figure based on the finding that the US market penetration is currently around 8.5% of its potential market and that North America is the dominant regional player in the global market. Due to the scarcity of information, we used certain assumptions to arrive at an estimated TAM.
Similarly, market metrics on the global (or US) customer acquisition costs and lifetime value of the digital fitness market were not freely available. What we did find were company-specific metrics from Peloton, a well-performing player in the market. Our next approach was to search for comparable metrics from other competitors such as Apple, Mirror, and Fitbit. However, we found that this information was not disclosed to the public by these companies.