This week Planet Money had an episode about the economic angle of how gyms make money off you not using your services (transcript). The basics are easy enough to understand. If you buy a memership to a gym, and actually showed up every day, then you’d wear out the equipment. If you are a member and pay dues and don’t utilize the services then the costs are kept down. In fact it is obvious that gyms have many more members than they have capacity to service at any given time. The radio piece quotes one manager as saying that her Planet Fitness has 6,000 members, but a capacity of only 300 (and often it is rather empty). In fact the whole idea of gyms like Planet Fitness is to mix a portfolio of projecting the ideal of fitness while enabling your more slothful tendencies. People join for the cardio machines, but they stay for the pizza nights and socials.
In contrast another gym they profiled, Precision Athlete, serves an opposite clientele. While Planet Fitness charges $10 a month, Precision Athlete charges $500. Some of this has to be the fixed costs of a small operation with high level trainers, but it is also clear that their equipment gets used, a lot. This puts in stark relief the peculiarities of the normal gym, where there’s a power law distribution of utilization. About 10% of the members probably use 90% of the “gym time.”
Addendum: In some ways Planet Fitness perfectly encapsulates are our contemporary ethos among a certain set of middle class Americans. Since actually working out is “triggering,” they ban or discourage it.
Comments are closed.