Why are live, high-touch digital services harder to scale than pre-recorded digital content?

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Accepted Answer

I agree that if you could get those 136,000 to do a live session with you, you would have a very large and successful business (like Peleton has). But the only reason that Peleton gets those 136,000 is because they have the other 95%, because they can ammortize the costs of running those live costs by using that exact same content to feed the other 95%. In addition, I'm not sure they could have attracted "only" the 5%. In addition, their CAC was reasonable because their average content cost is so low, and then when someone is in the fold, some of them choose live and the majority (we are guessing) opt for pre-recorded.

I'm not knocking your business at all - I'm just suggesting that if your differentiation is "live" sessions (in which your coaches can respond real time to the bio metrics they are seeing during a workout) it will be challenging from a CAC and margin perspective and a very different business from Peleton in which a single class may be seen tens, if not hundreds of thousands of times.

I didn't see a specific question in your note, so I'm responding to the Peleton analogy, but if you have something specific you want my thoughts on, feel free to let me know.

Best of luck.