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...considered it, but up to this point we have
stayed away from licensing our patents.”
Competitors also have approached
Johnson Health Tech, which owns Matrix
Fitness, about sublicensing, but other than
sublicensing one of its eight brands to a
major retailer in Canada, the Cottage Grove,
WI-based company has avoided it. When
deciding whether or not to sublicense its
technology, Johnson Health Tech considers
the nature of the competitor and the space
and channel in which the competitor special-
izes, says Mark Zabel vice president of global
marketing. Its also tries to determine whether
it would make good business sense from a
strategic and financial perspective.
The terms of a sublicense agreement
are handled on an individual basis. Compa-
nies that sublicense their technology can
protect their profitability by writing into the
agreement that the sublicensee can’t make
changes to a particular technology. Other-
wise, a competitor can beat a company at its
own game if it can find a better or cheaper
way to make a piece of equipment, Porth
says.
Sublicenses often last for the term of
a patent, which generally last between 17 to
20 years. After that, patents are in the public
domain. However, technology may be subli-
censed at any time during the patent term.
“You’ll never know where it will go,” Porth
says. “If you write the right deal up, you can
make a ton of money o of it, but it could
also hurt your business. You have no control
over the end result.”
When a company decides to sublicense
it technology, it is introducing a competitor
in the space, which carries a risk, say Doug
Johns, global marketing director for Precor.
The company that is granting the sublicense,
needs to be confident that the value it oers
goes well beyond the specific patent on a
product, and that its level of service is appeal-
ing so it can continue to compete.
“If there is a company that just has one
technology, and that’s the whole core of their
business, and they give it up to other people,
they might find themselves out of a job,”
Johns says. “You can’t take it lightly.”
Sublicensing technology to other
companies has its drawbacks, but at the same
time, multiple competitors in a particular cat-
egory can bring more attention to the overall
category, which can be good for business,
Johns says. For example, in 1995, the ellipti-
cal category did not even exist, and now it
is the second-largest equipment category
behind treadmills.
Whether a manufacturer opts to subli-
cense its own technology or sign a sublicense
agreement with another vendor, sublicens-
ing ultimately has a significant impact on the
health club industry. By selling innovative
equipment, manufacturers can help health
clubs attract and retain members. »
4
www.gymtechservice.com
Industry Trends
Generation X & Y
Members Say Cost is
Main Reason They Leave
Their Health Club.
Members of Generation X and Y were more likely to
belong to health clubs than other age groups, and like
other age groups,
cost was their num-
ber one reason for
leaving their club.
According to “The
IHRSA Trend Report:
Fourth Quarter 2011
Executive Summary,”
17% of Generation
X and 19% percent of Generation Y were health club
members of the quarter ending Dec. 31, 2011.
Consistent with results from former members overall,
cost is the number one reason Generation X and Y
cite for leaving their health clubs. “I moved/the loca-
tion was no longer convenient” was another common
reason for leaving, with Generation X more likely to
cite this reason than Generation Y.
The top five reasons Generation X & Y continued to
use their clubs were overall health/well-being, con-
venient location, making progress with their personal
goals, access to group exercise and fitness profes-
sionals, and having fun. Generation Y includes people
from ages 21 to 30 while Generation X includes those
from ages of 31 to 45. »
Industry Trends
IHRSA Announces Health
Club Trends for 2012
An increase in the number of people working out in
health clubs is among the trends highlighted by Inter-
national Health, Racquet and Sports Club Association
(IHRSA) in its annual list.
IHRSA says that despite the
economy and 16% of the Ameri-
can population belonging to a
health club, membership has
increased more than 10% over
the past three years to more than
50.2 million members.
Three out of 10 Americans plan to increase spend-
ing in joining or rejoining a health club, according
to results from the Physical Activity Council’s annual
participation study. Also, according to an IBISWorld
market research report cited by IHRSA, the demand
for gyms, and health clubs will continue to rise over
the next five years, as the general public becomes
more health-conscious and the aging population
places a greater emphasis on staying fit.
The top 10 IHRSA health club trends for 2012 are:
1. More people working out in clubs.
2. Programming and certifications for baby boomers
3. Youth programming.
4. Social exercise.
5. Small group personal training.
6. Technology.
7. Conventional fitness options.
8. Corporate wellness benefits.
9. Body weight exercise.
10. Physician prescribed exercise. »
Fischbach, Florence. “Sublicensing Technology to Competitors Oers Risk and
Rewards for Fitness Equipment Manufacturers.” Club Industry. (2012)