Telling the truth about SME life today

Video piracy is a crime

Many companies producing digital content take great pains to make their media as theft-proof as possible. But Davis does the opposite. The exercise videos posted on are DRM-free (digital rights management – i.e. encoded, encrypted, un-steal-able), they’re just watermarked with the Virtual Gym logo.

“When a new fitness DVD comes out on the traditional DVD market, its shelf life is very short,” says Davis. “The new title comes out, a couple of million copies will be sold. These copies will be watched an average of 3.5 times and then never again – it becomes repetitive and boring.”

Davis is confident that fitness fanatics will never get bored with his site: subscribers get access to 120 fresh videos every month. ”We only went live in January this year and we are already the largest provider of exercise classes, with the largest back catalogue,” says Davis. And membership to the Virtual Gym site is reasonable: £15 a month, a fraction of real-world gym prices. Davis predicts a turnover of £1.887m next year, and with tiny overheads, margins are spectacular, forecasted at £1.273m.

These videos are extremely accessible. Not everyone has enough floor space to work out in front of their PC. “Some people watch them on their computers,” says Davis. “But you can also burn the videos onto a DVD and watch them on TV. Or, if you’ve got Apple TV or IP TV, you can stream the content to your TV instead.

Because of this volume of content, it doesn’t make sense for Davis to have a protective attitude. “With new videos going up all the time, there’s no point latching on to one video,” he says. “If one of our subscribers decides to make a copy, fine. It’s got our branding all over it, and whoever downloads it will only watch it a few times before they’re after something new. Then they might join the site.”

This open-handed approach has also gives Virtual Gym the edge over their US competitor. “An American journalist gave them a good hammered in the New York Daily News,” says Davis, “Its videos had so much DRM that the reviewer couldn’t even use the content!”

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