"I see it like, 'I'm going to have 12 million hits weekly if I post a song with [Zumba],'" says Don Omar, whose song "Zumba" is on his recent "Don Omar Presents MTO2: New Generation" (Machete/Universal Music Latin Entertainment). "It is a great moment for me and for all the artists out there to start to look into these kinds of platforms to promote our music, because it is the business of the future."
Don Omar isn't alone in his thinking. In March, Insight Venture Partners, a New York-based venture capital firm, and the Raine Group, a media and entertainment investment firm, made a minority investment in the company - amounting to tens of millions of dollars, according to reports. As part of the partnership, William Morris Endeavor, a strategic partner of Raine, will work with the company to build the global Zumba brand.
"Through this partnership, we will create unprecedented brand awareness and an infectious fusion of entertainment and fitness," WME co-CEO Ari Emanuel said in a statement, underscoring Zumba's musical ties.
"The fitness scene has always been a great place to market and expose music," Interscope Records marketing director Dave Anderson confirms. "We make sure the music programmers and DJs at gyms have the latest music that we are releasing, because it is such a great place to have exposure for emerging and established acts." But Zumba ups the ante. "Our instructors are like DJs," CEO Alberto Perlman says. "They play the music, and 12 million people not only have to listen to a song, but have to do the choreography for the song. The song is in their body. It's not like a radio station, where you can change the dial."
Zumba has more than 100,000 instructors in 120-plus countries who pay $30 a month to be part of the Zumba Instructor Network (ZIN). Every two months they receive CDs and DVDs of hand-picked music, choreographed by Zumba founder Alberto "Beto" Perez. Roughly one-third of the music is original material composed as work for hire (much like other fitness programs), and roughly two-thirds are a mix of master recordings that Zumba licenses for use and covers of hits that the company rerecords but pays publishing rights to.
Zumba's reach isn't limited to its classes, events and massive conventions. The company says it has sold more than 10 million fitness DVDs through various avenues, including shopping network QVC, which recently boasted it had sold 175,000 Zumba Fitness "Party on the Go Exhilarate Workout" sets (multiple DVDs, CDs and workout gear for $114). All told more than 262,300 units of Zumba productshave been sold through QVC.
"Our customers have really responded," QVC VP of merchandising John Kelly says. "We've even seen a significant number of new shoppers come to QVC to purchase Zumba products."
Zumba is also in the videogame business, and, since 2010, has sold more than 7 million copies of "Zumba Fitness," "Zumba Fitness 2" and "Zumba Fitness Rush" for Wii and Xbox, according to the company. There's also clothing and accessories, and a magazine with a circulation of 200,000.
But Zumba's core lies in its classes, and Jean's story is emblematic of the program's impact.
"My girlfriend happens to be a Zumba instructor," says Joe Mignon, a member of Jean's management team in New York who took the artist to a Zumba event where founder Perez was leading a class. "Clef jumped on the stage and performed 'Hips Don't Lie' and he immediately identified the potential," Mignon says.
A few months later, Perez visited Jean's studio, heard a song called "Historia" and asked to use it for the Zumba playlist and also for the company's worldwide convention.
"It was like immediate marriage," Mignon says. "Clef likes to perform and the crowd participation is amazing." Ultimately, he says, "It was a trade-off. Zumba is a great platform for music, and music is part of the whole workout."
While Zumba paid a license usage fee for the rights to "Historia," the company didn't pay Jean a sponsorship fee. In fact, Zumba never pays such fees. "It's a promotional platform," Perlman says. "The artist obviously gets recognition with the name of the song, the name of the artist [and] a music video because every song has a choreography video. We create a connection between the artist and the client."
And Zumba is a worldwide phenomenon. While half of all instructors are in the United States, the second-largest market is the United Kingdom, followed by Germany and Western Europe. "One of every 10 people in Denmark takes Zumba," Perlman says. "It's insane. All of a sudden Sweden is dancing to [Don Omar's] 'Hasta Que Salga el Sol.' I have people in Kansas City who suddenly know [Colombian singer] Carlos Vives. So we can offer exposure in markets that usually don't know who these artists are."
Beyond that, there's income to be made from royalties, says Alejandro Reglero, who's in charge of licensing at EMI Music Publishing Latin America, which licenses between 20 and 30 tracks a year to Zumba products. "We work based on projected units sold, and there are very few companies today that produce CDs and DVDs and right off the bat order large quantities. The money they're generating is significant . . . If they keep growing, they will become part of an album's marketing plan."
If this business model is such a win-win, why aren't more fitness programs emulate it? For one, because licensing and synching are not only expensive but also challenging, particularly when it comes to worldwide rights of songs with multiple writers. While different instructors use whatever music they want in their routines (U.S. gyms pay a set fee for a general license), songs that become part of ZIN need to be cleared, and it isn't always possible with major hits. But also, music is central to Zumba's identity in a way that doesn't apply to most other fitness programs.
It's well-known that Zumba is the product of serendipity. When Perez, a dance and fitness instructor from Cali, Colombia, forgot the music for his aerobics class one day, he played tracks from his personal collection and choreographed a routine on the spot. By 2001, he was living in Miami and his Zumba classes were attracting loyal fans, including Perlman's mother, who urged her son - a Babson College graduate with a business degree - to check out the class.
Perlman immediately saw the potential and brought in a third partner, Alberto Aguion, also Colombian. Zumba produced several infomercials featuring all original music, but the going was still slow and the money was scarce.
"In 2005 we had trained, like, 700 instructors. It was a small community and we didn't know where the business was going," Perlman recalls. Around that time, he noticed that instructors would fly to Miami for training and would film Perez's classes - where he played hits of the moment - with their camcorders, then replicate the moves and playlists. "We knew that, No. 1, they shouldn't be doing that because of copyright law," he adds. "And No. 2, we saw there was a need for instructors to have choreography set to well-known music."
Perlman and Perez's first formal music industry visit was to Leslie Ahrens, U.S. Latin VP of creative for EMI Music Publishing Latin America. Ahrens licensed them some tracks and also pointed them in the direction of Discos Fuentes, the Colombian tropical music indie label. Because Fuentes controlled both master recordings and publishing, the process was painless.
"So we learned how to license music," Perlman says. "We understood the difference between a composition and a master, which is complicated for people who aren't in the music industry. We licensed more and more music. And our instructor base kept growing."
Today, Zumba has a music director, Sergio Minsky, a composer and executive who's worked in different capacities in the industry, and who sifts through tracks with Perlman and Perez, who, as the choreographer, has the last word.
Their picks include big names and up-and-comers who typically waive their master license use in exchange for the promotional value. Although roughly 60% of Zumba's repertoire is Latin music, playlists also include tracks like LMFAO's "Party Rock Anthem," a big Zumba hit.
As far as Zumba is concerned, "our goal is to have 100 million people taking Zumba classes, both to lose weight and to dance," Perlman says. "But our goal from the music angle is to become a launch platform, a cultural hub, a place where people discover artists. We want to become the radio station of the future."••••