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Weight Watchers closed out 2014 with 2.5 million active subscribers, 15 percent fewer than a year earlier. It's easy to see why a premium manager of weight-loss plans is struggling these days. The popularity of free fitness-tracking apps, running clubs and charity 5k events is making it easy for folks to engage in an active lifestyle without having to pay for meal-based membership plans.
Things aren't going well, naturally. Even the Internet has burned Weight Watchers. The online platform that it launched a few years ago to woo folks who didn't want to go to physical locations has now posted back-to-back years of declines. It's bad -- really bad -- but it's not the end of the world.
The market can offer success stories starring companies that once slipped in terms of subscribers, only to bounce back. Some find a way to turn things around. Others find a way to generate new revenue streams.
Bring 'Em Back
Sirius XM Radio (SIRI) is the top dog when it comes to premium radio, a product of the 2008 merger between Sirius and XM. The combination of the only two providers of satellite radio has resulted in some serious synergies, but it was a harder sell for drivers shortly following the merger.
Sirius XM posted back-to-back quarters of subscriber declines to kick off 2009, but it didn't last. Sequential growth resumed during the third quarter, and it's been pretty steady. Sirius XM has gone on to grow its customer base in 21 of the 22 subsequent quarters.
The secret to Sirius XM's bounce is a revival in the auto industry. Sirius XM is at the mercy of new cars moving off showroom floors with factory-installed satellite receivers, and that just wasn't happening in early 2009 when the global economy was at its worst. Sirius XM helped make its own luck by striking deals with more automakers to place receivers in more cars.
TiVo (TIVO) is another company that found a way to grow its shrinking audience of DVR owners. Its base of directly serviced subscribers began to fade away in a world of digital and on-demand viewing. TiVo countered by reaching out to cable and satellite TV providers by selling TiVo systems through them. It worked. Total TiVo subscribers are up 30 percent over the past year.
Changing the Question
Some companies excel at adapting to the changing trend. Netflix (NFLX) saw its DVD subscribers peak at 15 million in 2011. It predicted years ago -- launching a streaming platform in 2007 that became the niche leader -- that physical disc rentals would be on their way out. Netflix DVD subscribers continue to shrink with every passing quarter, down to 5.8 million at the end of 2014. The stock continues to be one of the market's biggest growth darlings, however, on the success of its streaming service that now watches over 57.4 million accounts worldwide.
Comcast (CMCSK) is another company making the most of its shrinking role in cable TV. It has suffered sequential declines in video customers in 28 of the past 31 quarters as customers cut the cord in favor of cheaper alternatives. It has been able to still post top-line growth by growing its presence in broadband Internet and Web-based home phone service. Comcast also acquired NBCUniversal, giving it a juicy stake in the content and programming that is growing in popularity outside of cable television providers.
Weight Watchers will probably have to go this route, as the free or nearly free alternatives are growing too powerful. It won't be easy, but don't ever write off a reinvention as an option. Netflix and Comcast are living proof that it can happen.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
