WeightWatchers 2005 Annual Report Download - page 14

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Product Sales
We sell a range of products, including bars, snacks, cookbooks, POINTS value guides, Weight
Watchers magazines and POINTS calculators, that complement our weight management plans and help
our customers in their weight management efforts. Our emphasis has been on consumables that drive
recurring purchases. Our products are designed to be high quality, to offer benefits related to the
Weight Watchers plans, to be competitively priced and to be easy to merchandise. We continuously
update our product range and share best practices around the globe.
We sell our products primarily through our meeting operations and to our franchisees. Recently,
we have grown our product sales per attendee by updating our selection of products. In fiscal 2005,
sales of our proprietary products represented 25% of our revenues. We intend to continue to optimize
our product offerings by updating existing products and selectively introducing new products.
Our WeightWatchers.com Offerings
Through WeightWatchers.com, we are well positioned to benefit from the large self-help market as
well as several trends taking place in the Internet marketplace including an increased willingness to
access and pay for web content, the proliferation of broadband access and the growth of e-Commerce
and Internet advertising. According to comScore, the U.S. paid Internet content market has nearly
quadrupled from 2001 to 2005, increasing from $265 million in the first half of 2001 to over
$985 million in the first half of 2005, with almost 80% of U.S. Internet content revenue in the first half
of 2005 coming from subscriptions as opposed to individual sales.
Since 2001, we have offered two Internet subscription products in the United States—Weight
Watchers Online and Weight Watchers eTools.
Weight Watchers Online
Weight Watchers Online is a product based on the Weight Watchers approach to weight
management and is designed to attract self-help-inclined consumers. Weight Watchers Online
helps consumers adopt a healthier lifestyle, with a view toward long-term behavior
modification—a key aspect of the Weight Watchers approach toward sustainable weight loss.
Weight Watchers Online allows consumers to learn how to make healthier food choices and to
lead a more active lifestyle by providing them with online content, functionality, resources and
interactive web-based weight management plans.
Weight Watchers eTools
Weight Watchers eTools is an Internet weight management offering available only to
consumers who are Weight Watchers meetings members. Weight Watchers eTools allows users
to interactively manage the day-to-day aspects of their weight management plan online,
discover different food options, stay informed and motivated, and keep track of their weight
management efforts.
In the third quarter of 2002, WeightWatchers.com launched its two Internet subscription products
on our U.K. and Canadian websites. In January 2004, WeightWatchers.com launched its Internet
subscription products on our German website, and, in December 2005, WeightWatchers.com launched
its Internet subscription products on our Australia/New Zealand website. These products have similar
functionality to the existing U.S. products, but are tailored specifically to each of our local markets.
As of December 31, 2005, WeightWatchers.com had approximately 535,000 active subscribers, of
which approximately 75% were subscribers to Weight Watchers Online.
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