WeightWatchers 2007 Annual Report Download - page 14

PART I
Item 1. Business
Overview
We are a leading global branded consumer company and the leading global provider of weight management
services, with a presence in over 25 countries around the world. With over four decades of weight management
experience, expertise and know-how, we have established Weight Watchers as one of the most recognized and
trusted brand names among weight conscious consumers. In 2007, consumers spent over $4 billion on Weight
Watchers branded products and services, including meetings conducted by us and our franchisees, products sold
at meetings, Internet subscription products sold by WeightWatchers.com, licensed products sold in retail
channels and magazine subscriptions and other publications.
The high awareness and credibility of our brand among all types of weight-conscious consumers—women
and men, consumers online and offline, the support-inclined and the self-help inclined—provide us with a
significant competitive advantage and growth opportunity. As the number of overweight and obese people
worldwide grows, we believe our global presence and brand awareness uniquely position us to capture an
increasing share of the global weight management market through our core meeting business and our additional
growth vehicles, such as WeightWatchers.com and our licensing efforts.
In the more than 40 years since our founding, we have built our meeting business by helping millions of
people around the world lose weight through sensible and sustainable food plans, exercise, behavior modification
and group support. Each week, approximately 1.5 million members attend over 50,000 Weight Watchers
meetings around the world, which are run by more than 15,000 leaders—each of whom has lost weight on our
program. We are constantly improving our scientifically-based weight management approaches, and we are one
of only a few commercial weight management programs whose efficacy has been clinically proven. Our strong
brand, together with the effectiveness of our plans, loyal customer base and unparalleled network and
infrastructure, enable us to attract new and returning members efficiently. Our customer acquisition costs are
relatively low due to both word of mouth referrals and our efficient mass marketing programs.
Through WeightWatchers.com, we offer Internet subscription weight management products to consumers
and maintain an interactive presence on the Internet for the Weight Watchers brand. We believe
WeightWatchers.com is the global leading provider of weight management Internet subscription products.
Currently, we provide two Internet subscription offerings: Weight Watchers Online and Weight Watchers eTools.
Weight Watchers Online provides interactive and personalized resources that allow users to follow our weight
management plans via the Internet. Weight Watchers eTools is the Internet weight management companion for
Weight Watchers meetings members who want to interactively manage the day-to-day aspects of their weight
management plans on the Internet. We currently offer these two products in the United States, the U.K., Canada,
Germany, France and Australia.
Our licensing revenues have been rapidly growing in both the United States and internationally. Companies
continue to show an increased interest in licensing our brand and other intellectual property as a platform to build
their businesses since the Weight Watchers brand brings high credibility and access to the weight conscious
consumer. By partnering with carefully selected companies in categories relevant and helpful to weight
conscious consumers, we have created a highly profitable business as well as a powerful vehicle to reinforce the
Weight Watchers brand in the minds of our target consumers.
The Global Weight Management Market
We participate in the global weight management market. According to Marketdata Enterprises, the weight
management industry had revenue of approximately $55 billion in 2006 in the United States alone. The number
of overweight and obese people around the world has steadily increased over the past 20 years and is estimated at
1