Zumba: At War With the Pirates | Company of the Year
BY Leigh Buchanan
This fast-growing company is besieged by imitators, counterfeiters, and fakes. In defense, it employs a fleet of about 20 in-house lawyers and retains law firms all around the world.
Zumba Fitness may trumpet a message of love and community, but it constantly girds for battle.
The company is besieged by imitators, counterfeiters, fake instructors and other transgressors. In defense, it employs roughly 20 in-house lawyers and retains law firms all around the world.
"We throw a ridiculous amount of money toward legal," says Zumba CEO Alberto Perlman. "But it is money well spent because it protects the instructors and the brand."
Zumba exploiters come in many forms. The most benign are instructors who violate their license agreements, typically by misusing the trademark or logos in promotional materials. (Use "Zumba" as a verb or spell it with a lower-case "z" and sirens start wailing in the distance.) Far more insidious are the phonies who advertise themselves as Zumba instructors without undergoing training and becoming officially certified.
"We have a whistle-blowing system that trains instructors to sniff these people out," says Perlman. "We get 20, 30 reports of it a day."
Slapped with an order from Zumba, the illegal instructors get the training, change their business's name, or risk winding up in court, as happened to one man in the Netherlands. (He lost.)
Then there are the counterfeiters. As soon as Zumba infomercials debuted on TV, people started copying the DVDs, producing fake booklets and packaging, and posting them by the thousands on wholesale boards such as Ali Baba and Dhgate.
"Some lady in New Jersey will buy a thousand units," says Perlman. "Some guy in California will buy another thousand units. And they'll sell them on eBay or on Amazon. They'll say they didn't know they were counterfeits, and maybe they didn't."
There are fewer distribution channels than counterfeiters, so Zumba decided to attack the problem that way. Unable to get the attention of Ali Baba's CEO, Jack Ma, Perlman joined the Young Presidents Organization. YPO is a sister group of the World Presidents' Organization, of which Ma is a member.
"Now he has to answer my calls, because it's the honor system that if another member contacts you, you have to respond," says Perlman.
Zumba's CEO learned that Ali Baba puts up gates against counterfeit entertainment products, but not counterfeit education products--and it considered Zumba educational. After Perlman convinced the company's legal officer to reclassify Zumba as entertainment, the problem largely ceased. Zumba had an easier time working with Amazon and Ebay. Those companies’ rights-management teams arranged for Zumba to work with a third-party vendor that swiftly deletes fake products from their sites when detected.
But counterfeiters target more than just Zumba products. A common tactic is to counterfeit websites, using domains such as Zoomba.com or Zumbaa.com. The malefactors sell DVDs through those sites and have them shipped directly from China. Zumba chose to hit those marketers where they live--in their advertising buys.
"I have three cousins who work at Google," says Perlman. "I said, please go over to the legal department and talk to them for me because these people should not be running our keywords." Google complied, and other companies can no longer buy Google Ads that offer Zumba DVDs for sale.
Despite Zumba's inroads against piracy, Perlman is resigned that it's unstoppable. "It keeps popping up, like Whack-a-Mole times a hundred," he says. So in the best if-you-can't-beat-em-exploit-em tradition, the company now records messages soliciting class attendance on its DVDs, which the pirates dupe and distribute widely. And it includes ads for classes directly on the packaging, which pirates also copy.
"These pirates are going to sell a million people DVDs, and these million people will see a message that says go find a class," says Perlman. "So we've made the pirates into our marketing partners. Sometimes you have to just roll with the punches."
LEIGH BUCHANAN is an editor at large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture. @LeighEBuchanan