A local hot yoga studio charges $160 for 10 class credits. While far from a huge hot yoga fan, I like to go occasionally, especially with my wife.

Sixteen dollars for an hour class seems fair: The studio has to cover fixed costs, utilities, pay an instructor, clean up the sweaty floor afterwards... objectively, $16 is a solid deal.

But I pay a lot less: My ClassPass membership costs $29 per month for 15 credits, and one of the sessions I attended only required 1 credit. 

Yep. It cost me $2 per class. 

***

The ClassPass business model is based on offering discounted fitness classes to subscribers. That model has proved to be so popular that ClassPass is the most recent unicorn; a recent $285 million fundraising round puts the company's valuation at over $1 billion.

Unicorn or not, ClassPass needs that level of investment. While ClassPass paid studios a discounted rate (and may still pay; the company keeps financials close to its vest), it sometimes charged subscribers even less. Investor funds picked up the revenue/cost shortfall. 

That's the case at the yoga studio. ClassPass paid the studio over $9 for the class I took for 1 credit; in short, ClassPass subsidized my attendance. (In a related fact, the studio was also selling a Groupon 5-pack for $25, marketing the same class for $4 less than ClassPass paid for reservations, which means the studio made, after Groupon's cut, less than $3 per person. So clearly they're okay with discounted fees.) 

But even if a studio owner receives more than what I pay, still: The studio gets a lot less for a ClassPass customer than it did, or does, from a member or drop-in. 

And then there's the resulting perceived value effect. Once upon a time, I would have been happy to pay $16 to attend an occasional hot yoga class. Now that I've paid $2, or $4, or even $8... $16 is much more expensive as what I've grown accustomed to paying.

However irrationally, ClassPass has changed the value proposition for me, and countless other people.

Which is one of the reasons many fitness studios find themselves in a bind.

Once seen as a way to attract potential studio members, and hopefully convert them -- for a time ClassPass only allowed subscribers to attend any one studio a total of three times -- today, few ClassPass subscribers convert. A ClassPass is cheaper than a membership.

While once seen as a way to capture incremental revenue on unsold inventory, ClassPass lets me sign up for classes a week in advance. If enough people like me sign up, that probably fills at least a few spots that might have gone to later-minute customers at full rate. (Although a ClassPass booking algorithm does try to level-load the equation.)

Plus, regular attendees have an incentive to stop being studio members and start being ClassPass subscribers. It's cheaper and nearly as convenient; while every class might not be available, for non die-hards like me who normally work out at a gym and see taking ocaasional classes as a fun add-on, that's okay.

Losing "in-house" members means studios miss out on some degree of what the industry calls breakage: People who pay for memberships, but rarely, if ever, actually attend. (Think of breakage as a gift card that never gets redeemed.)

Most gyms, for example, base their business model on significant breakage. One owner I know estimates that for every six members, only one will regularly walk through the door; the result is a 6/1 member/attendee revenue model.

But since a studio only gets paid by ClassPass when a member actually signs up for a class, the revenue model is 1/1.

***

Granted, ClassPass has reportedly set studio rates higher as it converted to a commission-per-booking system. But that still doesn't mean studios receive the same revenue for ClassPass sign-ups as they do for members and drop-ins.

All of which has reportedly left some studios feeling uneasy about their relationship with ClassPass. 

And some less than welcoming of ClassPass attendees.

The yoga studio owner has implied, through frowns and sighs and at least one, "Oh... you booked through Claaaaasspaaaaass...", made me feel like a necessary evil.

In some ways, so has an indoor cycling studio.

The first time I went, the check-in person frowned when I mentioned ClassPass. And since ClassPass attendees don't get to choose their bikes, we tend to be placed in a back corner of the room.

Which is cool. I don't need to choose a certain bike. I have a monitor in front of me, can see the leaderboard when it flashes up, and am neither more or less motivated by the proximity of the instructor. Tell me what to do; I'll do it. 

But I know the vibe -- that in some ClassPassers are resented by the studio -- makes some people uneasy.

Even though we're making a basic economic decision. Classes typically require 3 to 4 ClassPass credits, which means they cost me $6 to $8 per session. For $29, I can ride four to five times a month. The equivalent package from the studio costs $69 per month, or between $14 and $17 per ride.

That's a problem ClassPass will have to solve as it faces increasing pressure from investors to shift from a headlong pursuit of growth to findings its way to long-term profitability. 

Because without studios, ClassPass doesn't exist. Without a profitable revenue model, studios don't exist.

And if the model doesn't work for both... ultimately, it won't work at all.