I used to spend a lot of money on fitness. Back in the old days—2009—I supplemented my $85 monthly gym bloombergbizweek_341x199membership with a weekly $28 Pilates class. This month, my exercise budget is $18, the cost of a subscription to YogaGlo, an on-demand yoga website. Instead of schlepping to a studio or gym three times a week, I can find a yoga class that’s 30, 45, or 60 minutes long and do it in the comfort of my living room.

Yoga studios should be worried, but so should big fitness chains, such as Town Sports International, Life Time Fitness, Equinox, and Sports Club/LA. The $21 billion U.S. health and fitness industry, with nearly 30,000 locations, is losing customers to YogaGlo and a host of other fitness companies—most of them startups—that are following a classic disruptive model. They don’t have all the frills of full-service gyms, but what they do offer is convenience and customization that brick-and-mortar operations simply can’t match—and at a much lower price.

Wearable devices such as Fitbit and Nike’s FuelBand track your physical activity and let you compete with friends online. Free apps RunKeeper, GymPact, and Strava offer creative ways to motivate you and track workouts. No-frills gyms such as PlanetFitness, which cost $10 to $20 per month, are expanding rapidly, while many corporations now offer free office gyms. The November Project, a free outdoor workout club, has taken off in 10 cities, up from four a few months ago. These are just a few examples of new, disruptive fitness offerings. P90X, Insanity, DailyBurn.com—the list goes on and on.

Large fitness chains are already feeling the burn. Last week, Town Sports reported that revenue fell 1.8 percent in 2013 and total membership dropped 2.5 percent. Life Time Fitness also reported 2013 earnings last week, and although it had healthy revenue and net income increases, memberships rose only 0.3 percent in 2013 and attrition in the fourth quarter jumped to 9.8 percent, from 9.1 percent in 2012. Gyms have always had high membership attrition, but the proliferation of low-cost competitors is making it harder than ever to keep customers.

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