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November 3, 2005

     Ms.
          Heather Tress and Ms. Linda Cvrkel
United States Securities and Exchange
          Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C. 20549

     RE:
     Gaiam, Inc.

Form 10-K for the year ended December 31, 2004

Filed March 3, 2005

File No. 0-27517

Dear Ms. Tress and Ms. Cvrkel:

        This
letter responds to your letter dated October 3, 2005 relating to your comments in
connection with the above-referenced submission. Gaiam’s responses to these comments
follow the numbered comments contained in the October 3, 2005 letter, which we have
reproduced below.

Management’s Discussion and
Analysis of Financial Condition and Results of Operations, page 15 Year Ended December 31,
2004 compared to year ended December 31, 2003, page 17

          1.

          We note the reason for the increase in selling and operating expense in both
          2004 and 2003 was due to the doubling of the  sales force in the business
          segment. Please tell us more about your increase in sales staff in two
          consecutive years despite the  decrease in overall revenues and in the
          business segment. In future filings, please disclose the reasons for the rapid
          growth of  the sales force and impact this is currently having and
          expected to have on your revenues and gross profit.

Although
the 2003-2004 revenue declines coincided with increases in sales staffing, the additional
sales staff was more fully associated with a change in the way Gaiam services its accounts
and Gaiam’s entry into expanded business channels. At the end of 2002, Gaiam hired a
Vice President of Sales to restructure the sales organization and spearhead sales
initiatives in our domestic business segment. These adjustments were necessitated by
changes in the marketplace, particularly a slowing in demand for media products, and
changes in our distributor relationships. As mentioned in the first paragraph of the 2003
v 2002 MD&A section, Gaiam’s revenues declined from $111.4 million in 2002 to
$102 million in 2003 primarily due to a decline in sales to distributors. This occurred,
in part, due to volume declines with certain distributors and a change from a distributor
relationship to a direct sales relationship with certain customers. This necessitated
increasing Gaiam’s sales force to replace outside sales representatives provided by
the distributors. This resulted in an increase in selling and operating expense, but also
resulted in higher gross profit margins with the transitioned customers. Additionally,
Gaiam placed its sales emphasis on rolling out its store-within-store presentation to mass
market retailers, particularly the bookstore channel, which necessitated an increase in
staffing to service this channel. As a result of theses changes and initiatives,
Gaiam’s sales force doubled from 3 to 6 members by December 31, 2003. During 2004, we
added three new national sales managers, each with specialized industry experience (for
example, grocery) and two additional team members specializing in the sports retailer
channel, which brought the sales team to a total of 11 members by the end of the year. As
it generally takes between six months to a year for a sales person to be fully trained and
effective (familiar with our products and their customer base and territory), Gaiam is now
starting to fully recognize a return on the investment made to expand our sales force. For
the first six months of 2005, domestic business segment revenue has increased 31.6% as
compared to the first six months of 2004. In future filings, we will incorporate a
discussion of these factors and the impact the sales force expansion is having on our
revenue growth and profitability.

Notes to Consolidated
Financial Statements, page 28
Note 1. Summary of significant Accounting Policies, page
28
Long-lived Assets, page 30

          2.

          Given the significant level of operating losses and net losses experienced
          during the past two fiscal years and the fact  that losses have continued
          to be incurred in 2005, please explain in further detail how the company has
          determined that its  various categories of long-lived assets, including
          goodwill, property, plant and equipment, capitalized production costs and
          media library were not impaired at December 31, 2004 or in subsequent
          reporting periods. As part of your response, you should  explain in
          detail how each category of long-lived assets was evaluated for impairment,
          including methods used in determining fair  values and any other
          significant or relevant assumptions. Your response should also indicate whether
          projected sales and profit  margins used in your analysis are expected to
          improve in future periods and your basis for assuming these improvements. We may
           have further comment upon receipt of your response.

Although
we were disappointed in our operating results for the past two years, the losses sustained
during this period have not impacted our ability to generate positive operating cash flows
from our assets. For the years ended December 31, 2003 and 2004, Gaiam generated positive
operating cash flows of $6 million and $3.1 million, respectively. Our ending cash balance
was $11.4 million at December 31, 2002, and we ended 2004 with $10.4 million in cash and
no debt. During the intervening two years, we spent $6.8 million to purchase additional
property, equipment and media content, and we utilized an additional $3.7 million in net
cash to make acquisitions. No debt was incurred to fund these investments in the company,
as they were funded primarily from positive operating cash flow.

With
the format transition from VHS to DVD in our business segment behind us, Gaiam’s
financial performance has improved during the first six months of 2005. We consider the
poor performance for the last two fiscal years to be primarily the result of unusual,
non-recurring events, and we have seen significant improvements in our operations and
performance this year. Revenue generated by both the business and direct to consumer
segments has increased 24% and 14%, respectively, as compared to the first six months of
2004. The net loss for the six months ended June 30, 2005 was $650 thousand, as compared
to a net loss of $2.5 million for the comparable 2004 period. Despite this net loss for
the first six months of 2005, we generated $2.8 million in positive operating cash flow,
and our cash position increased to $12.3 million. As we are a seasonal business, with the
calendar fourth quarter as our strongest period for the generation of both revenues and
net income, we believe we are positioned to return to overall profitability. For these
reasons, combined with the results of our testing and evaluations, as summarized by asset
category below, we believe that no impairment of either our long-lived assets or goodwill
existed at December 31, 2004 or in subsequent periods.

Capitalized
Production Costs
In
accordance with SOP No. 00-2, Accounting by Producers or Distributors of Films,
capitalized production costs consists of costs incurred to produce media content, net of
accumulated amortization. These costs, as well as participations costs, are recognized as
operating expenses on an individual title basis in the ratio that the current year’s
gross revenues bear to management’s estimate of total ultimate gross revenues from
all sources to be earned over a seven year period. Capitalized production costs are stated
at the lower of unamortized cost or estimated fair value on an individual title basis.
Revenue forecasts are reviewed by management on a quarterly basis and revised when
warranted by changing conditions. When estimates of total revenues and other events or
changes in circumstances indicate that a title has a fair value that is less than its
unamortized cost, an impairment loss, in the form of additional amortization expense, is
recognized in the current period for the amount by which the unamortized cost exceeds the
title’s fair value.

Media
Library
The
media library asset represents both the cost of the library of produced videos acquired
through a business combination, and the purchase price of media rights to both video and
audio titles. The media library is being amortized over the estimated useful life of the
titles, which range from five to fifteen years. On an annual basis, or more frequently if
indicators of impairment are identified, management compares estimated future undiscounted
cash flows of the library to its carrying value to determine whether any impairment
exists. If it is determined that impairment exists, the library would be written down to
its estimated fair market value. Fair market value is estimated using the projected
discounted cash flows from the sale of media products and the licensing of media content.
Gaiam has determined that no impairment existed as of December 31, 2004 or in subsequent
reporting periods.

Goodwill
Gaiam
adopted Statement of Financial Accounting Standards (“SFAS”) No. 142,
Goodwill and Other Intangible Assets, effective January 1, 2002. SFAS No. 142
prescribes a two-step method for determining whether an impairment of goodwill exists. In
the first step, we calculated the fair value of our reporting units is using a comparable
companies market multiple approach. If the net book value of the reporting unit exceeds
the fair value, then we would complete the second part of the impairment test would be
completed. Gaiam has allocated all of its goodwill balance of $9.8 million at December 31,
2004 between its two reporting units, business and direct to consumer, in the amounts of
$4.3 million and $5.5 million, respectively. At December 31, 2003, Gaiam allocated
goodwill in the amounts of $4 million and $5.5 million, respectively, to its business and
direct to consumer reporting units. The year-on-year change in goodwill resulted from
foreign currency rate adjustments. Gaiam completed its annual goodwill tests, using
comparable company market multiples to establish the fair value of the reporting units for
each year, and concluded that goodwill was not impaired for either fiscal year.

Long-Lived
Assets
Gaiam
evaluates impairment of its long-lived assets, other than goodwill, in accordance with
SFAS No. 144, Accounting for the  Impairment or Disposal of Long-Lived
Assets. The carrying value of long-lived assets held and used is evaluated when events
or changes in circumstances indicate the carrying value may not be recoverable. The
carrying value of a long-lived asset is considered impaired when the total projected
undiscounted cash flows from such asset are separately identifiable and are less than the
carrying value. Gaiam performs its impairment test at least annually or when circumstances
such as recurring losses indicate an assessment should be performed. Given the recent
losses, Gaiam has performed the required impairment testing. Because of Gaiam’s
strong operating cash flow and expectations of improving financial results, management
does not believe that any impairment existed at December 31, 2004 or in subsequent
reporting periods.

Note 2. Mergers and
Acquisitions, page 33

          3.

          Please tell us and explain in future filings why only a very small portion of
          the purchase price for the acquisition of the  50.1% interest in Leisure
          Systems International was allocated to identifiable intangible assets other than
          goodwill. Similarly,  explain why none of the purchase price for the
          catalogue company acquired during 2002 was allocated to intangible assets other
           than goodwill. As part of your response, please explain how the fair
          value of the various assets acquired and liabilities  assumed was
          determined for purposes of allocating the purchase price and explain what
          consideration was given to allocating the  purchase to other intangibles
          such as customer lists, customer relationships, trademarks, etc. Also, tell us
          and disclose in  future filings the factors that contributed to a
          purchase price resulting in recognition of goodwill. Refer to the requirements
           of paragraph 51b of SFAS No. 141.

Leisure
Systems International (LSI) was a U.K. based distributor of lifestyle products. LSI
purchased a wide array of health and fitness related products from numerous manufacturers
and other distributors, and then resold these products to retailers and institutions. None
of the products sold by LSI were proprietary, and it held only one patent and trademark,
for a product under development. Additionally, LSI did not have contracts with its
customers, and its customer base was highly decentralized and split between retailers and
institutions. In 2002, Gaiam had started a search for a strategic partner to expand its
distribution capabilities into the U.K. and European markets. Gaiam had entered into a
licensing agreement with Universal Studios for distribution of its media in the U.K., but
lacked a U.K. distribution operation or a partner to launch other Gaiam proprietary
products. In 2003, Gaiam purchased the majority interest in LSI with the intent to
transition its distribution to exclusively Gaiam proprietary products. LSI’s value to
Gaiam was its knowledge of U.K. business operations, its distribution capabilities, the
business acumen of its owners and its ability to profitability distribute lifestyle
products within its operating territory. The purchase price was based upon an adjusted
multiple of the earnings of LSI and factored in the identifiable, tangible assets of the
company. By acquiring the majority share of the company, Gaiam was able to retain
LSI’s management and incent them to continue to operate the company efficiently, as
they retained a 49.9% ownership interest in the company. In allocating the purchase price,
Gaiam valued LSI’s receivables, inventory, property and equipment, media library,
intangible assets and liabilities in accordance with the provisions of SFAS No. 141,
paragraphs 36 through 46. The “know-how” purchased in this transaction has
allowed Gaiam to expand its operations internationally (LSI has changed its name to Gaiam
Limited), and the operating results have been accretive to Gaiam’s net income from
the date of acquisition. Gaiam’s costs to start a U.K. distribution company of its
own, both capital expenditures and working capital, and the loss of income produced by
LSI, would have significantly exceeded the goodwill incurred in this purchase transaction.

In
2002, Gaiam paid $600,000 for a 50.1% interest in a travel catalog company, and, since the
company had historically sustained operating losses and had negative net worth of $1.9
million, Gaiam recorded goodwill of $2.5 million. This company utilizes both catalogs and
brochures to attract travelers for its eco-tours. As it is a service provider (primarily
contracting with tour operators, arranging tours, transportation and accommodations) and
all trips are paid in advance by either check or credit card, the company has no accounts
receivable or inventories, and very limited property and equipment. With the operating
losses it had sustained from its inception, the company lived on the cash flow from
advance trip deposits. In accordance with SFAS No. 141, we established the fair value of
both the assets and liabilities and recorded goodwill for the difference between our
portion of the net book value (NBV) and the purchase price. At the time of acquisition, we
evaluated the customer mailing list, and, since only a very small portion of the list
booked travel on more than one occasion and we could find no rental pool for this type of
list, we concluded that it had no value. The value of this acquisition was as an extension
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