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February 8, 2006

     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-Q for the Quarter Ended September 30, 2005

File No. 0-27517

Dear Ms. Tress and Ms. Cvrkel:

        This
letter responds to your letter dated December 21, 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 December 21, 2005 letter, which we have
reproduced below.

Quarterly Report on Form
10-Q for the quarter ended September 30, 2005
Notes to Interim
Condensed Consolidated Financial Statements, page 7Note
2. Mergers and Acquisitions,
page 9

          1.

          It is unclear to us as to the nature of the acquisition of Good Times in
          September 2005. Please tell us and disclose in  future filings to what
          extent you acquired control of and percentage of equity interests in Good Times
          through the acquisition.  If you did not acquire control, please tell us
          how the transaction properly reflects a business combination under SFAS 141
          rather  than a purchase of assets. If a business was not acquired, please
          explain why you believe it was appropriate to recognize  goodwill. Refer
          to the related guidance in EITF 98-3. Include in your response any liabilities
          assumed as part of the  acquisition.

On
July 8, 2005, Gaiam entered into an Asset Purchase Agreement with GT Brands LLC, GT
Merchandising & Licensing LLC, Gym Time, LLC, BSBP Productions LLC and GoodTimes
Entertainment LLC (collectively “GoodTimes”) pursuant to which Gaiam agreed to
purchase certain assets of GoodTimes relating to GoodTimes’ independent home video
entertainment business and to assume certain specified liabilities associated with media
and software licenses and contracts to be assigned by GoodTimes to subsidiaries of Gaiam.
GoodTimes agreed to file voluntary petitions commencing chapter 11 bankruptcy cases and to
file a motion with the Bankruptcy Court for a 363/365 Order authorizing and approving (1)
the sales of the assets under section 363 of the Bankruptcy Code and (2) the assumption
and assignment of specified contracts under section 365 of the Bankruptcy Code. The Asset
Purchase Agreement was amended on September 8, 2005, and, upon approval of the bankruptcy
court, the closing of the asset purchase took place on September 13, 2005.

Gaiam
did not acquire an equity interest in any of the GoodTimes entities, and those entities
continue under the auspices of the bankruptcy court. Gaiam acquired inventory and prepaid
royalties and media associated with content and talent licenses/contracts assigned to
Gaiam along with the rights to future usage of the subject content, and Gaiam assumed
liabilities for royalties due under these assigned agreements. Additionally, Gaiam
purchased the right to receive payments from certain accounts receivable held by
GoodTimes, a nominal amount of tangible personal property and other assets. The remainder
of the inventory, receivables, personal property and other assets, including all of the
cash and cash equivalents held by GoodTimes, remained the property of GoodTimes. Gaiam did
not assume any of the real property or personal property leases of GoodTimes, nor did
Gaiam assume any of the employment contracts, the collective bargaining arrangement, or
benefit contracts of GoodTimes.

In
response to your comment, we have revisited the requirements of SFAS 141 and the related
guidance in EITF 98-3, and we have concluded that it is appropriate to treat the
transaction as an asset acquisition, rather than a business combination. As you are aware,
EITF 98-3 defines a business as a “self-sustaining integrated set of activities and
assets conducted and managed for the purpose of providing a return to investors. A
business consists of (a) inputs, (b) processes applied to those inputs, and (c) resulting
outputs that are used to generate revenues. For a transferred set of activities and assets
to be a business, it must contain all of the inputs and processes necessary for it to
continue to conduct normal operations after the transferred set is separated from the
transferor, which includes the ability to sustain a revenue stream by providing its
outputs to customers.” Our asset acquisition did not meet these criteria, as we would
not be able to sustain a revenue stream with only the assets acquired. As such, we are
revising our accounting treatment of this acquisition to eliminate goodwill and fully
allocate the purchase price to the assets acquired. We have undertaken an extensive
analysis of the assets acquired in order to determine the appropriate valuations, and we
expect to complete the revised purchase price allocation later this month. In Gaiam’s
next periodic report on Form 10-K, to be filed in March 2006, and in all future filings,
we will amend our financial statement presentation and related disclosures to reflect this
as an acquisition of assets.

          2.

          If the acquisition of GoodTimes represents a business combination, please
          revise to include the pro forma disclosures  required by paragraphs 54,
          55 and 58 of SFAS No. 141, as applicable.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, this comment is no longer applicable.

          3.

          Also, please revise to disclose the factors that contributed to a purchase
          price resulting in recognition of goodwill.  Refer to the requirements of
          paragraph 51b of SFAS NO. 141.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, this comment is no longer applicable, as no
goodwill will be recorded.

Periodic Report on Form
8-K/A filed November 29, 2005
Exhibit 99.1 GT Brands LLC Financial Statements

          4.

          If it is determined that the acquisition of Good Times was a business
          combination, please amend your 8-K/A to include the  audit report for all
          periods presented in the financial statements of GT Brands LLC. Refer to
          Regulation S-X, Articles 3-05.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, this comment is no longer applicable.

          5.

          If it is determined that the acquisition of Good Times was a business
          combination, please amend your 8-K/A to also include  financials through
          the most recent interim period, as applicable of GT Brands LLC. Refer to
          Regulation S-X, Article 3-05(b) (2).

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, this comment is no longer applicable.

          6.

          Please tell us and clarify in an amended Form 8-K why you have included
          financial statements for both GT Brands LLC and  Subsidiaries and GT
          Brands Holdings LLC and Subsidiaries for 2003 in you Form 8-K filing. Your
          revised Form 8-K should clearly  explain the nature of the assets or
          interest acquired in your recent acquisition transaction and should explain why
          financial  statements for both entities have been provided. We may have
          further comment upon receipt of your response.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.1, as this information is no longer required or applicable.

Financial Statements of
GT Brands LLC and Subsidiaries

          7.

          Revise the statements of operations of GT Brands LLC and Subsidiaries to
          eliminate the subtitle “Loss from Operations before  Impairment of
          Goodwill and Intangible Assets: as the presentation of this subtotal is not
          appropriate. Refer to the guidance  outlined in SAB Topic 5:P, Question
          2. The pro forma statements of operations included in your Form 8-K/A should be
          similarly  revised.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.1, as this information is no longer required or applicable.

Exhibit 99.2 Pro Forma
Financial Statements
Pro Forma Statements of Operations

          8.

          Revise to eliminate the pro forma adjustments (4) and (5) eliminating
          impairment of goodwill and intangible assets and the  gain on sale of
          REPS LLC. As these events or transactions occurred prior to the acquisition of
          GoodTimes Entertainment and were  reflected in its historical financial
          statements prior to the acquisition, they are not directly attributable to the
          acquisition  transaction and should not be eliminated through pro forma
          adjustments. Refer to the guidance outlined in Rule 11-02(b) (6) of
          Regulation S-X. Please note however that the notes to the pro forma
          statements of operations should however disclose that the  pro forma
          results of operations include these transactions. See Rule 11-02(c) (4) of
          Regulation S-X.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.2, as this information is no longer required or applicable.

Notes to Unaudited Pro
Forma Condensed Combined Statements of Operations

          9.

          Your disclosure in the notes to the pro forma statements indicate that you
          have not adjusted to reflect the exclusion of  revenue and expenses
          related to those titles which Gaiam did not acquire from GT. Please revise to
          exclude the revenue and  operating results associated with these
          contracts and titles not acquired or explain why you believe your current
          presentation is  appropriate.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.2, as this information is no longer required or applicable.

          10.

          Refer to Note 3 – Please revise to disclose the useful lives used to
          determine the amortization expense associated with each  category of
          intangible assets acquired in connection with the acquisition of GoodTimes
          Entertainment.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.2, as this information is no longer required or applicable.

          11.

          Refer to Note 6 – Please expand your footnote disclosure to clarify why
          this adjustment is factually supportable and  directly attributable to
          the acquisition transaction. If this is because the GoodTimes debt was not
          assumed by the Company,  please state this is your revised disclosure.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.2, as this information is no longer required or applicable.

          12.

          Refer to Note 7 – Please expand Note 7 to explain the Company’s
          basis for the conclusion that a tax benefit on losses  incurred by
          GoodTimes during 2004 and the nine months ended September 30, 2005 should be
          recognized since management believes it  will be able to use the net
          operating loss carryforwards from these periods to offset future taxable income.

As
we are revising our treatment of the GoodTimes acquisition to reflect it as an acquisition
of assets rather than a business combination, we will file an amended Form 8-K deleting
Exhibit 99.2, as this information is no longer required or applicable.

We
appreciate your comments and your assistance in helping us to comply with the applicable
disclosure requirements and to enhance our overall filing disclosures. We acknowledge that
Gaiam and its management are responsible for the adequacy and accuracy of the disclosure
in our filings, that staff comments or changes to disclosures in response to staff
comments do not foreclose the Commission from taking any action with respect to the
filing; and that Gaiam may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the United
States. Should you have any further questions, suggestions or need additional information,
please feel free to contact me at (303) 222-3758. Thank you again for your assistance.

     Regards,

/s/ Janet Mathews

Janet Mathews

Chief Financial Officer