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January 16, 2009

United States Securities and Exchange Commission

Washington, D.C.  20549

Attention:  Linda Cvrkel

Branch Chief

Division of Corporate Finance

Mail Stop 3561

Re:          Gaiam, Inc.

Form 10-K for the fiscal year ended December 31, 2007

File No. 000-27517

Dear Ms. Cvrkel:

This letter responds to your letter dated December 19, 2008
relating to comments of the staff of the Securities and Exchange Commission
(the “Staff”) in connection with the above referenced filing.  Gaiam, Inc. (the “Company”, “we”, “us”,
“our” or “Gaiam”) responses to the Staff’s comments follow the numbered
comments contained in the December 19, 2008 letter, which we have
reproduced below.  In addition, the
Company acknowledges that:

·                  the Company is
responsible for the adequacy and accuracy of the disclosure in the filing;

·                  Staff comments
or changes to disclosure in response to Staff comments do not foreclose the
Commission from taking any action with respect to the filing; and

·                  the Company may
not assert Staff comments as a defense in any proceedings initiated by the
Commission or any person under federal securities laws of the United States.

Form 10-K for the fiscal year ended December 31, 2007

Financial Statements

Consolidated Balance Sheets, page 30

1.              In future filings,
please revise to separately disclose goodwill on your consolidated balance
sheet as of each period presented.  Refer
to the guidance outlined in paragraph 43 of SFAS No. 142.

Company Response:  In response to the Staff’s comment, we
will in future filings separately disclose goodwill on our consolidated balance
sheet as of each period presented.

Mergers and Acquisitions, page 41

2.              Reference is made to
your fourth paragraph on page 42.
Please explain to us how you accounted for the Share Exchange Agreement
transaction between Cinema Circle, and Spiritual Cinema in your financial
statements.  Please consider providing
journal entries to facilitate your accounting explanation.  As part of your response, please explain how
the equity interest and net assets received by Spiritual Cinema were
valued.  Additionally, tell us if any
gains or losses were recognized in this transaction and provide us with the
related computations, as applicable and the basis for your accounting
treatment.  Finally, please explain to us
how the $6.9 million cost associated with your 85% ownership in Spiritual
Cinema was determined.  We may have
further comments upon receipt of your response.

Company Response:  In response to the Staff’s comment, we
advise the Staff that we accounted for the Share Exchange Agreement as a
business combination. The Share Exchange was recorded as a debit to Investment
in Spiritual Cinema for $6.9 million and a credit to Investment in Cinema
Circle for $6.9 million, with no gain or loss recognition.  Since a quoted market price for Cinema
Circle’s stock was not available, our ownership interest in the equity and net
assets received by Spiritual Cinema was valued based on all aspects of the
transaction, including the negotiations’ intent to make the exchange equal in
value to our recent investment in Cinema Circle.  We restructured our investment in Cinema
Circle by forming a new entity comprised only of the attributes that we
originally wanted to acquire through our investment in Cinema Circle.  For these reasons, we believe that our $6.9
million cash investment in Cinema Circle approximated the estimated fair value
of our 85% ownership interest in Spiritual Cinema.

3.              We note from your
disclosure on page 43 that in connection with your acquisitions during
2007 the majority or approximately eighty percent of the acquisition cost was
recognized as goodwill.  We also note
that this continued to hold true for your business acquisitions during 2008
through the interim period ended September 30, 2008.  Considering the significance of the
respective goodwill recognized in proportion to the total costs of the
aforementioned acquisitions, please explain and disclose in the notes to your
financial statements in future filings the primary reasons for the acquisitions
during 2007 and 2008 and the factors that contributed to purchase prices that
resulted in recognition of goodwill.
Additionally, tell us how you considered paragraph 37, 39 and A14 of
SFAS No. 141, before assigning the majority of the total acquisition cost
to goodwill.

Company Response:  In response to the Staff’s comment, we advise
the Staff and shall disclose in the notes to our financial statements in future
filings that during 2007 and 2008, we acquired businesses in all of our
reporting segments.  The acquisitions in
our direct to consumer segment strengthened our online community and expanded
our offline distribution through print media.
Our business segment acquisitions broadened our professional fitness
product line and increased our distribution channels in the professional
markets.  Our solar segment acquisitions
allowed us to expand our geographic presence in Northern California and
establish a sales office in the sizable Southern California solar installation
market.  The factors that contributed to
purchase prices that resulted in recognition of goodwill were the target
companies’ new and varied

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product and service offerings, anticipated and historical revenue and
increased market share potential through broadened geographical reach and new
market channels.  Additionally, we advise
the Staff that we considered paragraphs 37, 39 and A14 of SFAS No. 141
before assigning the majority of the total acquisition cost to goodwill.  Specifically, we allocated the cost of each
business acquisition to the assets acquired and liabilities assumed, including
separately identifiable intangible assets, based on their estimated fair values
at the date of the acquisition.  The
estimated fair values were derived from various sources and techniques, such as
market information, present value of future economic benefits, and cost to
reconstruct or replace the asset with another of like utility.  For certain business combinations, we used a
valuations professional to assist us and we have elected not to disclose the
use of an expert in our filings.

Note 10, Shareholders’ Equity

4.               We note from the disclosures provided in Note 10 and elsewhere in the
Company’s financial statements that the Company issued shares of its Class A
common stock in connection with various acquisition transactions during the
periods presented in the Company’s financial statements.  In future filings, please revise to disclose
how you valued the shares issued in connection with your various acquisition
transactions.  Refer to the disclosure
requirements outlined in paragraph 51d of SFAS No. 141.  Similar disclosures should also be included
in the notes to the interim financial statements included in your Quarterly
Reports on Form 10-Q.

Company Response:  In response to the Staff’s comment, we will
in future filings disclose that we typically use the closing market price of
our stock on the date of the transaction to value the shares issued in
connection with our various acquisition transactions.

5.               We note the disclosure indicating that in February 2007, the
Company entered into a stock repurchase agreement with Revolution Living and
Alps, under which the Company repurchased 2.5 million of its Class A
common stock from Revolution Living for $13.14 per share or approximately $32.8
million in cash.  We also note that in
connection with this agreement, Jirka Rysavy, the Company’s chairman and
principal or controlling shareholder, primarily through his ownership of the
Company’s Class B shares, purchased for $7.2 million Revolution Living’s
option to acquire approximately 2.3 million of his Gaiam shares at $10 per
share.  We also note that the repurchase
price was calculated as the spread between the negotiated share price for the
Company’s purchase of shares from Revolution Living of $13.14 per share and the
$10 option exercise price.

In this regard, please tell us when the
option to acquire 2.3 million of Jirka Rysavy’s shares was originally granted
to Revolution Living and the accounting treatment used by the Company in
connection with the original grant of this option.  Your response should also explain the basis
or rationale for the treatment used for the option in the Company’s financial
statements.  Refer to guidance outlined
in SAB Topic 5:T.

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Furthermore, please explain why Mr. Rysavy
agreed to repurchase this option from Revolution Living in connection with the
stock purchase agreement between the Company and Revolution Living, and explain
what if any accounting treatment was used in the Company’s financial statements
for the repurchase of the option, as well as the Company’s basis or rationale
for the treatment used.  We may have
further comment upon receipt of your response.

Company Response:  In response to the Staff’s comment, we advise
the Staff that Mr. Rysavy granted the option to acquire 2.3 million of his
shares to Revolution Living on August 4, 2005.  The option was granted in connection with a
strategic relationship between the Company, Mr. Rysavy, Revolutionary
Living’s LIME Media subsidiary, and Mr. Case, owner and chairman of
Revolution Living, whereby Revolutionary Living acquired 2,500,000 shares of
the Company’s Class A common shares at a price of $8.00 per share (approximately
equal to the average of the closing sales prices for Gaiam’s shares for the 30
trading days prior to the transaction).
The Company also agreed to certain other arrangements with Revolution
Living’s LIME Media subsidiary, including electing representatives to each
company’s respective board of directors, and agreed to make a $7.5 million
investment in LIME Media.  As indicated
above, the $10 option exercise price agreed to by Mr. Rysavy and
Revolution Living was approximately 125% of the current trading price for the
Company’s shares.  The transaction
documents relating to this matter were filed as exhibits to the Company’s
current report on Form 8-K filed on August 9, 2005.

As a result of this transaction in 2005, the Company recorded the sale
of the Company’s Class A common shares as stockholders’ equity.  Aside from the consideration received from
the sale of the Company’s shares, the Company did not receive any other
consideration in connection with the transactions with Revolution Living.  The Company did not receive a benefit from Mr. Rysavy’s
granting of the option because the shares underlying the option would have
remained outstanding regardless of whether or not the option was exercised.

Additionally, we advise the Staff that Mr. Rysavy agreed to
repurchase his option from Revolution Living in connection with the stock
purchase agreement between the Company and Revolution Living in February 2007.  At the time, Revolution Living and the
Company were terminating their strategic relationship, and both Mr. Rysavy
and Revolution Living desired to terminate the option in order to complete such
termination.  Revolution Living no longer
desired to have an investment in the Company and the Company and Mr. Rysavy
also determined that it would be advisable to repurchase Revolution Living’s
investment in the Company.  The Company
received no benefit from the termination of the option, as the underlying
shares remained outstanding and unchanged (and would also have remained
outstanding and unchanged had the option been exercised or otherwise
terminated).

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Form 10-Q for the quarterly period ended March 31, 2008

Note 9.  Mergers and
Acquisitions, page 9

6.              We note from your
disclosure that as additional contingent consideration for the Carlson Solar
acquisition, you granted warrants to purchase 30,000 shares of Real Goods
Solar’s Class A common stock at an exercise price of $3.20 per share.  In this regard, please provide us with and
disclose the value assigned to the warrants.
Additionally, please provide us with and disclose your method and
assumption(s) used in determining the value of the warrants.  Also, provide us with and disclose your
accounting as it relates to this contingent consideration transaction,
supported with the applicable accounting literature.  If the values assigned to the warrants have
been included in the purchase price, tell us your rationale for the treatment
used.

Company Response:  In response to the Staff’s comment, we advise
the Staff that there was no cash-based contingent consideration paid or payable
in the Carlson Solar acquisition and that the value assigned to the warrants
issued in the acquisition was $2.77 per share, or a total cost of $83,100,
using the Black-Scholes option pricing model, assuming an exercise price of
$3.20, estimated fair market price of $5.00, annual volatility of 65% based on
a value calculated using the historical volatility of comparable public
companies in Real Goods Solar’s industry, and an expected life of 2.5 years
based on the specific vesting terms, anticipated changes to market value, and
expected exercise behavior.  The warrants
were to vest 50% upon the earlier to occur of the completion of Real Goods
Solar, Inc.’s initial public offering (“IPO”) or a transaction resulting
in Gaiam’s ownership of less than 50% of Real Goods Solar, Inc.’s
outstanding shares, with the remaining 50% of the warrants vesting 2% per month
thereafter.  We recognized this
contingent consideration when Real Goods Solar, Inc. consummated its IPO
on May 13, 2008 as the contingent consideration was then determinable
beyond a reasonable doubt.  In accordance
with EITF No. 95-8, the value assigned to the warrants was included as
part of the purchase price of Carlson Solar because there was no linkage with
continuing employment of the selling shareholders (no employment period
required) and the level of compensation for the selling shareholders was at a
reasonable level in comparison to that of other key employees.

We did not previously disclose in our public filings the assigned
value, valuation method and assumptions, and our accounting as it relates to
these contingent warrants because the value of the warrants was considered
immaterial for Gaiam’s consolidated financial statements.  We note that most of this information was
disclosed in various Real Goods Solar, Inc. public filings (Prospectus,
Note 11.  Subsequent Events, page F-17;
Form 10-Q for the quarterly period ended March 31, 2008, Note 7.  Mergers and Acquisitions, page 7; and Form 10-Q
for the quarterly period ended June 30, 2008, Note 6.  Mergers and Acquisitions, page 7).

Form 10-Q for the quarterly period ended September 30, 2008

Condensed Consolidated Statements of Cash Flows, page 6

7.              Please tell us why
you have presented the $31.4 million gain on issuance of subsidiary stock on a
net tax basis in your statement of cash flows rather than on a gross
basis.

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Also, explain why this
presentation is inconsistent with that in your Form 10-Q for the quarterly
period ended June 30, 2008.

Company Response:
In response to the Staff’s comment, we advise the Staff that we
presented the $31.4 million gain on issuance of subsidiary stock on a net tax
basis because the gain generated such a significant deferred tax liability that
we believed that it was more meaningful and transparent to the reader to
present the gain with the transaction that generated the deferred tax liability
rather than combine it with other deferred tax assets and liabilities generated
through operations.  We believe the net
tax basis presentation in our Form 10-Q for the quarterly period ended September 30,
2008 was an improvement over the gross presentation in our Form 10-Q for
the quarterly period ended June 30, 2008.

Note
4. Impairment of Assets, page 8

8.              We note
from your disclosure that you impaired a portion of media li