GoPro goes production: the newest player in online video?

 

If you’ve seen video of people doing outrageous things, you’ve likely seen the work of a GoPro camera. The company built its reputation on portable, durable, lightweight cameras that could capture “point of view” video during extreme sports, driving, or other active adventures. Now, it seeks to use its reputation to launch an online video streaming service.

This isn’t necessarily a great time for GoPro to take chances. The stock has lost more than two thirds of its value in the past year, and its most recent product offerings have failed to meet sales projections. The company also delayed release of its camera drone line, frustrating consumers and worrying investors.

There’s also a limit to the vertical growth in the action camera market. For most people, the smartphone is the video recorder of choice. It’s a relatively small market segment that needs a standalone action camera. Compared to a smartphone, a GoPro is single-purpose, not to mention more expensive. As bigger companies like Sony and HP get involved in the production of action cameras, GoPro’s ability to dominate the market may be threatened. There’s just not enough market to support that many producers, and the product turnover isn’t high enough to support a dedicated producer over the long term.

Because of these factors, GoPro had to make a move of some kind. The shift into online video is far from the worse choice the company could make. The content it produces will generate revenue on its own as well as provide exposure for the camera brand. Most online video consumers fancy themselves producers as well, so seeing the kind of professional production that’s possible with a GoPro camera may bolster flagging sales.

The company will begin with a slate of exclusive content, including series and standalone shows. The offerings include travel, music, and children’s shows, as well as reality-style programming about soccer, motorcycle cops, and other fast-paced activities. The channel will be available on Red Bull TV, an online streaming service, and the cross-promotion possibilities are certainly intriguing for both companies.

Still, the online video market is already quite crowded. GoPro is a newcomer in a market that includes established titans like Amazon Prime Video, Hulu, and Netflix. While there’s certainly more growth possibility in online video than in digital cameras, the company will face an uphill battle. They’ve been on a hiring binge, snapping up talent from the video production and entertainment industries, in preparation for what will be a difficult struggle.

It’s worth wondering if this is too little, too late to save the company. While sources within the company insist it will return to profitability before year’s end, this move suggests that those projections may not be entirely accurate. Companies that expect to return to profitability don’t launch new business segments out of the blue, particularly not into market sectors that are already fairly saturated. This is a move which smacks of desperation, not long-term thinking.

 

 

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