A little bull case for GoPro

The bull case for GoPro maybe buried in its recent partnership announcement with NFL. The first wave of GoPro growth comes with its popularity among extreme sports enthusiasts - skiing, surfing, skydiving, mountain biking, etc. But if major sports such as hockey, football, and basketball start using GoPro, then it creates a massive reach to broader consumers at a scale unseen before. Think Red Bull vs. Coca Cola. However, I still think that seeing athletes wearing GoPro cameras at Super Bowl is unlikely. Athletes safety, content ownership, endorsement are just a small number of the many considerations multiple parties need to address before an actual deployment. It all boils down to the interests to different parties? Who benefit the most from such user? GoPro, obviously, will gain the most, from media coverage and subsequent push in sales. Perhaps it can realize its promise of transforming into a media content company. For professional sports associations and teams, the issue gets a bit more complex, and therefore worth a closer look. 

Professional sports associations such as NBA, NFL, and MLB typically implement a revenues sharing program, where each team is required to hand in a % of its revenues into a pool, then the league will redistribute the pooled fund among the teams and sometimes devote the funds to marketing campaigns that promotes the sports. The source of revenues are media revenues (mostly regional and national broadcast), ticket sales, concession, and licensed merchandise. 

GoPro today is device maker with a very limited proprietary media presence. The distribution of its content is largely dependent on third parties such as youtube, Facebook and instagram. So it really has very little negotiation power against sports teams and broadcasting companies. But if GoPro finds a way to make money off the content deals with sports teams (so that they can share the revenues or have positive return on investments they made in teams), then it may get interesting. But making money off on-line video ads is certainly not an attractive enough option for them now. 

For teams, GoPro’s camera enable them to present themselves in a new angle, but Sony or Casio camera can also provide the “new angles”. The biggest advantage is the much bigger social media presence GoPro can leverage - in a way it holds the promise of free viral marketing for the teams. The social media aspect of GoPro’s business is currently unrivaled by Sony or any other camera makers. 

GoPro is a marketing company

Let’s face it, GPRO does not make great cameras. The company at its core is a genius marketing machine that successfully created a cult user following among sports enthusiasts, and then a global distribution network that reaches this target audience. Since earlier 2014, it even started to generate popularity among regular consumers. The perception of its product is so well curated that it becomes synonym with action sports and active lifestyle.

That all perception aside, I have to say it makes crappy camera and even worse software. Its profound success was largely dependent on timing - it had the right product at the right time, and for a good period of 5 years, its target market is small enough to avoid the attention of major consumer electronics OEMs. 

GoPro has a content strategy. For now, it is not making money from the content created with its cameras. But another obvious reason to promote the content is that those viral videos of epic moments help to sell the camera to more people. But regular consumers rarely realize two facts: 1) those videos are often recorded and edited by professional hands, and 2) without the daredevil acts and breath-taking backdrop of some remote mountains, your daily life recorded will go no where close to be comparable to those GoPro channel videos. I foresee major disillusions from consumers  when they realize how difficult it is to make quality videos with amateur hands, and how clumsy and unpractical GoPro is as a regular, everyday camera. 

As a company making 100% of the money from its hardware sales, it is surprising how little resource GoPro put to research and development, or the actual making of the camera. We have seen 4 maybe 5 major iterations of the original camera design, but yet it is still lacking image stabilization features, a critical feature for action camera if you want clear, crispy images. If we move non-critical features such as connectivity, app support, and editing software, the incompetency is orders of magnitude greater. And yet those non-critical, non-image capturing related features largely defined the happiness of its average consumer users: how well and convenient they can share the video, how closely they can couple the phone with the camera, and how easily they can edit the random video clips into a remotely watchable film. So far, instead of focusing on making a solid product experience (better hardware and software), it again focus mostly of its energy on making a great branding experience. The greater consumer perception is, the more disappointed consumers will be once they lay their hands on the actual product. If GoPro wants to make its cameras a true must-have to capture the everyday moments. GoPro must refocus on the product itself. Without great product, one cannot create great experience, and let alone a viable ecosystem, which is essential for its long-term survival. 

And in the long-term, smartphone cameras and its durability will get so good, that regular consumers will never need a separate action cam to record their bike rides, scuba dive or ski trips. Action cam will be forever confined to the action sports crowd.