GoPro is no longer the hero of Wall Street1/27/2016
During the last 18 months, American eardrums have been beset by the unending sound of Taylor Swift’s massively successful album “1989.” The record has spawned six culture-shaking singles, each with YouTube videos views well into the hundreds of millions. There is little question that Swift is the biggest pop star on the planet. But when you discover that, by the summer of 2015, the album had only sold five million copies in the U.S., something seems off. In a country of 319 million people, it seems odd that the biggest album of the last few years is sitting in less than .01 percent of American homes. The popular-versus-omnipresent phenomena is not uncommon, and in technology, there is no company currently feeling it worse than GoPro.
In October 2014 — when Swift’s album hit shelves — the coolest company in action cameras was the darling of Wall Street. Its stock was worth nearly four times its initial public offering, and traders were ecstatic about the future of the company. Today, a year-and-a-half after making its Wall Street debut at $24, GoPro’s stock is trading at $11 and falling. How could the Taylor Swift of action cameras be valued so low? Doesn’t everyone in America either own a GoPro or want to own one?
Oddly enough, the parallels between Swift and GoPro go even deeper. Some of the most innovative views on YouTube have been shot using GoPro cameras, and the devices are starting to be used in major films like “Transformers” and “The Martian.” However, just because something’s popular doesn’t mean it’s omnipresent. While its cameras are extremely popular among the videography and filmmaking communities, GoPro has never broken through to the mainstream consumer market. Hoping to finally make that transition, it deviated from its landmark “Hero” line of cameras and released a new model dubbed the “Session.” With ease of use in mind and nearly all the features of a traditional GoPro baked in, the new camera seemed destined to fly off store shelves.
If only that had been the case.
The Session was almost an immediate failure, with cameras trickling into the market, generating little buzz. Fingers could be pointed at multiple reasons for its false start, but the big mistake was the price. GoPro has released an upgraded version of its camera almost annually, with a better image, smaller design around $400 to $500. GoPro did not deviate from this sales model with the Session release.
Prosumer level products should come at a higher price point — users are expecting to pay more for a higher-level product. Consumer-level products should be affordable. Why would a casual video taker spend $400 on a new device when he or she can take great video with a smartphone, tablet or point-and-shoot camera? Eventually GoPro realized its error and halved the price of the Session, albeit far too late to inform would-be GoPro buyers before the all-important holiday shopping. So, instead of celebrating millions of good little girls and boys opening up brand new Sessions on Christmas morning, GoPro is panicking from a fatal product launch, laying off 7 percent of its workforce and reassuring angry stockholders it can recover.
Unlike Swift, though, GoPro can’t simply put out new product on a whim. GoPro is a camera company, and a misstep in the only marketplace it operates in can be lethal. If Swift’s next single is a sour one, she could overcome it in a couple months. But if GoPro’s next release doesn’t set the market on fire, it could be curtains for the action camera king. CV
Patrick Boberg is a central Iowa creative media specialist. Follow him on Twitter @PatBoBomb.