Thursday, March 06, 2014

GoPro: Succeeding by sticking to its knitting

Let me introduce you to Bigbird, a juvenile pelican that was orphaned and abandoned by its flock, and washed up on the beach at the Greystoke Mahale resort in Tanzania. The resort's staff took care of Bigbird--which included teaching the pelican how to fly. The resort's team of "pelican trainers" mounted a GoPro sport camera on Bigbird's beak, and the camera captured the bird's process of learning how to flap its wings while simultaneously running down the beach. Most importantly, it captured Bigbird's first flight.

That video, which was taken by the Greystoke Mahale's staff, was edited by GoPro, and you can watch it on YouTube. You can also watch two deer be rescued from a frozen lake in Minnesota, or a kitten rescued from a burning building and resuscitated by a Fresno, CA fireman. If you can keep from crying after watching any of these videos, you're stronger than I am. If you want something a little more exciting, you can watch people snow skiing, snowboarding, water skiing, surfboarding, skateboarding, mountain biking, racing superbikes, racing cars, and much more, all from a first-person perspective. In fact, if you can name a sport or outdoor activity, it's probably been captured by a GoPro camera and can be found by searching on YouTube.

GoPro is arguably the most successful camera company in the world--they've certainly done more with fewer models than anyone else. The company exclusively makes sports cameras--small, rugged, inexpensive video cameras that nevertheless produce high-quality images. At any one time, GoPro only sells three models; currently, they sell two versions of their top-of-the-line Hero 3+ cameras, and they sell one model of their previous-generation Hero 3 line as their entry-level model. Prices range from $199 to $399. In addition, GoPro sells a range of accessories that allow the cameras to be mounted just about anywhere, and to be protected from just about any conditions (short of placing them in an oven.) The accessories for the Hero 3 and 3+ series are identical, so customers who purchased Hero 3 models can upgrade to a Hero 3+ and use all of their existing accessories.

By comparison, GoPro's biggest competitors--Sony and JVC--sell sport cameras as a sideline. For example, Sony sells full lines of point & shoot cameras, DSLRs, ILCs and camcorders, not to mention its line of professional camcorders and cinema cameras. And, in there somewhere, it's got two sport cameras. JVC is in a similar situation; its two-model ADIXXION line of sport cameras are a small part of a much bigger line of camcorders. GoPro has been able to keep ahead of its competitors, both big and small, with its laser-like focus on features that are of value to its target market of active sportspeople. Sony and JVC may each have a single product manager focusing on that market, while GoPro's entire company is focused there.

One way that GoPro keeps on top of its customers' needs is to watch videos that they make--and it gets thousands of them. Most of the videos featured on GoPro's website and YouTube site were produced not by GoPro but by its customers. So many people are producing videos with their GoPro cameras, and the videos are so popular (especially after being edited and enhanced with music by the GoPro team) that the company is launching its own branded media channels. It provides an in-flight video channel to Virgin America, and plans to launch a video channel on Microsoft's Xbox One and Xbox 360 game consoles this summer. A GoPro-branded media channel separate from YouTube is likely in the near future; such a channel would enable GoPro to fully monetize its videos, and cement customer loyalty by sharing advertising revenues with video submitters.

Last month, GoPro made a private IPO filing with the U.S. Securities and Exchange Commission. We don't yet know how much money the company plans to raise or how much of the company it plans to sell, but most observers believe that the IPO proceeds will, at least in part, be used to fund new products and the development of GoPro's media channels. By focusing on a small slice of the camera market, GoPro has built a big business and a cadre of loyal customers that's producing the content for a whole new business opportunity.

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