What happened to GoPro

GoPro revived a market everyone had written off. Smartphones had reduced the digital camera war between Sony, Nikon, Canon and Fuji to scraps by the late 2000s. GoPro came back at it from an angle phones could not follow — compact, rugged, waterproof, mountable — and made cameras that survived space, ocean, volcanoes and Everest.

It owned the category so completely it became the noun. GoPro was the name of the product, the company, and the generic label for any small action camera on the market. Its footage was identifiable on sight from the fish-eye point-of-view alone.

And the marketing was free. Early users were paid in internet fame; their viral videos recruited the next buyers, who shot more footage, which reached more people. GoPro described it as a flywheel where adoption drove awareness drove sales — and it saved the company millions, because it never had to argue that GoPro was cool.

The flywheel even worked in the aisle. GoPro built point-of-purchase displays up to 12 feet wide with screens playing an endless reel of user footage, so a shopper who had never seen it got shown it. Other brands wanted the same effect: Marriott lent GoPros to resort guests, LG ran GoPro clips on its 4K TVs in stores, and channels appeared on Xbox, Roku, Pinterest, Twitter and Virgin America.

Which convinced the company it was a media business. GoPro built an entertainment division of 200 people and hired the former CEO of Skype, an 11-time Emmy-winning HBO VP, an MTV SVP and Hulu's Head of Original Content, to license user footage and build narrative series. This was 2014, when Netflix had just shipped House of Cards and original content was the hottest idea in entertainment.

The IPO was genuinely earned. Revenue went from $65M in 2010 to $1.62B in 2015 and units shipped quintupled, in a category where every legacy camera brand was shrinking. Unlike its 2014 IPO peers, GoPro was profitable.

Then growth halved in a single year — from 41% in 2014 to 16% in 2015 — while shipping a record number of cameras. Entertainment overhead and a six-camera lineup selling below expectations took profitability with it.

The HERO4 Session was the tell and the company misread it. Nobody would pay $399 for a display-less, lower-resolution camera when the HERO4 Silver cost the same with a touchscreen and better video. Sales only moved when the price was cut to $199, four months after launch.

The founder's conclusion was that a lower price grows the market, which is not how markets work. Price changes accessibility, not size — Apple raising the iPhone price does not shrink the smartphone market. What the Session actually revealed is that GoPro's buyers had moved from early majority to late: feature-driven, price-aware, and no longer buying whatever shipped.

Six SKUs then paralysed everyone. The Hero4 Black at $499, Silver at $399, Session at $399, Hero+ LCD at $299 and HERO at $129 overwhelmed shoppers and retailers alike. GoPro killed three of them within a year and left the entry-level market at a $60 million loss, conceding that too much choice makes customers buy nothing.

Karma was the worst kind of late. GoPro's $1,000 drone arrived against a DJI that had done to drones what GoPro did to action cameras — and arrived worse: 18 minutes of flight against the Phantom's 27 and Mavic's 28, 3km of range against 5-7km, and 5-10 mph slower. Being late is unwise; arriving inferior at the same price is reckless.

Then it fell out of the sky. Two weeks after launch, Karmas began losing power mid-flight and crashing, users filmed it, and GoPro recalled every unit — unable to explain the fault. By the relaunch three months later the drone market itself was collapsing under regulation and consolidation. The entire aerial business lasted 10 months.

2016 is where it all landed at once. Revenue fell from $1.62B to $1.19B, the company lost $419 million, the entertainment division was gutted with all 200 laid off and over $30 million paid in severance, and another $200M of annual operating expense was cut by outsourcing software and accounting to Romania and the Philippines.

The answer it kept reaching for was easier editing, and that was the wrong stage. The workflow is capture, transfer, edit, upload, share. Editing is the most laborious step, but capture is the hardest — it needs a premeditated activity, known timing, known lighting and someone to film. Most people fail there and never reach editing, so QuikStories, a straight lift of Instagram and Snapchat, changed nothing.

When it finally listened to power users, the product got better immediately. HyperSmooth stabilisation removed the need for a gimbal, microphones improved underwater and in wind, the rear touchscreen was redesigned, and built-in fingers removed the mounting frame. The HERO7 and HERO8 sold better than anything in years — after a decade of chasing a mainstream that was never coming.

The present business is smaller than the one it IPO'd with. GoPro grossed $1.09B in 2022, less than in 2014 in nominal terms and far less in real ones, on under 3 million units — a 35% fall in five years. The 2021 net income of $370M was mostly a $280M tax benefit; operations produced $55M. The company has announced a $100 million buyback, which at that price would buy roughly a quarter of itself.