Woodman also mentioned GoPro’s major presence on YouTube. Last year, it uploaded nearly four years of user videos to the service. Underscoring the appeal of that video, he said that YouTube viewers spent 59% more time watching those clips on that than the previous year.

“That is a media movement,” Woodman said.

More television and online streaming is coming, Woodman promised But he emphasized that GoPro’s primary goal is for camera owners to shoot more video and to make it easier for them to upload those clips online, watch them and share them.

YouTube: 1 Billion Viewers, No Profit

Revenue growing at Google video site, but still limited by narrow audience

Feb. 25, 2015

Google Inc. nurtured YouTube into a cultural phenomenon, attracting more than one billion users each month. Still, YouTube hasn’t become a profitable business.

The online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier, according to two people familiar with its financials, as advertiser-friendly moves enticed some big brands to spend more. But while YouTube accounted for about 6% of Google’s overall sales last year, it didn’t contribute to earnings. After paying for content, and the equipment to deliver speedy videos, YouTube’s bottom line is “roughly break-even,” according to a person with knowledge of the figure.

By comparison, Facebook Inc. generated more than $12 billion in revenue, and nearly $3 billion in profit, from its 1.3 billion users last year.

The results reflect YouTube’s struggles to expand its core audience beyond teens and tweens. Many YouTube users treat the site as a video repository to be accessed from links or embedded video players posted elsewhere, rather than visiting YouTube.com daily.

Music videos are its most popular content. YouTube’s stars remain relatively unknown. Felix “PewDiePie” Kjellberg is the biggest star, with 35 million subscribers to his wacky videogame montages.

GoPro's Hero 4 Session is its smallest camera ever

One-button shooting and a tiny little body

Strapped to my hand was GoPro’s new camera: the $399 Hero 4 Session, available next week. It’s cube-shaped and measures less than 1.5 inches long on every side. It shoots 1440p video at 30 frames per second, 1080p up to 60 frames per second, and 720p up to 100 frames per second. It’s waterproof up to 10 meters so it doesn’t require a bulky housing.



The Session is extremely simple to use: you start and stop it with just one press of a button. In fact, the Session only has two buttons. The main one is a red, circular button found on the top side of the camera. Tap it, and the Session turns on and starts recording. Tap it again to stop recording, and the Session turns off.

This helps with battery life — a problem GoPro has long battled with its cameras. The Session’s internal battery should last between one to two hours running consistently, but turning it on and off each time stretches the battery life much further. When I started the hour-and-a-half rafting trip, the Session had two-thirds of its battery life remaining, and by the end, it had outlasted a fully charged Hero 4 Black and Hero+ LCD.

A 3-second press-and-hold on the main button will trigger a time-lapse photo mode. If you want to shoot single or burst photos, however, you have to change to these modes in the GoPro app. The only other button on the Session is for turning the camera’s Wi-Fi on and off.

In fact, to change any settings on the Session, you have to use GoPro’s app or the included Wi-Fi remote. That’s probably for the best, considering there are only two buttons and just one tiny screen on the camera. But GoPro has improved the ease of its on-camera menu system over the years, so if you’ve gotten used to changing your settings on the fly, it could take some time to acclimate to the Session.

One of the biggest benefits of the Session’s small size is how much harder it is to notice, no matter where you mount it. GoPro has also slimmed down its cameras over the years — the Hero 4 Black and Silver, in particular, are very light and small — but when you snap them into a housing and mount them to a helmet or to your wrist, you definitely still feel them when you’re moving around.

The Session, on the other hand, is waterproof out of the box. It does use a small skeleton case (much like the frame mount the company sells for its bigger Hero cameras, but cubed) in order to attach it to the various mounts. I mounted it to my hand during our rafting trip and could barely feel it as we sped down the river. A bigger Hero 4 stuck inside a waterproof housing would have been much more cumbersome.

Ditching the need for a housing also solves another long-standing problem with GoPro's cameras: the audio. The Session has two microphones — one on the front, and one on the back — and it dynamically switches between them to reduces wind noise. They never get muffled, and they're built to drain liquid fast, so the audio even sounds good when the camera comes out from underwater.

As small as it looks on its own, when you place a Session next to a naked Hero 4 Black or Silver, they don’t look that much different. Put them in their various mounts and cases, though, and you can’t help but notice how much space the Session saves you.



GoPro CEO Nick Woodman says the company worked on the Hero 4 Session for three years, but some tradeoffs still had to be made in order to condense it to such a small size. It can’t shoot in 4K. It can’t shoot in incredibly high frame rates such as 120 or 240 frames per second, which limits your options for shooting in slow motion. And it only takes 8MP still photos — a resolution your phone can likely match or beat.

If you don’t already own an action camera, the Session might not be the first one to buy. For example, there’s GoPro’s own Hero 4 Silver, which is priced the same and is definitely more robust. The Silver has a built-in touchscreen LCD screen, can shoot video up to 2.7K at 30 frames per second, and at 720p can shoot in 120 frames per second slow motion. The Hero 4 Silver also shoots higher resolution stills — 12MP to the Session’s 8MP — and can take them much faster, reaching speeds of up to 30 images per second.

But there’s a lot to love about the size and simplicity of the Session. It fits in so many more places, the battery will last longer than any other GoPro (though it can’t be swapped), and if you’re not obsessive about frame rates and resolutions you’ll probably be just fine with the excellent 1080p/1440p footage it does capture. All of this is certainly the bet that GoPro is making with the Session. "I think this is going to expand our customer base," Woodman says. "I think a lot of people still scratch their head when they look at our cameras."

GoPro: Investing as an Extreme Sport

Danger lurks as others enter the market for action cameras. Shares could fall more, to $25.

September 19, 2015

Google “GoPro video,” and you’ll find countless examples of athletic pursuits and extreme sports. You’ll also find dramatic falls. The latest is a GoPro camera’s lonely plunge from 100,000 feet in space. The camera survived the impact with footage still rolling. But while GoPro makes durable and impressive products, the stock’s landing hasn’t been so soft.

Since peaking at $98 in October, GoPro (ticker: GPRO) shares have crashed back to Earth, to a recent $35. Analysts see a buying opportunity. The most bearish price target on the Street is $48, upside of 37% from current levels. But that’s wishful thinking. History hasn’t been kind to one-product wonders like GoPro, which now dominates the market for video cameras. Blackberry once had a similar perch in smartphones. So did Palm in the days of digital organizers. And Flip, an impressive video camera in its own right, surged in popularity until it was usurped by cellphone cameras.

At 18 times forward earnings, GoPro shares are no longer sky-high. But the risk hasn’t changed.

Rob Lopez, the head of institutional sales for Vertical Group, an independent research firm, says that sell-side analysts have remained steadfastly optimistic, even as more investors have come to understand GoPro’s problems. His firm removed its Sell rating on GoPro shares last week after they touched the firm’s price target of $33. Still, Lopez concedes that the “secular and structural concerns” about GoPro are very much intact, especially with its latest product launch—a tiny camera called the Hero4 Session—underwhelming consumers.

Vertical estimates that earnings could grow 12% next year, and Lopez thinks that growth rate should be a rough approximation for the price/earnings ratio. The firm has been right about GoPro, holding onto a mid-$30s price target even as the stock rose and fell. If investors come around to a similar viewpoint, the stock could trade down to $25.

While analysts are bullish, investors are clearly skittish about the company’s ability to ward off competition, notably from Apple (AAPL). At least twice in the past nine months, GoPro shares have tumbled on Apple-related news. In January, the mere issuance of a camera-related patent to Apple sent GoPro shares down 12%.

Even seemingly positive news from Apple has been overlooked. At the company’s keynote address a few weeks ago, it added GoPro support to its Apple Watch, enabling the watch to serve as a viewfinder for GoPro cameras. But Apple also upgraded the camera in its iPhone to a 12-megapixel sensor capable of producing high-resolution 4K video. GoPro shares tumbled 10% on the news.

And it’s not just Apple that causes concern. Sony (SNE) makes image sensors for GoPro’s cameras, which puts GoPro in a vulnerable spot, considering that Sony sells its own wearable action cam. And earlier this month, Alcatel OneTouch, a unit of China-based TCL Communications, announced a new waterproof smartphone called the Go Play. Taking on GoPro directly, the news release boasts, “The Go Play is not only waterproof, it shoots pictures and videos underwater.”

THERE ARE STILL LOTS of fans for GoPro’s devices. Analysts expect revenue to jump 39% this year, though sales growth is likely to slow to 19% in 2016, to $2.31 billion, with earnings decelerating, as well, to $249 million, or $2.08 a share. Sales have no doubt been boosted by the company’s surging retail footprint. Some 40,000 stores now sell GoPro cameras, up from 25,000 18 months ago. Vertical argues that its retail base could be reaching saturation, considering that Netgear (NTGR), a longtime maker of consumer electronics, has seen its retail base settle at about 44,000 stores.

GoPro has already amassed a substantial short position—some 18% of the float—so there’s a risk to being negative on the stock. Any positive news could cause a “short squeeze” as short sellers rush to cover their positions, effectively bidding up GoPro’s price. Also, there’s the possibility that an acquirer could come along. There’s no question that GoPro, which has a market value of $4.6 billion, has built an impressive brand name.

Some analysts have suggested that Apple could be interested in buying GoPro, but again, that’s wishful thinking. Vertical’s take on an Apple buyout? “I would ascribe zero percent chance,” says Jon Lopez, Vertical’s research head, noting that Apple has ample resources to build the product in-house. And that assumes the iPhone doesn’t put GoPro out of business on its own.

To GoPro’s ardent fan base, any comparison with smartphones is sacrilege. A year ago, the blogosphere reacted strongly to a skeptical story in this magazine, which noted smartphones’ history of subsuming stand-alone gadgets. “Saying smartphones will replace [GoPro] is like saying the Army will someday replace tanks with sedans,” tech site Gizmodo argued.

It’s actually a revealing metaphor, when you consider that the family sedan has been replaced by do-everything sport utility vehicles. In that sense, smartphones are following an SUV-like evolution. And GoPro runs the risk of being driven off the road.

Morgan Stanley Cuts PT on GoPro (GPRO) to $35; Light Session Sales Could Foretell Future Disappointments

Morgan Stanley cuts its price target on GoPro (NASDAQ: GPRO) from $62 down to $35 and maintains an Equalweight rating.

Analyst James E Faucette and his team see disappointing HERO4 Session sales as a potential harbinger of upcoming disappointments for GoPro.

Faucette commented,While Faucette also sees GoPro's video editing and sharing features as steps in the right direction, the analyst noted that the platforms trail features that are already available on Android and iOS.the analyst said.

Faucette also sees media and software monetization as small over the next several years, saying,The firm cuts its Q3 and FY15 revenue and EPS estimates from $44 million/$0.31 and $2.0 billion/$1.80 down to $424 million/$0.21 and $1.9 billion/$1.39, respectively.

Teens cool with Apple, but with GoPro they can't even

U.S. teens still love Apple, but they're like so over GoPro, according to a new survey. Piper Jaffray surveyed 9,400 teens nationwide for its semiannual Taking Stock With Teens poll. It released the results late Tuesday.
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GoPro Demand Slowing With Teens

The teen survey offered downbeat data for action-camera maker GoPro.

GoPro is still top-of-mind among teens, but purchase intent is decelerating, Piper Jaffray analyst Erinn Murphy said in a report. In the fall survey, 1.1% of teens listed a GoPro as a top-two gift wish this upcoming holiday season, a deceleration from 1.6% in the spring.

Family ownership of GoPro cameras is at 19.8% now vs. 17.9% in the spring survey, she said.

Murphy downgraded GoPro stock late Tuesday to neutral from overweight, based in part on the survey results. She also slashed her price target to 25 from 54.

GoPro estimates slashed on slowdown in camera demand

With negative sentiment weighing on GoPro stock, Dougherty & Company analyst Charles Anderson on Tuesday slashed his price target to 32 from 70.

Anderson, though, also reiterated his buy rating on GoPro stock due to its current valuation.

"While we continue to believe in the power of GoPro's brand and the headroom the company has to innovate (360-degree capture, quadcopter/drones), near-term trends are forcing us to lower the bar," Anderson said in a report.

Anderson lowered his sales and earnings estimates for GoPro, given lower-than-expected Hero 4 Session camera sales and "unfavorable sell-through indicators" such as Google searches and app downloads.

"We are cutting our second-half 2015, fiscal 2016 and fiscal 2017 camera revenue estimates significantly in the face of overwhelming evidence of a slowdown in demand for GoPro cameras," Anderson said. "Thus, we expect GoPro to miss third-quarter 2015 estimates and guide below consensus for Q4 2015."

Providing a buffer to declining GoPro camera sales is the company's planned launch in the first half of 2016 of an aerial drone that can act as a flying camera, Anderson said.

"GoPro has the opportunity to transform the category from niche to mass-market due to its brand and distribution strength," Anderson said.

He estimates GoPro will take 5% of the quadcopter/drone market in 2016 and 10% in 2017. That equates to drone revenue for GoPro of $72 million in the second half of 2016 and $228 million in fiscal 2017, he said.

GoPro Chief Executive Officer Nicholas Woodman said that the quarter was "clearly more difficult than anticipated." The company did not provide an update to its fourth-quarter or full-year outlooks.

GoPro's stock drops after analyst slashes rating, price target

GoPro Inc.'s stock slumped 3.1% in premarket trade Friday, after the wearable action-camera maker was downgraded at RW Baird, which cited increasing concerns over the lack of sales growth. Analyst William Power cut his rating to neutral, after being at outperform for more than eight months. He also slashed his stock price target in half to $18, which is 4.9% below Thursday's closing price of $18.93.

Power said his research suggests there hasn't been a meaningful pickup in camera sales, which was confirmed when one of the company's top suppliers -- Ambarella Inc. -- gave a disappointing revenue outlook for the current quarter. GoPro's stock has tumbled 49% over the past three months through Thursday, while the S&P 500 has gained 6.7%. "We acknowledge the recent stock weakness and high investor skepticism, but with consensus estimates likely to fall further and no clear near-term catalyst, we are moving to the sidelines," Power wrote in a note to clients.

GoPro Could Face Negative Order Revisions Heading Into 2016, Cleveland Research Warns

December 3, 2015 11:20 AM

- Ben Bollin of Cleveland Research commented in a note that GoPro is likely facing order cuts heading into the end of the year while 2016 will prove to be a more challenging environment.

- Bollin suggested that a fair value for GoPro's stock is in the $15 range.

Morgan Stanley's Katy Huberty said recent channel checks reveal "little change in absolute inventory levels entering Thanksgiving weekend." The analyst noted the checks confirm her belief that various retailers will "try to reduce" weeks of inventory during the holiday shopping season.

Meanwhile, Piper Jaffray's Erinn Murphy suggested that GoPro's elevated inventory level will result in the company falling short of its margin expectations as selective price reductions are "becoming more evident."

Cleveland Research: Order Cuts, Challenging Demand

In a report published Thursday, Ben Bollin of Cleveland Research noted that his discussions with contacts throughout GoPro's supply chain revealed further cuts to forward orders in November. The analyst continues to hear "soft demand" for GoPro's Session camera along with "incremental share loss." Meanwhile, contacts in Europe hinted that an "elevated inventory" of Hero 4 Session cameras is "see as a bigger risk" to the company's fourth quarter results.

Bollin continued that GoPro may have benefited from a brief momentum in sales due to Black Friday promotions. However, sales may have "dissipated quickly" as the promotions came to end and the company's partners were left "feeling price may be the key driver to sales momentum" in the future.

Bollin added that his contacts are indicating GoPro will face increased pricing pressure as competing devices, especially at the low-priced end, feature "richer feature sets." As such, the company faces a "more challenging" demand environment heading into next year.

GoPro Drops Price of Hero4 Session for Second Time

GoPro is struggling to find the sweet spot for pricing its Hero4 Session action camera.

The company on Friday announced the second price drop for camera, which is now priced at $199.

The Session was first announced in July, priced at $399 -- the same price as the better equipped Hero4 Silver. The Session lacks an LCD screen and 4K recording capabilities, both of which are found in the company’s Hero4 Silver. The pricing parity with a more powerful camera led to disappointing sales, prompting the company to lower the price to $299 in September.

The camera was marketed as the GoPro for the non-daredevil who wanted to capture everyday moments. GoPro CEO Nicholas Woodman reiterated the sentiment in today’s announcement, stating “[the Session is] the perfect way to capture rough-and-tumble family activities this holiday season.”

GoPro’s third quarter revenue was $400 million, failing to reach the lower end of its own guidance range of $430 to $445 million. Woodman blamed the miss on “lighter than anticipated” sales, but remained confident the Session’s then-new $299 price point would prove to be the sweet spot for the camera. Nearly a month after the initial price drop, Woodman stated the camera was “selling in-line” with the company’s expectations for a product at that price point.

With today’s announcement, it’s clear the first price decrease failed to provide the sales spark Woodman was expecting.

Looking forward, GoPro has said it will release a drone (also known as a quad-copter) and continue to pursue media partnerships in 2016. The company has been tight-lipped about its upcoming drone, outside of sample footage captured by the flying camera. Recent media partnerships have included Comcast in the U.S. and SkyQ in Europe. Both providers will offer a GoPro channel of curated content captured with its cameras.