In a climate of belt-tightening by consumers, GoPro continues to grow its subscription business by 20% year over year, according to a recent press announcement.

“The GoPro subscription continues to be a powerful financial engine for GoPro, representing the fastest-growing, highest-margin, and most profitable product we offer,” said Brian McGee, GoPro’s CFO and COO.

Founded in 2002, GoPro made a name for itself with its groundbreaking action camera and cultivated a dedicated following on social media. In 2016, the company introduced its subscription service, initially priced at $4.99 per month, offering subscribers access to extensive cloud storage for their multimedia content.

According to a Havard Business School case study: “During the COVID-related retail slowdown in 2020, GoPro increased its direct-to-consumer footprint and aggressively marketed a new subscription. By 2021, however, subscription benefits were still largely tied to camera ownership. Nick Woodman, founder and CEO of GoPro, was considering whether GoPro could leverage its position as an active lifestyle brand to extend the subscription to benefits beyond the camera, similar to the way Amazon packed a host of benefits into Amazon Prime. Woodman saw enormous potential for GoPro’s subscription and believed that, someday, it could even become the company’s new flagship “product.”

The current GoPro subscription service provides customers with unlimited cloud storage of their GoPro footage, the ability to auto upload footage to the cloud directly from their camera, automatic highlight videos sent to a customer’s phone, premium editing tools in the Quik mobile app, a private live streaming platform, guaranteed damaged-camera replacement, exclusive savings on GoPro cameras, and up to 50% off accessories at GoPro.com.

GoPro’s all-new Quik desktop app, launching in November 2023 for MacOS and in Summer 2024 for Windows, will support footage from any camera and sync with the Quik mobile app for seamless cross-platform editing and content management.

Despite a 4% decline in revenue to $241 million in Q2 2023, GoPro exceeded industry expectations. The company recorded a substantial 27% year-over-year growth, amassing 2.44 million subscribers by the end of the quarter, with Quik subscribers increasing by 6% to reach 294,000. The next earnings announcement via webinar for Q3 results will be on Nov. 7th,

INSIDER TAKE

GoPro’s subscription service’s growth amidst economic uncertainty underscores its resilience and strategic acumen. The 20% year-over-year increase in subscribers showcases the enduring appeal of its offerings. Notably, GoPro’s CFO and COO’s declaration that the subscription is the company’s most profitable product illustrates the growing importance of this revenue stream in GoPro’s overall business strategy.

GoPro’s pivot to a direct-to-consumer model during the COVID-related retail slowdown aligns with broader industry trends, allowing the company to connect more directly with its customer base. The vision to expand the subscription’s benefits beyond the camera is ambitious but aligns with the trajectory of successful subscription-based businesses like Amazon Prime, demonstrating GoPro’s intention to diversify its revenue streams and build brand loyalty.

The comprehensive array of subscription benefits, including unlimited cloud storage, automatic uploading, and premium editing tools, positions the service as an indispensable tool for content creators. The upcoming Quik desktop app further enhances the cross-platform utility, catering to a broader audience.

While Q2 revenue declined, the fact that GoPro exceeded industry expectations and recorded significant growth in subscribers is promising. The company’s ability to adapt to changing market conditions and capitalize on its active lifestyle brand image sets it on a course to maintain and potentially expand its subscription-based revenue, solidifying its position in the market. Given they are promoting the subscriber growth results now, the Q3 earnings announcement points to GoPro’s continued subscription growth and overall financial health. We will see on Nov 7th.