GoPro Pivots to Direct Sales, Lets 20% of Staff Go

Apr 21, 2020
by James Smurthwaite  
photo

GoPro has announced it has begun to pivot to a direct sale distribution model and cut more than 200 of its staff in response to COVID-19. GoPro will spend the rest of this year changing its model and, although this move seems to have been spurred by the ongoing pandemic, it does not appear that GoPro will reverse its decision after the virus has passed.

Last year, GoPro's website received 7 million visitors and it made around 20% of its revenue online in both the USA and Europe. This has grown in Q1 of 2020 and has been given as one of the reasons for the change in the model.

We've reported on GoPro's undulating finances, including in the past 6 months a fall of revenue of 54% in the third quarter of 2019 and then a bounce-back of 40% in Q4 following the release of its Hero 8 camera. GoPro's shift to a more consumer-direct approach includes the following expense reductions:

- $100 million reduction in non-GAAP operating expenses in 2020 and plans to further reduce operating expenses into 2021 to $250 million
- Workforce reduction of over 200 employees, or more than 20%
- Office space reductions in five geographies
- Sales and marketing expenditure reductions in 2020 and beyond
- Additional reductions in spending across the business

Nicholas Woodman, GoPro's founder and CEO, will forego the rest of his salary for 2020 and the Board of Directors have also volunteered to forego their cash compensation for the rest of the year. Woodman said: "GoPro's global distribution network has been negatively impacted by the COVID-19 pandemic, driving us to transition into a more efficient and profitable direct-to-consumer-centric business over the course of this year. We are crushed that this forces us to let go of many talented members of our team, and we are forever grateful for their contributions."

GoPro says that the change in model will not affect its 2020 releases, which are set to include new hardware, software and subscription products. The move to direct sales is expected to cost the brand $31 million to $49 million.

More information, here.

Posted In:
Industry News Revenue Round Up GoPro Coronavirus


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199 Comments
  • 199 59
 COVID-19 seems to be the common scapegoat for under performing companies closing shop or reducing staff.
  • 221 7
 More like the final nail in the coffin than a scapegoat.
  • 87 9
 @GriefTheBro: exactly. I am sure endless PB armchair quarter backs will talk shit. However, most likely none have ran a business or had all decisions/responsibility fall in their lap.
  • 6 2
 More likely it’s the garage audio...
  • 39 1
 Are you implying that you don’t entirely Trust this Message from GoPro?
  • 10 3
 @maxyedor: stick a fork in them, they’re done.
  • 15 10
 It's certainly laying bare which companies set up responsible cash reserves in case something weird happened and which were running on borrow money, service debt with profits, hope nothing happens models. Things like this is why Nintendo sits on $8billion(!!!) cash reserves.
  • 26 3
 @Fix-the-Spade: Nintendo was founded well over 100 years ago and vastly larger than GoPro. Nintendo is an approx. $40 Billion company, GoPro is approx. $500 million. GoPro was running lean a year or so prior to this mess, this is the straw that finally broke them a bit. Not an apples to apples comparison. Besides, I thought PB was all about Direct to Consumer and screw full service LBS/retail? None of use know what the strains of running a company of either size.
  • 61 6
 @the-one1: My business is short 1.3 million in sales this year thanks to not being allowed to open. I’ll have to cut about half the staff. No PPP loan or other help from government. WTF are companies supposed to do bro???
  • 4 13
flag me2menow (Apr 21, 2020 at 13:47) (Below Threshold)
 @bman33: what does football have to do with this
  • 13 4
 @bman33: I was thinking more generally than just GoPro. But in GoPro's case you've got to wonder how a company can make over $1billion in sales six years in a row and somehow find ways to lose money. The hundreds of millions they spend on advertising and bonuses might be something to do with it though.
  • 4 5
 @bman33: I thought PB was all about Pro Consumer and not screwed by full service LBS/retail?

FTFY
  • 1 0
 Your point of view deserves astronomia music.
  • 14 1
 @Fix-the-Spade: That is true to some extent although there is you have to make sure not to lump all companies together. I'm not sure a company like go pro was ever in a position really ever have stable footing for something like this.

But your point is spot on in relation to many other larger companies who are now crying with their hands out for a bailout. Marriot hotels for example paid dividends to shareholders o around $600M dollars over the last year and spent $2.3 Billion on stock buy backs all of which simply enrich the shareholders of the company, boost the stock price, and likely mean big bonuses for executives. Almost three billion dollars out the door last year and now we are bailing them out. It really is a f*cking joke when you think about it. And Marriot not at all the only company guilty of this. The corporate welfare is basically the norm across all industries. I just happened to read an article today specifically about Marriot so the numbers were fresh in my mind.
  • 27 0
 GoPro has been in trouble for many years, this is most certainly a nail in the coffin. Good for them for pivoting.

When they ran their IPO they were touted as the next big thing, the stock grew huge, but so did expectations. They priced in (and hired/planned around) drones, cameras, a media conglomerate, etc. The reality is that they did not deliver on those expectations, for a variety of reasons, and are now worth a fraction of their IPO valuation.

Their business has refocused on cameras, but its a hard market for sure and they face market share loss each year. With a DTC strategy, they will have more money to spend on R&D and make the product better and put them back into a growth phase. It's also easier to manage inventory and way less headache around dealer sales and support.
  • 8 0
 @dangerdan69: This is a great, objective response. Cheers.
  • 8 8
 @Yetimike2019:
Well... looks like no more yetis for you!
  • 3 0
 @Fix-the-Spade: nintendo : japanese companies are known saving for the rainy day
  • 2 0
 @mrkamot: In the US public companies very often spend their cash on stock buyback when they're cash rich
  • 1 0
 @Yetimike2019: new funds coming out, hopefully you can get some of that unless you’re over 500 employees of course
  • 1 0
 At least they made it this far. Sick fell even shorter....
  • 4 4
 Coronavirus is a great excuse for many, many companies. A lot of government benefits to be raked in, no questiobs asked why your business is in trouble. A lot of companies asking for bailouts recently - including those in a field which isn't affected at all...
  • 3 0
 Looking at their income statements they've been cutting selling costs for a while. Since 2016 their revenue has been steady at 1.2 billion with it costing them 750-800 million to produce the cameras. From 2016 to 2019 they halved both their selling and R&D costs.

They were spending 360 million in R&D back in 2019 and only turned 460 million in gross profit. That's not a tenable situation to be in. I think I prefer the redbull business model.
  • 10 1
 GoPro has been getting slammed for years by the flooding of the market of all the Chinese knockoffs selling for 1/4 of the price or even less. One of the unforeseen problems with outsourcing to China. US patent laws do not have jurisdiction over China.
  • 1 0
 @bman33: clearly, easy to speak when they don't know what it is to stay awake several nights for 1 decision. And not fox 36 or 38 kind of decision
  • 2 1
 @tacklingdummy: Unforseen? Only by quarterly report shortsighted.
  • 1 0
 You forgot to mention poorly managed and second rate
  • 3 0
 @jollyXroger: Decades of outsourcing. When you go to the open markets in China, you will be surprised to see all the fake iPhones. They so difficult to distinguish the fakes from the real one. China is the wild, wild, west for protection of intellectual property. There is no protection for intellectual property in China.
  • 1 0
 Same first thought. You have a business model that cannot be sustained long-term? COVID!

It could be that increased competition and declining appetite for a pretty specific camera is also a factor. How many YT content creators are there, and when is their current model good enough?
  • 2 0
 @bman33: full service for a disposable camera? GP seems like it should have always been DTC - They only used retail to build their market prescence.

Conspiracy Alert: Maybe COVID is the excuse to lay off all that retail sales channel, have someone else pay the costs and go DTC by choice?
  • 1 2
 @tacklingdummy: Yes, but that's what you get when trying to avoid the cost of other protections.
  • 3 0
 I asked a customer of mine who owned a cosmetics company a few years back "What would it cost to make a successful cosmetic line?" She told me $200,000. $5000 for product development and packaging design, $50,000 for manufacturing costs and $145,000 for advertisement. And sell it at a premium because if it's cheap, people will think it's cheap. Even though this is apples to oranges, the basic principle still applies. Advertising is everything. I deal with Cosmetic companies that are start ups that are much larger than companies that have been around for years with many more employees. These new start ups are youtubers and celebrities. They have an audience and therefore a customer base. No matter how good or shitty a product, you can make a break it via advertising. Advertising cost $$$$$$.
  • 1 1
 @tacklingdummy: Not sure what outsourcing has to do with it. Do you think the Chinese wouldn't be making knock off products even if we built everything here?
  • 1 0
 @jflb: Lol yep for sure
  • 1 0
 @Trail6: yes, last time my bank ran out of loan money in 5 mins. Only 35 employees.
  • 15 1
 @C0yotekid: your smoking too much or not enough! Your comment doesn’t deserve a response, but here it goes. First off, it’s not my fault I’m not allowed to operate during our busiest time of year. Second 1.3million sounds like a lot until you take out payroll(we pay higher than average for my industry), cost of goods, rent( I am still paying), dumps (we sell live plants and with no one here to buy them they die). I ordered a ton of material before the shutdown, and then the shutdown happened. On top of that we have to pay venders, healthcare for workers and a million other bills that aren’t going away. For my business we do about 50% of our sales in spring(not this year). We loose money in the winter. This means we are starting in the hole and not allowed to dig ourselves out. Not only will I not be buying any Yetis any time soon, but if we aren’t allowed to open soon I will have to start laying off people, and they will be really hurting in a few months when unemployment runs dry. Finally and this is my major point, f*ck you! You have no idea what your talking about clearly.
  • 6 1
 @Yetimike2019: thank you for that real perspective. I wish you the best and hopefully you get back to full speed soon
  • 6 1
 @bman33: thanks bud, I if we can open up soon I’m sure we can safely operate and serve our community.
  • 6 1
 @Yetimike2019: No problem. Lots of punk shit talkers on PB comments who have zero clue what it takes to run a business or each business's unique situations.
  • 7 2
 @C0yotekid: It's pretty clear you have no idea what you're talking about. Can you be a good little petulant child and just go away?
  • 3 1
 @C0yotekid: Engaging with people who's only goal is to be antagonistic is not productive. That's a pass from me.
  • 2 0
 @sino428: To some extent, but it would take much longer to produce without the intellectual property. Perhaps years without the intellectual property, knowledge, and manufacturing already set in place. Outsourcing in China is totally different ball game. When companies go to outsource there, they are basically required to give their intellectual property over. The US does not do that. China fake manufacturers are producing fakes and knockoffs at breakneck speeds.

For instance, I have been to China several times the last few years. In 2017, I went to the open markets and they had the red iPhone fakes within a few months.
  • 1 1
 @tacklingdummy: You think it would take the Chinese years to reverse engineer something like a go pro?
  • 4 0
 @C0yotekid: lol off on so many points, first yes I have to pay payroll. Some staff are on unemployment but we still have people working and we have to pay them. Secondly no, some plant material like small vegetables doesn’t last in containers, and they are talking about keeping my county closed until July. Second we paid for all of that material, so a lot of cash is literally wilting away. Rent, do you pay $25k a month for rent as well? Guess what it takes the ability to make sales to pay rent. Finally the entire industry(not just me) looses money in the winter, some loose more than others. This has to do with staff retention, and the fact that it’s hard to plant when nothing grows. Technically I could make more profit at the end of the year if I payed people off in the winter. We don’t because we try and give people the best living we can afford to. Finally it’s the local government forcing me to shut down, where other counties have still been allowing business like mine to operate. The counties that have been allowing Nurseries have had fewer cases of Covid-19 than my county, which at least shows it can be safety done. Since the county is shutting us small shops down, the county should offer financial aid, and they don’t. You might feel differently, that’s fine for you. Seriously though your points are all ignorant as f*ck, and you just sound like a punkWink
  • 2 0
 @Fix-the-Spade: Surely that depends on the age and success of the company. Comparing go-pro with nintendo is a low blow as they are worlds apart.
  • 1 1
 @GriefTheBro: I mean, they obviously got too big for their britches, and shame on them for over-marketing and now having to lay off, but surely GoPro is still the market leader in POV cams right? Wish they could have pulled back sooner and not gotten into this situation. Egg on their face....
  • 1 1
 @bman33: Yamauchi & Nintendo were founded in 1933. Got about 13 more years before They are “well over a 100 years ago.”
  • 1 0
 @sino428: It would take a lot longer to produce, if they didn't have the manufacturing infrastructure, intellectual property, expertise, and knowledge that outsourcing has given China in last few decades.

Just a few decades ago, China was way behind and extremely archaic. Manufacturing was horrible and only producing simple products.Fast forward to now, outsourcing has fast tracked China to world class levels in light speed. China would never be an advanced world class country in such a short time without advanced countries outsourcing to China and handing over their intellectual property. It is unbelievable how much has advanced there in such a short time.
  • 1 0
 @DirtbagMatt: roots of the company go back to September 23 1889 according to their website and wikipedia so there is that. Quick Google search shows me those dates.

www.google.com/search?q=nintendo+company&rlz=1C1GCEA_enUS819US819&oq=nintendo+company&aqs=chrome..69i57j0l7.4746j0j7&sourceid=chrome&ie=UTF-8

en.wikipedia.org/wiki/Nintendo
  • 2 0
 @bman33: Cool, thanks. I think I was Googling the patented electronics Iteration of the company which seems to have trademark right at 1933. Wasn’t trying to be snarky, was just jumping at the notion they weren’t making computer games in the 1800s!
  • 2 0
 @DirtbagMatt: all good..no worries.
  • 75 3
 GoPro was initially a very niche product, that was marketed mainly by the bike and ski shops that sold them when they first came out. After they gained some success, they started to require larger orders to be able to get any product. We were selling 2 or 3 a month, and would generally order that amount each month. A couple of times we got caught with just having ordered 3, sold one and then they announce a new model - the other 2 sat on the shelf while customers waited for the new model. We would have to sell the "old" ones for a large discount or make them a drawing prize or something... THEN GoPro started to require a minimum order of 6 units. That was when we stopped carrying them, and went with some of the other brands that were emerging. Next we hear BestBuy and other larger retailers are carrying them. Glad we got out when we did. While I feel for anyone losing their job, GoPro has 1,000 people working for them? Really? How many of those are in production and packaging/shipping? How many are marketers, representatives, etc...? Sounds to me like this company just kept growing too big for their britches and it finally is taking a hit in the ass that was a long time coming...
  • 4 2
 Great little write up, I couldn’t agree more. They grew too fast and now they’re in trouble.
  • 13 0
 if youre really interested...theres a lotttttt more to this company than that. a lot of sketchy stuff. not a short watch but...we all got heaps of time these days

if you care to learn more, prettttty interesting: www.youtube.com/watch?v=1qa1tGmi5g4
  • 2 0
 And they were at 4300 people back in 2014...
  • 2 0
 @ccolagio: Not all that sketch imo, aside from the charity thing, just very poor money management and future technologies investment causing them to fall behind in the market.
  • 4 0
 I am surprised that they're a publicly traded company given how niche their product is. It is sad because their product is very good, and both the product and the company have done so much for MTB and action sports in general, but I agree seems like the kept expanding while really only really appealing to a very niche market.
  • 2 0
 @ccolagio: Interesting video, errr podcast... thanks!

... and I discovered another photography Podcast!
  • 3 0
 Yup, I have friends who have worked there and it's not a company that looks after it's own, or the people making it money. ATBScott kind covered the releasing new models all the time + dicking over their retailers even before the big box stores came into the fold, saturating the market, etc.

I can guarantee that this was on the books to happen WAY before COVID-19 came around.
  • 3 0
 GoPro has a shit business model if they can't make money
  • 1 0
 @ccolagio: I made it through 6 mins of that.... Jeezus, can anyone have a blog/YouTube/OpEd thing these days?! I guess so...
  • 1 0
 Also the reason I stopped buying them, that they were constantly releasing new models, and the model that I just bought was already updated. Couldn’t be bothered trying to keep up, plus the data storage challenges were enormous as well as having a fast enough computer
  • 1 0
 @grugged: They were spending 350 million dollars a year in R&D to develop those new models! At least that's what it says on the balance sheet.
  • 45 9
 You guys are being really shitty. 200 people lose their jobs and all you can do is say “I’m a big smart business expert and I saw this coming.” The flippant ways you losers comment about a business that has done a lot for mountain biking is shocking.

And yeah, lots of people buy gopros and film boring stuff on them, and lots of you posers buy I9 wheels and kashima forks and are still dogshit riders, so hold off on the judgement of other people’s buying habits.
  • 6 4
 GoPro sucks as a company.
  • 6 3
 @ClaytonMarkin: The coming economic depression will humble many of these people.
  • 2 0
 @DoubleCrownAddict: we live in a world full of experts apparently!!
  • 34 0
 The reality is, they're making the best cameras they ever have, but people found out around the Hero4 that all those glossy action videos the pro's are posting are highly produced and edited mini films. Package it with an easy to use, but capable editing software and you'll have more success.
  • 63 0
 Wow Brendog's POV run of Rampage looks awesome. I should get one to shoot my awesome local trails. *records* Well that was trash. Delete. Camera sucks.
  • 21 0
 @learningcycles: Are you me?
  • 16 0
 Yep. And don't think people realize the amount of editing time required to make a watchable video that will hold peoples attention for more than 15 seconds.
  • 8 2
 For most people I think the free apps and software is plenty. If you are truly a filmer At heart them I think you should expect to invest in quality software. Nobody expects their guitar to come with protools.
  • 6 0
 @bulletbassman: I've been messing around with Davinci Resolve for my GoPro edits, but it's such a heavy software I need computer upgrades to use it without it crashing and freezing. $3k plus for adequate PC hardware is a significant paywall for your average GoPro consumer. I'm not sure GoPro considers this, or is just happy to unload their cameras and let the end consumer find that out the hard way. Either way, I think it hinders their product's usability.
  • 3 15
flag mtbman1980 FL (Apr 21, 2020 at 13:07) (Below Threshold)
 You can also get a reasonable quality camera from china for half the price
  • 4 0
 @mtbman1980: Or a second hand GoPro, there's lots around.
  • 5 1
 @bulletbassman: DaVinci Resolve is free (for the most part) and great tho
  • 3 0
 @Arierep: Resolve is way too much for gopro edits. Try flimora
  • 2 0
 @chriskneeland: use a 2008 Mac.. and you are fine bro.
  • 5 8
 @learningcycles: its not the camera's fault. you're literally using the same one as brendog...
  • 3 0
 @chriskneeland: Resolve is primarily GPU dependent so if you don't have a newer good one, it's going to be more problematic. Adobe Premiere (though not free) is primarily CPU dependent and will run without crashes on damn near everything. This is what I have found while messing around with both.
  • 1 0
 Only thing is GoPro doesn't include amazing lifestyle as a package.
  • 4 0
 You're totally right. They never made it simple. I used to be a pro filmmaker, and even I rarely took the footage off my camera, because it was a hassle. Meanwhile, I've done 2 IG lives for people today, on iPhones...
  • 2 0
 @chriskneeland: I use go pro quik and the regular go pro app. I really never had an issue making simple edits. Again my use of the GoPro varies from a true insta star or a filmer, but quik is dope for making a half decent edit in a minute and the regular app is fine for simply editing clips together. Sure they could bundle with some photo software trial version or such but I don’t think I’d want to pay more for a go pro to get software I’d personally never use. Especially considering you need a few cameras to really make a vid seem 3d
  • 1 0
 @chriskneeland: From their site, you can download much older and less intensive versions of the free resolve. Helped me run it on an older macbook air.
  • 3 0
 @zephxiii: ...or you can get the free (as in both beer & freedom) Shotcut, which supports both CPU & GPU, and has pretty much everything an amateur videographer would need

shotcut.org/features
  • 1 0
 @chriskneeland: hey man. I run 4K from my a7iii and iPhone through davinci with no problems on a $600 build. Rx590 ryzen 2700x and a small nvme can handle it. Those can be found even cheaper now. You can also tweak the settings to make the preview quality lower which will resolve some performance.
  • 1 0
 @walkabout-dav: Thanks man. Good to know. My GPU can't handle the load of the newer version. I had to uninstall and go back an older one. I'll check it out.
  • 13 0
 I can only think Gopro owns the action camera market because real camera manufacturers are content to let them do so. It seems like Sony could squash them technologically without much effort - but it must not be worth it. I've never had worse customer service than from Gopro - which I think says a lot about a company's culture.
  • 5 0
 What GoPro has going for it is the form factor and widespread adoption of all their mounting ecosystem. Sony and Nikon both made forays into action cameras several years ago...but backed off. The Sony (X3000) was in many ways a better camera than the comparable GoPro 5 at that time, but it suffered from being a sizeable camera with limited third-party support.
  • 3 0
 @mtbman1980: sony had a go and realized it's a non starter
  • 1 0
 GoPro has always been a good camera in terms of image quality, everything else has always sucked. The software and user interface on their cameras is just plain awful.
Combine that with an overpriced ecosystem, and it is not hard to see why they failed. I guess they heavily relied on overpriced accessories to keep their business afloat, but reality is that most people just bought Chinese "compatible" stuff...
  • 11 1
 I remember back in 2014 when GPRO was selling at over $85 a share... now they're sitting sub 3$, and they've only dropped like 25% with all the coronavirus hysteria. They can blame the virus but this company has been a sinking ship since the end of 2014.
  • 2 1
 It's a shit business model. It was destined to fail.
  • 2 1
 @makripper: For once, we agree.
  • 3 0
 It was a cult stock that ate me alive as a short. Taught me to never short a cult
  • 1 0
 @leelau: sounds like TSLA
  • 2 0
 @leelau: Shorting is gambling Wink
  • 1 2
 @badbadleroybrown: ok???
  • 3 0
 @badbadleroybrown: I will not touch TSLA with my fungal toe. Either long or short
  • 2 0
 I bought at 33 and sold around 70, I was stoked! I think their decline boils down to in the early 2010's, having a nice POV camera was new and cool, but now every boring dad has one sitting on the very top of his ski helmet going down the bunny trail. not so cool anymore.
  • 1 0
 @andyelliott3: Well done. My money = your money. I can't even recall the exact numbers as it was painful but I got stopped out about that $ level. It subsequently went higher then tanked but I had moved on
  • 11 0
 why wouldn't you go direct with something like this...its highly competitive market with no service side. there is literally zero added value when buying a go pro from a retail store.
  • 1 0
 They were spending 100% of gross profit on selling and administrative costs. Making cameras is expensive.
  • 13 5
 Unless you are a pro going huge, sorry but no one cares or wants to see your lame jumps or trail riding. We have been desensitized by being constantly bombarded by greater and greater edits.
After a while, it sure feels good to just turn it all off, including Strava, and going for a ride, while forfeiting the potential dopamine cheap shot of a "like"
  • 3 1
 Hallelujah!
  • 8 0
 I think you are underestimating the power of Friday fails.
  • 5 0
 so you only shoot a camera if you're expecting to win the Pulitzer prize in photography?
You know, some people shoot pictures and video to bring back the memories of the great times they've had. Not everything ends up on youtube.
  • 15 4
 You think GoPro will pass any savings to the consumer?
  • 35 0
 NOPE
  • 15 0
 You're assuming there's savings now. This may just be a move to keep afloat.
  • 2 1
 @TheR: I mean they are blasting their social channels with $100 off right now..
  • 2 0
 Yes I do. They will be saving a lot of money going consumer direct. There is a markup for retailers, now they can sell their cameras and make more profit, or just make some cheaper ones and still make more money. Makes sense for this type of business.
  • 1 0
 @juicebanger: Well there you go. I have a feeling we are going to go through a good bout of deflation in the coming months. Prices are going to drop universally for a while to get people to buy after things lift a bit. All these companies are going to want you to get out and buy after sitting relatively dormant for months at a time.
  • 1 3
 @TheR: lol I'm getting paid 1k a week unemployment meant to be a stimulus.

So far..I have a new XTR drivetrain, new wheelset, a Fabric 3d printed carbon saddle and $100 Paul polished dropper lever.
  • 2 0
 @reverend27: please be spending that locally?
  • 4 0
 @bishopsmike: trying to. Ordering out to eat as much as possible. Mostly mom and pop restaurant. Even when I know I can make it better at my house.

Going to both lbs to shop tomorrow. Think I'll pick up a new pair of Five Ten. Then head to the other shop and pick some tools I think.
  • 1 0
 @reverend27: awesome work man
  • 1 0
 @Meettaco: retailer mark up and likely a distributor in between in some
Markets. Keep in mind brands generally pay for a branded presence in store, special display, advertising fees and the brands are usually paying for any promo dollars off retail or at least protecting margin. So there’s lots of money to regain control over... but yeah, I doubt consumers will see much of it.
  • 1 0
 Considering they were losing money every year, I'm going to go with no.
  • 2 0
 @bishopsmike: From what I hear, LBS's are actually killing it lately. In Canada anyway.
  • 2 0
 @juicebanger: similar in northern California. Once everything shut down and people knew all they could do was go out on trails (still open locally thank god) they rushed to their LBS to get a new bike and all the additional riding people are doing is leading to more maintenance work too. Personally I've had a spike of co-workers asking for advice on what bike to get, new components, gear etc as well.
  • 6 0
 The only reason I ever wanted a GoPro was to wear around when I party in Whistler so I can remember what happened during the night, after riding for a day. Now THAT would be entertainment. Never would have been for my lousy riding in the first place...
  • 3 0
 Seems like you didn't need a GoPro in the first place. A bodycam or crashcam that records the last few minutes before you pass out would be ideal.
  • 1 0
 @vinay: Nah I want the whole show, not just the ending.
  • 9 0
 yup. it's a bummer. -part of the 20%
  • 3 0
 I feel you. I was just laid off today, just after lunch, from my software engineering job for shutterstock.com
  • 1 0
 @chacou: f***. Even software engineers are getting laid off???? Like...you're a LEGIT software engineer? Is there no tech company you can with with remotely?
  • 2 0
 @chrisingrassia: Revenue is down and outlook is not good so teams are being "restructured". Yes, I've been working on web stack for 10+ years, most recently front-end javascript stuff, but backend sql, java, ruby, python too. I'm thankful to have the skillset that I have and be able to work remote, so my situation is much better than millions of other people that are out of work. Not my first rodeo, but the conditions are a little different now than before.
  • 1 0
 @chacou: i'm envious. I'm in banking, compliance/risk and I f*cking hate my job, but I know that if I leave I literally have zero worth/value anywhere else. I wish I had the tech skills the future demands.
  • 2 0
 @chrisingrassia: grass always seems greener, right? Wink I've got buddies that do what you do and have been able to do really well with transitions to cyber security and data privacy. The thought has crossed my mind once or twice today to go that route, or just get out of software. I was even texting with buddies that are firefighters about exploring that path. In fact, I think I have to watch Office Space tonight, really feeling youtu.be/_iiOEQOtBlQ vibe
  • 4 0
 I’d be curious to know how the other action camera manufacturers are doing right now. I wonder how much of the struggling is GoPro-specific and how much of it is just people recognizing that the action camera footage of us mere mortals just ends up looking kinda lame.
  • 20 2
 I bought a Garmin Virb when it first came out. Used it once, saw the footgage. Realized how much more footgage I would need, how many more cameras I would need to capture it, and how much time I'd need to spend editing it...all to make a short clip... Then realized I'd spend more time filming than actually riding. I returned the camera a week later.
  • 1 0
 I bought a Garmin VIRB and this article actually made me go back to the Garmin website to see, if they have an updated version of their camera and it looks like Garmin has totally left the action camera market. It was very hard to find any mention of the VIRB or any support. Google searches turned up no press/marketing release, but did lead me to the regional India page for Garmin that has all their action cameras labelled as "discontinued."
I guess everybody is doing badly and GoPro may win just by being the only action camera left.
  • 7 1
 I never thought my career in management consulting would qualify me to make a comment on Pinkbike, but this is actually a really good move for GoPro.
  • 15 1
 username checks out
  • 2 0
 Agreed, it looks to be about reducing their costs rather than increasing their revenue. Sounds like GoPro has been an expensive company to run. They spent a lot trying to expand into various areas and have been pulling that back for a while now. They look to trying to run a much leaner operation, concentrating on their core business.
  • 3 0
 I’d bet this all about cleaning up the books to be attractive to a buyer.
  • 1 0
 @robwhynot: That's the smartest thing I've read all day
  • 1 0
 @friendlyfoe: at this point it’s likely they’re best play to increase near term shareholder value.

There are tons of companies that own portfolios of durables consumer brands, Dorel being one many people here would know about. Then there’s others like Jarden which owns Coleman, k2, US Playing Cards, canning products. GoPro is a strong brand, especially with younger demographics... it’s almost the default name for compact action cameras a la Kleenex vs facial
Tissue. When they get the balance sheet cleaned up it would be an attractive buy with lots of opportunity in product management, customer service and add-on services to grow.
  • 1 0
 @robwhynot: It could be, but it could also be Woodman following the advice of consultants or a PE shop. The kinds of moves they're making now are the exact sort of alignments ordered after PE acquisition or an expensive stint hiring consultants for 4 weeks. The number of funds who would want a majority stake in GoPro are limited, and I don't think GoPro's IP is unique enough to warrant a $500m acquisition by a competitor, especially since most of GoPro's competitors have better distributed revenue streams, whereas GoPro only makes action cameras.
  • 1 0
 @fullendurbro: agreed. However my bet is Woodman is taking advice to maximize is potential
Fortune through a sale. It didn’t happen in an ipo. His last chance is by being acquired. I agree the company isn’t overly attractive for a fund. There are congolmerations who may want it though... but only if they establish a viable DTC channel they could exploit on other owned brands.
  • 1 0
 @robwhynot: In theory it might be attractive to a brand that already has the infrastructure in place to sell it. The challenge is that as much as the sales channel is sporting related, the R&D aspect is a totally different business. Take for example Dorel (who may not survive until the end of the year), they could probably sell the things but what do they know about developing cameras. It could go off the rails pretty quickly.
  • 1 0
 @friendlyfoe: not unheard of, but it is niche and consumer electronics is a bloody cutthroat category.
  • 2 0
 Right? The Reality right now: Go Pro sells cameras to restaurants business that literally can not sell Go Pros for the foreseeable future. Direct to consumer is the only way for them to generate sales right now. Long term maybe it allows prices to get more competitive with some of the other excellent products out there by cutting out the middle men.
  • 2 0
 I don’t know how typed “restaurant” business instead of retail business, but sure the point still works me thinks.
  • 2 0
 @Yetimike2019: "Sick edit of waitstaff carrying food to women with bob cut that wants to speak to manager."
  • 7 0
 Just put down the gadgets and pedal
  • 2 0
 Go pro has been giving the shaft to their retailers for years. New cameras every 3 months . Independents have been dropping go pro for the last while. No margin. Shit customer service. I feel bad for there staff. But their business model has been flawed and was unsustainable.
  • 3 1
 The action camera market is commoditised now, it's simply a race to the bottom on price as the quality of the cheaper competitors catches up. This is the same thing we've seen in mobile phones. Once your market is at that stage you have a couple of main choices: join the race to the bottom on price or differentiate your product so it's not a direct comparison.

GoPro tried to differentiate by creating an ecosystem with the Karma, online storage platform, lifestyle branding etc. but it hasn't worked - people don't want that stuff enough to pay more for it. Trying to compete on price will be a non-starter, so I think their only choice now really is to differentiate on quality instead (e.g. iPhone vs the cheaper Chinese phones), i.e. pivot back to 'pro' end of prosumer. At that end of the market people are willing to pay more.

Prosumers will know that GoPros give the best performance and that they have the features that production professionals need and they will know to find them online. Those types of buyers wouldn't have bought a camera in BestBuy, so changing to a direct sales model and culling out a lot of unnecessary cost from the business makes a lot of sense to me.

I don't see this as the end of GoPro, it's just a case of focusing the business on a new and narrower market.

I wouldn't necessarily hold for buying a GoPro waiting for lower prices though. If they do push towards the higher end it's likely that prices may rise. Red cameras and the pro end of the Apple computer line up are good examples of the "reassuringly expensive" pricing approach!

Much sympathy to the staff who have lost their jobs though, you've done a lot to raise the awareness of extreme sports and the marketing bought in big sales that drove the development of the great tech we have in GoPros today.
  • 2 0
 So many things have nailed this company aside from a poor business model. Nails in the coffin include:

- Great video quality on phones
-Waterproof phones
-Terrible editing interface that crashes
- Their own file format that needs adapting for mainstream use
-The fact that the footage never looks as good or as fast as it does in real life
-The fact that trails on videos never look as steep or as rough as in real life
-Trail footage is boring
-Once we got to 4k noone really wanted to go any higher
-Cheaper chinese knock offs doing HD for £5 - Jeez I picked up a HD knock off as a free gift for a 20 buck purchase of something else.

As many have said, they went from novelty to Niche.
  • 10 9
 They are DOA with this move. They gained traction when all brick and mortar started carrying them and during the holidays here in the US stores like Best Buy move a ton of GoPro because of their deals and presence. They think they are a mainstream product when in reality they were/are a niche that was pushed heavily by mainstream sales channel.
  • 3 2
 Truth. Their displays of playing videos is a good sales tool and catches people's eyes in the stores. The problem is that they're too expensive and the knock-off do the job decent enough to not warrant paying for the real thing.
  • 3 0
 @matadorCE: Exactly. During Christmas a $200 GoPro is basically an impulse buy item when people are walking around the store. No one will be going out of their way to buy the same $200 camera directly from them. They will just buy the other Sony $200 camera that's being displayed all over the store.
  • 1 0
 Yeah - I was really surprised to see this. They've clearly made a HUGE push into traditional retail. Think of how many GoPro kiosks you see in bike and ski shops, other outdoor gear shops and electronics shops/departments in bigger stores. I feel like at least 80% of stores I go to in those categories have some kind of white GoPro tower/shelving displaying their products.

Unless they're making some kind of (super-bold) "traditional retail is dead" claim because of COVID, it's pretty clear that model wasn't making them money. I wonder what the real problem was? Just the cost and effort to get into those stores and support such a huge retail network? Disappointing sales from that network? Or do they see the only future for their products being one with lower margins that they can only support from a direct-sales model?
  • 6 4
 how else you gonna live feed your totally sick IPA fest at the local brewery before going to the movies in a tank top? no outdoor recreation required!
  • 1 0
 @kmg0: hahahaha
  • 3 0
 I don't think so at all. In fact this is how they will survive. Let me If Gopro is chargig 400 for their camera from them and at retail, that means that camera prob cost them about 100(or less) to make it. They sell it to the retailer for 200 so that they can make keystone(I am betting that the retailer actually only makes 20-30% though) and they mark it up to 400. If GoPro is selling 20% of their product currently on their own website that is worth double or triple what it costs to send to a retailer. GoPro can now change prices and product flows easier and not worry about older models/cleaning them out of retailers etc. Their profit margins just went way up and they do not need the huge sales force and marketing within those retail environments. More money spent in other places. Just mt 2 cents. Probably sounds like I am rambling, Ive been in this type of world for a while. I just don't think they really need brick and mortar sales anymore to be successful.
  • 1 0
 @Meettaco: Not bad, not bad. That's a dialed reply.
  • 2 0
 @matadorCE: TBH I've never seen someone at a trailhead with something other than a GoPro. I'm not sure the competition is selling much. Maybe elsewhere in the world it's different?
  • 1 0
 @igxqrrl: I think part of the current mtb culture is to flex via your gear so using the gopro knock-offs is severely looked down upon. I just my 2c.
  • 3 0
 @Meettaco: I am an Lbs that looked into carrying gopro.....I wish it was keystone. Most of the margin hovered from 18-32 %. The very best was 32% but that was for a store that sold a ton- you mostly made 20% and usually your dedicated guys would get 10% anyway so it can't even pay for toiletries for the year (if I sold 6 units it the profit would barely cover toilet paper/towels/soap and cleaning for the year). Unfortunately, gopro has worked to screw its dealers for a few years now. Every year the commitment is 6 units in each model. That means if you are a small shop and buy 6 you need to figure you will sell 2 at full price, 2-3 will go to regulars and the remainder will be dumped for at or below cost. Add to that the accessories that you order and may sell 1/2 off and its a losing investment. Most shops that carry them do so because they view it as a loss leader or are may have had a local rep that tried to help them when gopro ran discounts. I am not going to argue the merits of lbs vs online but look at this way. Those 200 staff are cyclists/surfers/divers/etc that promoted the sport, now that they have to find other work they will most likely leave their industry and statistically probably leave their respective sport. How many guys wrenched then left the industry for some reason and stopped riding altogether. As I am writing this with 24 years of shop experience I have worked with or employed 189 people and I honestly know of 38 of those that are still "cyclists". Most got other jobs stopped riding. got fat, or stopped caring about the sport. 2 of the best reps I ever knew got canned in similar situations (companies going omnichannel or perferring to cut costs)...one manages a condo complex now and the other is freelance designer. One sold all his bikes the other has a fixie that they ride once in a while. That rep used to put on bandit cross events and use his parents place to host night ride parties and now doesn't care....hundreds of people came to those. These jobs and shops provide meeting places and foster a community. With such thinning comes a price. Gopro will get theirs....eventually Sony or someone will make a cheaper or better camera and gopro will sell to hedge fund only to bankrupt. So goes life. It will be a Raleigh situation.....in 6-12 months they will want retailers back but it will be too late, damage done move on.
  • 3 0
 Disagree. Those displays are just opportunities to acquire massive unsold inventory and increase expenses and ugly metrics like IOH. I just saw a display the other day and it still had Hero 6's and Hero 7's. If GoPro controls the entire distribution stream, their forecasting will improve and their expense:revenue ratio will be a lot healthier.
  • 3 0
 @fullendurbro: you do understand that those displays filled with old product burden the lbs not gopro right? They don't swap inventory, credit you or anything else. You order....pay them and f@#k off. Gopro gets its money no matter what you struggle as the dealer to move the inventory if you can. It boggles my mind why people think that lbs get to play with their inventory. Whe we commit to a brand we buy the inventory. Some brands on credit, most prepay. With 95 percent of brands once you buy the product.....good luck....hopefully it sells. We don't get to call gopro and whine and they do anything about it.
  • 1 0
 @lukeproofman: I did not know that.
  • 3 1
 seems kinda crazy they would have over 1k employees. btw, my gopro8 is awesome on the dirt bike. have not done anything worth filming on the mtb since i bought it. or ever, i suppose.
  • 2 0
 Cheers to you for recognizing that. "Here's me riding my beginner trail for 23 minutes with no editing or semi-impressive riding."
  • 4 1
 Funny that Gopro spend 1 milliom dollar with their last challenge a few months ago, that could have paid a lot of employees for some momths.
  • 2 1
 Can we talk for a minute about the fact that it’s 2020, we’ve all been ordered to stay home for weeks or months depending on where you live, and the term “non-GAAP” has appeared in a Pinkbike article? These are strange times indeed.
  • 1 0
 So nearly everyone has been working through video conferencing and webcams are sold out everywhere. Not too familiar with GoPro but if these cameras could serve as webcam, they may be the hot ticket right now. I know many laptop computers have got a camera built in, but it can be awkward when you need to point the camera in different angles, to products or paperwork you're working on etc.
  • 1 0
 LoL it has to be just about the vaguest comment you can make in finance. In this case it really doesn't mean anything.
  • 1 0
 I like how corporations are 'living paycheck to paycheck' like us poor people so that when something unexpected happens, they trim the fat. I'm no businessperson but what happened to having cash reserves or savings? Or is literally everyone running business on the cusp of bankruptcy and the only thing holding their business model together is hoping a pandemic and/or natural disaster doesn't happen. Reasonable people plan for rainy days like this by having cash reserves and savings. Unreasonable people hope they win the lottery without buying lottery tickets.
  • 1 0
 Cash reserves are often looked upon as unfulfilled opportunity by investors/shareholders. A CEO that isn't leveraging every opportunity for growth can be in for a rough time of it.
  • 1 0
 Gutted for those losing their jobs. Sincerely.

Will be interesting to see what the direct-to-customer model will mean to the customer. With absolutely zero personal understanding, i would imagine one of three scenarios:

1. Going DTC means they can now lower the prices on their products. "Good times"

2. Going DTC means they *can* lower their product prices, but they choose not too. "Bad times"

3. They still have to sell their products for the same prices, but the reduction in their own costs by going DTC means they can survive as a business and not go bust.

If the scenario 3 is the outcome. They really need to look at what needs to change within their business. They have a good product that, although niche, people do want. You can literally see their product demand on any given day at a ski resort. Go pros are everywhere.

I think we can all agree that within the consumer market of MTB (as well as other 'action' sports), there is a sizeable portion that will spend on 'want', rather than 'need' (think people buying the factory model componentry/frames where the product tech far exceeds the consumer's ability).

£400 for a camera means it would be a very expensive toy for me. But given what people spend on other products throught the market, it seems that that is a clearly affordable price tag of someone wants it - i.e. people have the money for it.

On top of this, Average Joe spending £400 on a GoPro means that Average Joe gets exactly the same bit of kit proffesional filmmakers are using. In other words, for this specific product at least, pros can't get a better bit of kit and Average Joe gets the same product at a price they can afford.

This is a fairly unique position for a company to be in and i don't know what the answer is for them to really capitalise on this.

Other commenters have mentioned that the effort to produce some worthwhile footage is offputting. I'd agree. I have a go pro (bought 2nd hand off a mate who really digs the filming and editing - he always puts together great videos of our snowboarding holidays). I can't be bothered to do much with the mediocre footage i captured. Maybe this is an avenue for them to explore - make it easier to produce great footage/videos and maybe people will be more inclined to either invest in the product and/or continue to invest in the latest iterations.

I've literally forgotten where i was going with this and i can't be bothered to go back and read what i was on about. So... submit comment regardless.
  • 1 0
 I'm not surprised I bought a hero 8, it's just not as great as I thought it would be the inbuilt interface is a bit clunky the battery life is crap if you try to use the functions like voice control and gps. Not to mention the Desktop software is shit, the App is also shit (just not as shit), there seems to 2 Apps?! Quik and GoPro...

Nothing is clear in the apps, like is my camera uploading to the cloud, is my edit uploading from my phone? Then you go on their support forums and it's all laid bare, the people barely know their own products, or at least that's how it seems to me.
  • 5 0
 He's, "Nicholas" now?
  • 3 0
 Nothing to see here. Sounds like a good move for the company and I'll be a fan regardless.
  • 1 1
 I was a Hero 3 Black user, got a few Hero 4 Blacks for work use. The home one never gets used now and the work ones have become employee benefits to use on vacations after their use for work stopped.

I like having fun rather than filming, don't have time to edit, and I'm not good at filming! But I do know some people that really enjoy the hobby of filming and they have continued to support GoPro this upgrades to there cameras.

GoPro and the action camera market is niche that had a brief flash into a mainstream consumer product, but it seems they still are niche. Same with the high end drones (which GoPro crashed and burned in). A realignment of expectations here was just reality catching up with them.
  • 4 0
 Make no mistake Covid is going to funk up many many companies.
  • 3 2
 A long time ago it was cool to make vids of yourself. But unless you are pinning it like Brendog, you look like a right muppet showing off to your mates. Get back on your bike and frickin ride ya bunch of panzies!
  • 1 0
 There is a place for filming relatively ordinary riding in a fun way. But doing that is film making, not riding, you have to spend hours walking up and down, setting up shots and repeating them to get the right to get a good quality product at the end of it. If you are just hitting the record button on a chest or helmet mount then what you are doing has to be amazing otherwise the footage won't be worth watching. If you are taking the time to set up interesting shots and angles to put together a nicely edited video it will be fun for you and can be good to watch. You don't need a £500 camera to do that though, most of us have phones in our pocket that will do a great job.
  • 2 0
 At least they’ve got a good customer service and operations team managing their website.

Oh wait.
  • 2 0
 Boss: It purely business, bropro, gotta let you go.

Employee: Tell it to my fam...
  • 1 0
 "Just GoBro."
  • 1 0
 Shady software with vendor lock-in and dark pattern cloud uploads. Yi and many similar companies offer a superior product at a lower price.
  • 1 0
 We need an ebike with a few built in cameras. They would capture airtime and crash automatically.
  • 2 2
 The novelty of filming wears off pretty quickly. Now I just ride. The best memories you need to have are already stored in your brains!
  • 1 0
 Go Pro or Go home............home it is then with no job.

Do these companies not get any funding during covid times???
  • 1 0
 I Just upgraded to the Hero 7 Black. It should be here today. :-D $251 USD tax and shipping with 32gb memory card!
  • 1 0
 Wasn't this company already on the verge of death before this all happened?
  • 1 0
 ...this news was out last week fwiw.
  • 2 2
 I was considering an upgrade to the newest GoPro, but this has me considering other brands
  • 1 0
 ...or maybe some steep discounts?
  • 1 0
 Didn't Xiaomi want to buy Gopro?
  • 2 2
 I don’t see the point really of filming your riding. Guess the odd clip would be cool but novelty wears off.
  • 1 0
 "well the world is a twisted place"
youtu.be/0Rc6mr8zjEE
  • 2 2
 These things were hot until personal smartphones with gazillion megapixel resolution and selfie sticks were invented.
  • 2 1
 I can't wait for the close out sales
  • 1 1
 Before you go pro Go practice
  • 1 2
 I like my GoPro... should I not anymore?







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