GoPro's (GPRO) 2.5M Strong Subscriber Base to Drive Top Line
GoPro GPRO recently announced that its subscription service now amassed more than 2.5 million subscribers at the end of third-quarter 2023. This represents 20% year-over-year growth.
At present, GoPro’s subscription service provides subscribers with unlimited cloud storage as well as the capacity to upload footage from GoPro cameras to the cloud directly. Subscribers can also avail significant savings on its cameras and a discount of up to 50% on accessories purchased at GoPro.com.
The service also offers premium editing tools in Quik App, a private live streaming platform and assured replacement for damaged cameras. The company also aims to launch an all-new Quik desktop app later this year that will be offered as a subscriber benefit at no extra charges.
The new Quik desktop app for MacOS will be rolled out in November 2023 while for Windows it will be rolled out in the summer of 2024. This app will have the ability to support footage from any camera and synchronize it with Quik mobile app for continuous cross-platform editing and content management, added GoPro.
GoPro’s focus on a subscription-centric model makes sense as subscription revenues ensure a stable and recurring revenue stream. It expects to have subscribers in the range of 2.5-2.6 million by the end of 2023.
Headquartered in San Mateo, CA, GoPro is one of the leading manufacturers of the world's most handy camera and enabler of some of today's most immersive and engaging content. Its performance is being cushioned by a higher subscriber base and an expansion of its direct-to-consumer business.
GPRO also plans to restore its retail presence to pre-pandemic levels. It shipped 704 million camera units during the second quarter of 2023.
However, GoPro’s performance is being affected due to strategy shifts and related pricing actions. Higher sales of lower-margin entry-level cameras weighed on margin performance in the last reported quarter. Management expects uncertain macroeconomic conditions to keep consumer spending under pressure in the second half of the current year. Stiff competition and increasing expenses are concerns.
A Look at the Performance of Some of the Peers
Sonos’ SONO performance is benefiting from a healthy uptake of Era 100 and Era 300 speakers. Solid momentum in the Americas region owing to new product launches and promotional activity bodes well. It has already launched five products in fiscal 2023 and expects to roll out more products throughout the year. The flywheel initiative is helping SONO to expand its customer base and monetize the existing customer install base by extending its geographic reach.
However, its performance in the fourth quarter is likely to be affected by inventory tightening by retailers in Europe and Asia-Pacific region amid volatile macroeconomic conditions. Stiff competition and unfavorable foreign exchange movements are added concerns.
Dolby Laboratories’ DLB performance is affected by lower shipments in PC and consumer electronics. Going ahead, it expects its audio revenues to decline by low-single digits during fiscal 2023. Rising research and development costs to fend off stiff competition and uncertain macroeconomic conditions continue to strain its margins.
However, increasing adoption of Dolby Atmos, Dolby Vision and new imaging patents are major tailwinds. DLB anticipates revenues from these businesses to grow in the range of 15-25% in fiscal 2023 driven by continued momentum in broadcast and other markets.
Sony Group Corporation’s SONY performance is being driven by continued strength in the Games & Network segment. It continues to expect selling more than 25 million units of its PlayStation 5 (PS5) in the current year. SONY sold 3.3 million units of PS5 in the first quarter of fiscal 2023, up 38% year over year.
Strength in the Music, Financial Services and Entertainment, Technology & Services’ segments are other tailwinds. The Music segment is aided by higher recorded music and music publishing sales from paid subscription streaming services. Frequent product launches and strategic collaborations bode well.
The company also raised overall guidance for fiscal 2023 revenues. It now expects sales of ¥12,200 billion compared with the earlier guidance of ¥11,500 billion.
However, SONY lowered its guidance for the Pictures, and Imaging and Sensing solutions segments. Stiff competition and weak macro conditions are concerns.
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