GoPro (GPRO 0.78%) recently unveiled GoPro Plus, its long-awaited cloud backup platform, as a new feature for its Hero 5 cameras. The cameras will automatically upload the photos and videos to the platform when they are charging and connected to a Wi-Fi network. The backed up content then appears in a user's GoPro Plus account, which can be accessed from its website or Quik's mobile and desktop apps.

Image source: Getty Images.

GoPro Plus comes with a free two-month trial, after which the service costs $5 per month. That membership includes access to a library of royalty-free music and videos, the ability to cast videos to Apple (AAPL 0.50%) TV, and a 20% discount on accessories. However, GoPro Plus doesn't backup the videos at full resolution. The reduced-quality videos might be good enough for social media, but the lower quality is noticeable on YouTube -- which could be a jarring trade-off for many GoPro users.

GoPro probably wants to grow GoPro Plus into a new source of recurring high-margin revenue to reduce its dependence on hardware sales. However, investors shouldn't pin their hopes on the service offsetting slower sales of action cameras just yet.

Reviewing GoPro's growth forecasts

GoPro has posted three consecutive quarters of year-over-year revenue declines. Analysts expect sales to fall another 21% annually during the third quarter before rebounding 55% to $677.2 million in the fourth quarter on robust sales of the Hero 5 and Karma drone. But even if GoPro hits that target, it's still expected to post a 14% sales decline for fiscal 2016, which ends on Dec. 31.

Nonetheless, sales are expected to improve 23% in fiscal 2017 if the Hero 5, Karma, and GoPro Plus convince older users to upgrade their devices. The stand-alone Karma costs $800, the Hero 5 Black costs $400, and a bundle including both devices costs $1,100. Wall Street's fourth quarter revenue target calls for sales of about 620,000 Karma/Hero 5 bundles. That target could be tough to hit, since drone market leader DJI Innovations only sold an estimated one million drones throughout all of 2015.

How many people will sign up for GoPro Plus?

GoPro shipped 6.6 million cameras in 2015 and 5.2 million cameras in 2014. GoPro won't book much revenue from GoPro Plus in 2016 due to its two-month free trial. If the Hero 5, its 2017 updates, and a long-rumored 360-degree camera can get its sales back on track, GoPro might sell up to 6 million GoPro Plus compatible cameras in 2017 and make up the difference in drones.

GoPro Plus. Image source: GoPro.

If all of those users signed up for GoPro Plus, they could potentially generate $360 million in annual revenues for the company -- which would equal about a fifth of its estimated sales of $1.71 billion for 2017. However, that forecast probably doesn't factor in the impact of GoPro Plus' recently revealed subscription fee.

However, assuming that 100% of its users would subscribe to GoPro Plus is far too optimistic, since it has proven tough to sell new subscription-based services to hardware buyers. For example, Apple revealed that Apple Music, its subscription-based streaming service, had 17 million subscribers in September. That figure sounds impressive, but it's paltry compared to the roughly 230 million iPhones which the company is expected to sell this year. Apple claimed to have 782 million iCloud users earlier this year, but it's unclear how many users actually use the paid tiers, which offer more than 5GB of free storage.

But mind the headwinds...

Compared to mobile-based cloud backup platforms like iCloud, Alphabet's Google Photos, and Microsoft's OneDrive, GoPro Plus seems like an outdated backup system that tries to do what smartphones have already done for well over a year. Moreover, would any of the paying users of those platforms also subscribe to GoPro Plus just to backup their GoPro content?

While GoPro Plus might be useful for some hardcore GoPro users, it probably won't convert the casual smartphone photographer who is used to their photos and videos being automatically backed up to the cloud. That's problematic, because GoPro likely wants more mainstream users to buy GoPro cameras and share their reduced-quality videos across social networks.

Meanwhile, hardcore GoPro users and professionals might reject GoPro Plus' reduced-quality backups, and opt to backup or edit their content the old fashioned way -- by manually transferring full-quality video to their desktops. The discounts on accessories and additional features might attract some users, but I believe that it could still be tough for GoPro to convince even half its new user base to sign up for the service. Therefore, GoPro Plus will likely matter less than most investors think, at least until the company offers premium tiers for full-quality backups.