Cloud services have become a standard offering for a lot of hardware companies these days. Buy a smartphone, and you get some free storage for photos; get a computer, and it comes with a cloud product as well. It's a cheap service add-on that makes hardware easier to use.
GoPro Inc. (NASDAQ:GPRO) tried its own cloud strategy with GoPro Plus, a $4.99-per-month photo-and-video-storage service. Since launching in 2016, the product hasn't had a meaningful impact on the company's bottom line, and it certainly hasn't helped it move more cameras. That's why I don't think an improved GoPro Plus service will move the needle at all for the company, and it might even hurt the value proposition for customers.
The new GoPro Plus
Here are the main features of the improved GoPro Plus offering.
- Camera replacement if your device breaks, even if it's your fault.
- Mobile backup of photos and videos through your smartphone.
- Unlimited photo storage and 35 hours of video storage. Formerly, it was limited to 62,500 photos or 35 videos (or a combination of the two), which amounted to 250 GB of storage, and some files would be reduced in resolution when put on the cloud.
Priority support and a 20%-off offer for accessories remain, but probably aren't huge selling points for the $4.99 monthly service fee.
If you're a hardcore GoPro user, paying $60 per year for storage may be appealing, and the service integrates well with QuikStories, but it's not compelling for the vast majority of casual GoPro users, and it certainly isn't a good deal when compared to other cloud services.
Why GoPro's cloud service isn't compelling
Just look at the competing cloud services already on your smartphone and GoPro Plus becomes a head-scratcher as a value proposition. Apple (NASDAQ:AAPL) offers 5 GB of storage for free, 50 GB per month for $0.99 or 200 GB for $2.99 and iCloud integrates with the photos and videos you're already taking on your phone. Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) gives 15 GB for free and then charges $1.99 for 100 GB or $9.99 for 1 TB of storage for Android devices. Dropbox also offers 2 GB for free and 1 TB for $9.99.
In short, there are plenty of options for data storage that aren't constrained within the GoPro cloud ecosystem, and many, like Apple, offer video editing services significantly better than GoPro QuikStories.
How GoPro could make the cloud a value-added service
Where I think GoPro has made a mistake is trying to use its cloud offering as a revenue generator. Instead, it should be a free service with the purchase of a camera. For example, get 100 GB of free storage for two years with the purchase of a $399.99 Hero6 Black. Maybe charge a fee if customers use more than 100 GB, but that free offer would get them using the cloud and understanding its value.
Instead, the company is trying to make services a business. CEO Nick Woodman said GoPro Plus is, "the first of several subscription initiatives we will introduce this year." Rather than trying to squeeze more from each customer, I think GoPro would be better off making their cameras a compelling value in the first place. After all, GoPro's core problem is it's disappointing unit sales. If it can't move devices, it won't matter what fraction of its customers sign up for its services.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium owns shares of Apple and GoPro. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and GoPro. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.