That tiny camera on the left costs just $129. Source: GoPro

GoPro (NASDAQ:GPRO) cameras aren't just for action junkies anymore. At least, that's the message GoPro is trying to send with its refreshed line of cameras, the Hero4. The new line of Heroes includes two high-end action cameras capable of shooting high-frame-rate high-definition video, and one budget model that costs just $129.

That third camera should get investors excited. The $129 price is sure to attract the attention of people with a GoPro on their holiday wish list. In fact, that price point makes GoPro a very attractive option for anyone considering buying a stand-alone camera.

But selling more cameras is only the start for GoPro.

Is there really a low-end market?
Smartphones have largely replaced our point-and-shoot cameras. They've gotten remarkably good in the last few years at shooting pictures and video. They can even take high-frame-rate video, and have all sorts of other technical features that make capturing great photos easy. What's more, they're almost always on us, ready to capture the moment.

But you might be hesitant to do what GoPro's cameras are designed to do with a $750 smartphone. You can stick a GoPro in places a smartphone probably wouldn't like (for example, your dog's collar). You can take them underwater, too. Additionally, GoPros have a 170-degree wide-angle lens, which makes it easy to capture any situation.

At $129 users don't have to worry as much about hurting these cameras, which are designed to take some hits. That makes for more experimentation, more exciting content, and more YouTube views on GoPro's channel. And that's where the real money is.

GoPro is a YouTube star
GoPro's YouTube channel has nearly 600 million YouTube views. Its average user-generated video gets over 643,000 hits. More importantly, it's growing rapidly. Over the last three months, GoPro has seen its average daily video views nearly double to over 1.3 million views per day. Over the last year, minutes watched on the channel are up 275%.

I point this out, not because I think GoPro ought to become a YouTube partner -- 600 million views would equal about $6 million in AdSense revenue at most -- but because it points to the fact that GoPro is a media company, not a camera company. Camera sales are currently the way GoPro monetizes its content. Each YouTube view is an advertisement for its cameras.

Down the road the company expects to be able to make money directly off its content. In its S-1 filing the company noted, "We plan to pursue new revenue opportunities from the distribution of engaging GoPro content in the near term."

Those new revenue opportunities could mean expanding to its own platform to give it more control over its own content. Alternatively, GoPro can sell the rights to its content to other distribution platforms like cable networks or over-the-top streaming channels. For example, The Travel Channel might be interested in footage of water slides or zip lines for a show. It's cheaper (albeit less fun) to buy the rights from GoPro than to send a crew out to film things on site.

It's worth noting, however, that management was conspicuously quiet about its media revenue opportunities on its most recent conference call. Currently, GoPro is offering content for free on YouTube, Facebook, Xbox Live, and other platforms. While some nicely integrate the ability to buy the camera that was used to produce the video, there's no other means of monetizing the footage.

No more middle ground
The new line of cameras completely revamped pricing. I've already talked about the accessible $129 camera -- $70 less expensive than GoPro's previous Hero3. The camera is likely low margin with expectations of higher volume. But GoPro will make up for it with additional user-generated footage to license.

The other two cameras are priced higher than the equivalent models in the Hero3 line by $200. Without any mid-tier models, GoPro is pushing more users to higher quality cameras, which capture better footage. So, on one end of the spectrum you'll see an increase in footage volume and on the other you'll see an increase in footage quality. The results are both good for GoPro's content library.