Last week, YouTube's Chief Business Officer Robert Kyncl gave a keynote speech at the Consumer Electronics Show that was relatively unexceptional save for one thing: he brought GoPro (NASDAQ: GPRO) founder Nick Woodman on stage with him. This move is one of a series of hints that the two companies are collaborating, and the bond could grow deeper.
In this clip, Chris Hill and David Kretzmann talk about how GoPro might be able to help YouTube, and how YouTube's parent company Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) might step into the game as GoPro's stock price continues to fall.
A full transcript follows the video.
This podcast was recorded on Jan. 11, 2016.
Chris Hill: Let's move on to YouTube. Robert Kyncl, who's the chief business officer from YouTube, gave a keynote address. Not a lot of news out of it, but a little bit of a surprise that, at one point, joining him on the stage was Nick Woodman, who's the founder and CEO of GoPro.
David Kretzmann: Yeah, we definitely weren't expecting that. YouTube had a lot to follow. This keynote was the day after Netflix essentially stole the show. And I think Netflix is the highlight of CES. We were hoping to, I think, to get a little bit more from YouTube. Some sort of announcement with YouTube Red, maybe some original programming or content, something like that. But really, Robert Kyncl, the first part of his keynote was really just talking about digital video grabbing hold, how cable and traditional TV has peaked in 2009 and has since been dropping down as people are spending more and more time watching video on other mobile devices. And I feel like we all already knew that. But yeah, as you mentioned, there was kind of a surprise when Nick Woodman, GoPro founder and CEO, came up on the stage.
This is really coinciding with Kyncl talking about YouTube's venturing into virtual-reality programming. So, this is a 360-degree video where you can essentially have a full 360-degree panorama of any video that you're watching. So, you can watch this on a virtual reality device like the Oculus or Google Cardboard, or even if you're just on a desktop or laptop, you can kind of scroll around the video and get really unique perspectives, you can get that full 360-degree perspective. So, Nick Woodman was out there talking about how GoPro fits into that. GoPro partnered with Google earlier in 2015 with the GoPro Odyssey, which is a 16-camera array, so it's 16 GoPro cameras that capture that full 360-degree perspective.
And now, what I think is most relevant to GoPro shareholders is, Woodman mention that at some point this year, they're going to come out with a consumer virtual reality device. So, obviously, that 16-camera array, that's more than $10,000, but hopefully, sometime this year, according to Woodman, they'll come out with a more affordable mass-market consumer virtual reality device to capture that perspective. So, YouTube is very focused on virtual reality, and it sounds like GoPro is a pretty key partner to enabling that sort of content.
So, I know our colleague, Brendan Matthews, who's also out there, he's one of my fellow analysts in Motley Fool Supernova, he speculated on Twitter that he wouldn't be surprised if Google bought GoPro, because you can kind of tell, there's some sort of love fest going on there. They both have similar visions. YouTube wants to be a platform for all sorts of video, and especially this emerging virtual reality medium, and GoPro is a key player in enabling that sort of content. So I wouldn't be surprised, certainly, if we see some sort of partnership between the companies. GoPro is trading at a bigger and bigger discount every day, and Google has an enormous cash hoard. So, it wouldn't be surprising, if you saw GoPro get snapped up by Google at some point.
Hill: That was going to be my next question -- at any point, do you think, when it was just the two of them backstage alone, Nick Woodman leaned over to Kyncl and whispered, "Please buy us."
Kretzmann: Yeah, you do wonder. Woodman is a very charismatic CEO. Maybe that could be a fault of mine, getting enamored by his vision for the company, because he's a very inspiring speaker. But man, GoPro shares have just been clobbered over the past year or so. So, you've got to wonder, man, is Alphabet or Google making an offer to Woodman? Is that the saving grace for this company at this point? It's tough to say, because Woodman still owns 30% of GoPro. This is definitely his baby. And so far, up to this point, he's been really clear that he has long-term vision for GoPro. So, whether or not he wants to sell out, it'll remain to be seen.