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GoPro’s Continuing Struggles Are Bad News for Its Media Biz

Another bad quarter doesn’t spell good news for GoPro’s ambitious media plans: The action camera maker missed its own forecast for the third quarter, generating only $240 million in revenue for the three months that ended on September 30. This compares to $400 million in revenue during the same quarter last year.

GoPro shipped around one million cameras during the quarter, compared to close to 1.6 million cameras a year ago. This led to a net loss of $84.3 million, compared to net income of 36.6 million a year ago.

Executives blamed the shortfall on production issues with its new Hero 5 and Hero Session cameras during the company’s earnings call Thursday, but they also promised investors significantly lower operating expenses in 2017. This would potentially include some restructuring, said GoPro CFO Brian McGee, adding that the focus would be on the core camera business.

GoPro recently launched a new version of its camera, dubbed the Hero5 Black, which comes with a touch screen and integrated voice control. The company also introduced new cloud services, allowing users to upload their media to GoPro’s servers and then access it from any device. GoPro CEO Nick Woodman said during Thursday’s earnings call that this turns GoPro into an “end-to-end story-telling solution.”

Notably absent from those remarks were GoPro’s ambitions to build a media business that’s tied at the hip to its hardware and services business. The company has been investing some significant money into producing its own original content, with executives recently telling Variety of plans to launch 32 short-form shows towards the end of this and early next year.

To do so, GoPro has hired production veterans from HBO, MTV and Time Inc., which are leading a team of some 200 staffers on all things content. Aside from original productions, the team is also working on branded content, and building out a team of freelance correspondents around the world to expand its content productions.

GoPro executives have long described their media efforts as part of a virtuous cycle. Even if media licensing won’t become a cash cow in the near future, professional GoPro productions still work as ads for the product itself, which then leads to more users producing media with GoPro, or so goes the argument.

But with cameras not selling as expected, investors may start to lose patience with that line of thinking. On Thursday, stock cratered by 23 percent in after-hours trading, leading to a brief halt in trades.

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