Leading portable camera maker, GoPro, Inc. (GPRO) inked a deal with The National Hockey League (‘NHL’) and the National Hockey League Players' Association (‘NHLPA’) on Jan 23, to enhance viewers’ experience of the game by introducing cameras from the angle of players and referees. This is the first professional sport league deal of GoPro.
For this, GoPro earlier collaborated with UK-based Vislink – a communication services provider – for providing professional broadcast solutions. As per the deal, the two companies will develop a minute transmitter that can be worn or mounted on distinctive areas for enabling a unique, live high definition (“HD”) broadcast experience for viewers. This marked GoPro’s first initiative to provide its offerings in tune with the demand for live HD transmission of events.
Coming back to the NHL deal, GoPro will set up its HERO cameras on the players, referees and around the rink during the 2015 NHL All-Star Weekend, to be held from Jan 23 to Jan 25 in Ohio. Viewers will be able to see the live footage, as collected from the placed cameras, during the national and regional game broadcasts. Moreover, these prerecorded footages will be shown on the NHLPA, NHL and GoPro online channels.
Although the shares of GoPro gained around 9% on the day the news was announced, the shares dipped 4% during the regular trading session on Jan 26. Notably, GoPro has been facing extreme price volatility, ever since its IPO launch in Jun 2014. While the company has a sound business model, its size, limited scope for differentiation and intensifying competition remain causes for concern.
In our view, the NHL deal is a strategic fit for GoPro as it steers the company’s broader market expansion goals. Moreover, linking its name with one of the most popular games in the U.S, boosts GoPro’s product recognition among hockey fans in the nation.
Lately, the company has been aiming at enhancing the demand and popularity of its HERO Cameras via a spate of notable deals. These cameras can be attached to moving objects or even people, and are specially used by sportsmen or sky divers to capture intricate details of a sporting episode.
Apart from the Vislink agreement mentioned above, GoPro stated its selection by Marriott International, Inc. (MAR) for a test drive of its GoPro HERO4 cameras by the tourists residing at 17 of the renowned hotelier’s hotels and resorts. Also, earlier this month, the company launched its GoPro Channel app for LG Smart TVs in collaboration with LG Electronics USA, a unit of LG Display Co., Ltd. (LPL).
Encouragingly, GoPro currently carries a Zacks Rank #2 (Buy). Another better-ranked stock is Skullcandy, Inc. (SKUL) having a Zacks Rank #1 (Strong Buy).
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