If Action Cams Are Over, What’s Next?

GoPro, the inventor of and leading seller of action cams, recently announced what it called a “deep loss” for its first quarter 2016. It was GoPro’s second straight quarterly drop after several years of storybook hockey stick ascent to top of the camcorder selling stack.

Not that we want to kick a company when it’s down, but we are not surprised at GoPro’s recent struggles. Considering the faddishness of the camcorder business in the last decade-plus, the whole action cam phenomena seemed just like another short-lived mania.

This observation is not 20-20 hindsight, however. In a blog entitled “Lights, Camera, Action Camcorders” posted 13 August 2012, we noted that “[a]s with all fad product trends, the action cam rush is unsustainable.”

At the time, we questioned the size of the sustainable addressable market for action cams. “How many outdoor types are there who will buy all these action camcorders?” we pondered. We then concluded that “action cam sales action…is likely to fade far faster than the pocketcam business.”

Lest you think that this is some kind of self-congratulatory victory lap (okay, it is, a little), we only got the general part of our prediction right.

Overall, the action cam vogue will likely last a bit longer, certainly longer than the less than five-year lifespan of the pocketcam. Unlike Flip (RIP), Kodak (RIP), et al, and despite its recent woes, GoPro is still a going concern. GoPro models still monopolize Amazon’s top selling Sports & Action Video Cameras category and the company is still selling lots of action cams, as are multiple other going action cam concerns, such as the company that now owns the Polaroid brand, GeekPro, Yi, Contour, Ion, Xiaomi and the company that now owns the Kodak brand for its budget PixPro models.

While we remain cynical about the long-term prospects of the action cam business, our crystal ball didn’t reveal what might replace – or, perhaps, complement – it.

We think we know now, however. But it may not be what you think.

Is VR the Next Big Thing?

Virtual reality elicited exclamations of wonder and some of the longest lines ever seen at CES, mainly at the Oculus and Samsung Gear VR booths. Facebook (via Oculus) and Samsung have made big bets on the future of VR, with Samsung as well as its Korean frenemy LG introducing VR/360-degree/spherical cameras in the last few months. Nikon could be the first mainstream digital camera maker to join the VR fray with its ungainly-named KeyMission 360, supposedly due sometime before the leaves turn.

And at its I/O developers conference last week, Google unveiled its Daydream VR platform, with headset, controller and app reference designs. It would be surprising (and disappointing) if Apple didn’t have some VR additions to its iOS version likely to be announced at its developers conference next month.

But the VR market is still developing. Samsung’s Gear VR reportedly just topped 1 million “users” –whatever that actually means. Otherwise, sales of VR/360-degree/spherical cameras is still measured in the relatively meager hundreds of thousands.

There is, however, a more mature 360-degree hobbyist community. Millions have viewed 360-degree videos on YouTube’s 360 Video Channel and Facebook’s 360 site, for instance. Several VR/360 camera companies host their own 360 galleries as well, such as Ricoh (Theta S) and Kodak (PixPro SP360). And, perhaps mirroring its influence on the home video revolution in the 1970s, VR porn is beginning to become a thing as well. A PornHub search (for purely academic reasons, of course) yields several VR videos, and there’s already a dedicated VirtualPorn360 site.

But the VR/360-degree/spherical camera business is still new and small enough that, as you can see, nomenclature is kind of a problem. And some folks would argue that whatever-you-call-them is simply a subset of action cams, so our entire end-of-action-cam thesis can be semantically challenged is VR cams become the next big thing in camcorders.

VR Camera Market Pros and Cons

VR/360-degree/spherical cameras face an even smaller addressable market than we thought action cams did, thanks to both recording and viewing pre-reqs.

First, shooting 360-degree video requires all new technology. Since VR’s recorded field-of-view expands from 100-140 degrees of traditional HD video to 360 degrees, spherical cameras need multiple lenses whose images have to be seamlessly stitched together, and need to accurately and smoothly render three or four times the number of pixels. Plus, experiential 360-degree videos are designed to be viewed via goggles, with the image floating just a few inches from the eyes, which increases the need for more, smaller and denser pixels.

Second, there’s the viewing problem. Sure, you can view videos on many of the aforelinked Web sites. But to experience what VR is really all about, you need VR goggles or a VR headset. It could be a complicated Oculus or a simple Google Cardboard, but you still need this extra thingy not necessary to view standard or even action cam footage.

Aside from high-profile support from Facebook, Google and possibly Apple, VR cameras also have three things going for them that action cams didn’t.

First, VR cameras have a natural upgrade path and, therefore, a natural replacement cycle that action cams lacked. Since 360 camera technology is still relatively primitive (wait a few years when today’s 360 cameras will seem like VHS compared to UHD Blu-ray), enthusiasts will constantly trade up for newer models with higher resolution – 4K, maybe even 8K one day – better stitching algorithms and improved de-warping technologies to flatten out weird fish-eye views. Both new VR cameras and viewers imbued with these higher-res and advanced technologies also will require greater processing then currently offered in currently existing VR recording or viewing gear.

Second, 360 cameras will be part and parcel of another bona fide technology phenomena: drones. Yes, we have no drones with integrated 360 cameras – yet.

Third, Hollywood has taken note. NextVR has partnered with several media outlets to produce live VR broadcasts, including with NBC for live VR coverage of the just run Kentucky Derby and with Fox Sports and Live Nation to VR disseminate a number of future live events. The Syfy Channel is shooting a futuristic VR series called “Halcyon,” and there were more than two dozen VR exhibits and films shown at the Sundance Film Festival.

It’s not hard to imagine Avatar 3 in VR becoming The Jazz Singer of VR, shown in theaters with a VR headset at each seat.

Of course, there’s no guaranteed correlation between “users” of VR headsets and viewers of VR videos, or with Hollywood productions, to actual sales of VR cameras. But action cams lacked this kind of pop culture content imprimatur, so who knows what influence Hollywood will have on VR camera sales.

The VR Wild Card

You’ll excuse this concluding flight of fancy, but the growth of VR cameras could be stunted – as all imaging devices have been – by the smartphone.

As noted, Google is laying the groundwork for all Android phones to be VR friendly, even smartphones running an OS as old as Jelly Bean. The search giant says there could be new Daydream-ready phones from Samsung, HTC, LG, Huawei, Asus, ZTE or Alcatel available this fall.

But Daydream-ready phones are designed to only play VR content. What about recording it?

All smartphones are built with cameras front and back, the exact form factor of many VR cameras including the Ricoh Theta and the LG 360 Cam. Considering the processing power contained in a smartphone, it’s not a stretch to imagine a smart smartphone maker to include even rudimentary 360 video recording capabilities in some future model.

Come back in five years and let’s see what we got right about VR cameras. Because if we get it wrong, you’re unlikely to hear it from us.