GoPro wants to be a media company, but doesn’t know how to make money with media yet

Digital video camera maker GoPro filed to go public Monday, and the company’s S-1 filing not only revealed plans to raise up to $100 million and list on the NASDAQ under the GPRO stock ticker, but it also showed that GoPro has big ambitions for media — though it doesn’t quite know how to make money in that space yet.

That’s something that GoPro has figured out very well when it comes to it’s core camera business: In 2013, GoPro had revenue of $985.74 million. And with more than $60.58 million in net income, it made almost twice as much money as the year before ($32.26 million). That’s because the company’s digital video cameras sell like hotcakes: GoPro sold 3.9 million cameras and accessories in 2013, up from 2.3 million in 2012.

But digital cameras are easy to commoditize, and phones are getting better and better at replacing them completely — just ask the makers of Flip, which was once the market leader for small digital cameras, only to be shut down by Cisco (s CSCO) in 2011. That’s a danger that the folks at GoPro are acutely aware of. From the S-1:

“Smartphones and tablets with photo and video functionality have significantly displaced traditional camera sales. It is possible that, in the future, the manufacturers of these devices, such as Apple Inc. and Samsung, may design them for use in a range of conditions, including challenging physical environments, or develop products similar to ours.”

That’s why GoPro has been pushing to become more than just a camera maker. The company wants to help distribute some of the footage shot with GoPro devices, and make money doing so. It has invested in what calls the “GoPro network,” which really is more like a multi-channel distribution strategy, building out a digital presence on Facebook, Instagram, Twitter and YouTube, and striking distribution deals with Virgin America and Microsoft.

gopro network

Again, from the S-1:

“We believe consumer demand for compelling content combined with GoPro’s self-capture technology and the explosive popularity of social media create a significant media opportunity for GoPro. GoPro programming has developed a dedicated and growing audience. To continue to scale this audience, we have built a team of production professionals who regularly produce content based on inspiring stories from around the world, captured exclusively with our products. In addition, we actively curate and redistribute, with permission, our customers’ most compelling content as GoPro-branded content. We believe GoPro is well-positioned to become the first media company whose content is captured exclusively using its own hardware. To date, the GoPro Channels on YouTube, exclusive of our customers’ own shared content on their personal YouTube channels, have generated over 450 million cumulative video views.”

However, the company also says that it hasn’t made any money with that type of content in 2013 and it expects to make “the substantial majority” of its revenue from hardware “for the foreseeable future.” This year, it struck a deal with Microsoft (S MSFT) that will result in some ad revenue, and it started to monetize its content on YouTube and Virgin America, but GoPro doesn’t expect it to be material. Figuring out how to make money with all that footage captured by GoPro cameras will be a big challenge for the company, and it freely admits that it’s entering new uncharted territory with this strategy. From the S-1:

“The execution of this business strategy requires different skills from our historical core focus of developing capture devices.”

In other words: Making money with media is hard, and there’s no guarantee that GoPro will get it right.