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Online Photo Service Vendors Challenged to Expand Their Businesses Under Increasingly Competitive Conditions, According to a New Report By InfoTrends

Posted on: Tuesday, 28 February 2006, 09:00 CST

According to a new forecast report from InfoTrends, online photo service vendors' heavy reliance on photo printing will begin to slow revenue growth over the next five years. U.S. online photo print revenues are expected to increase at a compound annual growth rate (CAGR) of 8% through 2010.

Over the course of the past three years, online photo service vendors have experienced strong year-over-year membership growth and significant increases in digital print revenues. The market also benefited from several high-profile acquisitions during 2004 and 2005. Additionally, vendors have been able to increase the conversion rate of photos uploaded to photos printed, which has improved their bottom lines.

Nevertheless, challenges remain for the future. As viewing and sharing photos becomes easier, consumers may find fewer reasons to print. Add to that a maturing digital camera market, the emergence of retail online photo services, and the ongoing dilemma of relatively low market awareness regarding online photo services, and you have a market in transition.

"Online photo service vendors will need to become less dependent on 4" x 6" prints," says Jill Aldort, a Senior Consultant at InfoTrends. "They must consider new areas like photo and video sharing and storage, while placing a greater focus on lucrative lines of business such as photo merchandising."

Consumers are increasingly intrigued by new photo and video sharing communities. A big question for online photo services will be how to move beyond printing to form collaborative destinations for photos, videos, and other digital content.

InfoTrends' new forecast entitled 2005 Online Photo Services Forecast and Analysis is available immediately. It provides a five-year forecast for total online photofinishing revenues, including the number of online photo service users, photos uploaded, and prints ordered by registered members and visitors. The report provides market share information for the leading vendors and an analysis of ongoing market issues and trends. It also profiles nearly 20 key players, including Kodak EasyShare Gallery, Shutterfly, Snapfish, Sony ImageStation, Wal-Mart, and Yahoo! Photos.

About InfoTrends

InfoTrends is the leading worldwide market research and strategic consulting firm for the digital imaging and document solutions industries. We provide research, analysis, forecasts, and advice to help clients understand market trends, identify opportunities, and develop strategies to grow their businesses. Additional information about InfoTrends is available on the Web at www.infotrends-rgi.com.

Source: Business Wire

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