Worth a Thousand Words ; Custom Photo Products Help Replace Profits Lost From Film
By Ben Dobbin
ROCHESTER, N.Y. – More Americans than ever are wearing their photographs. Or eating them. Or showcasing them oncalendars, greeting cards and china plates.
In the versatile digital age, picture-bearing merchandise is a booming segment of the photo printing market – and a lucrative one, too. Now the mostly online arena appears poised to gravitate big- time to the corner pharmacy.
Scores of online players, led by Shutterfly Inc., Eastman Kodak Co.’s Kodak-Gallery.com and Hewlett-Packard Co.’s Snapfish.com, tout a variety of photo novelties, from laser-etched crystal ornaments to personalized postcards, key rings, T-shirts, purses, mugs, mousepads, birthday cakes and lollipops.
Kodak and Japan’s Fujifilm Holdings Corp., which divided up the traditional film market, are unveiling new technologies and partnerships designed to counter eroding profits from film processing by reeling in custom-photo customers via retail channels.
U.S. sales in the specialty market – counting online and retail – jumped 50 percent to an estimated $694 million in 2006 from $461 million in 2005 and could reach $951 million this year and $1.2 billion in 2008, according to Photo Marketing Association International, a trade group whose annual convention opens Thursday in Las Vegas.
“The photo industry is desperately looking for ways to replace the money lost to lower volumes and lower prices for basic 4-by-6- inch prints,” said Alan Bullock, a consumer-imaging analyst at InfoTrends Inc.
“There’s a whole slew of products out there generating higher margins than 4-by-6 prints ever did. When people see one for the first time, they go, ‘Wow, that’s really cool!’”
The swift transition to a world without film triggered a slide in the overall number of snapshots converted into prints.
Digital and film images ordered from retailers and Web sites or made at home fell from a peak of 30.3 billion in 2000 to 26.6 billion in 2006 and could bottom out at about 22.5 billion by 2009, predicted Dimitrios Delis, research director at the Jackson, Mich.- based Photo Marketing Association.
But the blossoming of often pricey alternatives, from photo apparel to putting computer reproductions of images onto posters, Jacuzzi tiles, furniture and tombstones, drove an 11 percent jump in overall revenues from $9.9 billion in 2005 to $11.1 billion in 2006, Mr. Delis said. The latest number includes $6.7 billion in sales of digital cameras, which analysts say have landed in almost 60 percent of America’s 110 million households.
Redwood City, Calif.-based Shutterfly, which generated $40 million in fourth-quarter sales of personalized products such as photo-adorned necklaces and hand-bags, is the biggest online player with a 25 percent share, said analyst Chris Chute of IDC Corp.
“There’s just inherent limitations as to what you can do in retail,” Chief Executive Jeffrey Housenbold said. “You don’t have the creative choices, the high-quality user experience. And you don’t have the time or the convenience when you’re in retail.”
Kodak, which has more than 75,000 photo kiosks installed at retail businesses worldwide, is hoping to solve that.
In May, it will offer free software to enable shutterbugs to design photo books, mugs and other custom items at home that can then be produced at retail stores in hours – rather than days when ordering online.
“Eighty percent of all images reside on the home PC,” said Brad Kruchten, general manager of Kodak’s retail printing business. “You want this to be an enjoyable process, so doing it in your home is, we believe, a better alternative than standing in the aisle.”
(c) 2007 Augusta Chronicle, The. Provided by ProQuest Information and Learning. All rights Reserved.