Digital era not all negative for photo shops
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NEW YORK (Reuters) -- What's wrong with this picture? With booming digital camera sales, one would think old-style photo developers would be going the way of glass-plate negatives and exploding flashes.
But with many Americans snapping up rock-bottom priced digital cameras this holiday season, retail photo developers -- who have lost business during the digital revolution -- are actually gearing up for a revival.
They figure the growing ranks of digital imaging converts -- particularly women -- will trust the photo shops to make quality prints of their daughter's wedding or portraits of the new baby, rather than spend time doing it at home themselves.
The home printing phenomenon has become big business for companies like Hewlett-Packard Co. and Lexmark International Inc., which sell the paper, ink and printers for use at home in a "digital dark room."
But their grip could be starting to slip, now that digital camera use is spreading to less technically minded "average Joes," who are less inclined to spend time fiddling with cables and buying costly ink and paper to print at home.
"The truth is that the majority of people don't want to come home from vacation and sit at their computers reviewing and printing all those shots," Mark Roth, president of Argraph Corp., a maker of photographic and imaging products, wrote recently in Photo Trade News.
This phenomenon has drugstores, supermarkets and photo shops installing new minilabs and photo kiosks in an attempt to sway customers from home printing, which has been stealing consumers from the $7 billion photo developing industry.
Old-style photo developers say if millions of consumers could trust them with their film photos, they can also trust them with their digital prints.
"We don't think consumers are interested in becoming photo-finishers. They want us to take care of that," said Michael Polzin, a spokesman for pharmacy chain Walgreen Co., the No. 2 U.S. photo developer behind Wal-Mart Stores Inc.
According to the Photo Marketing Association, Americans are expected to print almost 4 billion digital images this year, up from 800 million in 2001.
Print price cuts
The industry body says, although the lion's share of the prints would still be made at home, a growing share is poised to go to mass market photo developers, whose prices are as low as 24 cents per digital print, compared with up to 75 cents per home print.
"If the consumer really wants a professional-grade print, increasingly that service is getting more affordable. Print prices at retail are certainly going to get lower," said Sean Wargo, an analyst at the Consumer Electronics Association.
As an example, Walgreen says its drug stores cut the price per print to 20 cents, if a customer orders 50 or more prints.
Mass market developers, like Walgreen, have replaced outdated equipment with minilabs that allow consumers to order digital prints even from home via the Internet.
Scott Auer, Kodak's director of worldwide kiosk strategy and operations, said his company's kiosk installations at retail photo developers were "growing by the day," with about 25,000 machines in place in the United States.
"The strong popularity of digital cameras is giving retailers who have traditionally offered a photofinishing service another reason to upgrade to be able to handle digital media," said Harvey Phillips, vice president marketing and strategic planning at Noritsu America Corp., a maker of on-site photo processing equipment.
Retail printing to jump
The Photo Marketing Association estimates the home printing share of all digital photo output this year will slide to 71 percent from 84 percent a year ago. At retail, it forecasts traditional photo developers' share to jump to 22 percent from 9 percent a year ago.
Until recently, the majority of consumers had opted to stash their digital pictures on a home computer hard drive or print a few at home. But that may be changing.
Kerry Flatley, senior research analyst at market research group InfoTrends, said the popularity of home photo printing was coming under pressure from a marketing push by retail developers.
"Many consumers who are purchasing digital cameras this holiday season are not as nearly tech-savvy as the early adopters of this technology. They are the type that would prefer printing at retail," Flatley said.
Digital cameras debuted about seven years ago, and this year they are among the fastest selling holiday items, bolstering prospects for increased demand for photo printing.
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Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
