What's the current state of the imaging industry? How is 2005 shaping up? Photographic Processing asked a number of industry suppliers and pundits to gaze into the future, and here's what they had to say:
Navigating the Digital Shift
By John Blake, general manager, Professional Output, Eastman Kodak Company
In a challenging and changing marketplace, professional labs face increasing demands to help photographers grow their businesses, make digital easier and find new ways to apply technology to move in new directions. Digital implementation (lab workflows/operations) is forcing discontinuities and market structure overhaul. At Kodak, we've taken a look at the state of the lab industry, where it's heading and how labs can navigate the coming changes.
- The Structure of the Pro Lab Industry is in Transition - Digital capture is eroding film processing and proofing sales/earnings. While photographer feedback shows that 96 percent have "somewhat" or "very strong" relationships with labs, there's an increasing shift toward photographers printing in-studio or at alternative channels (Walmart, Costco's etc.). Labs must also contend with shifting consumer attitudes as digital creates new norms. Consumers are in search of lower costs, new offers, and better experiences.
- Technology Disruption Creates New Opportunities - Online services are gaining momentum and finding their niche. The pro lab business model must shift from production operations to output services as they serve photographers differently. It's not just about making prints, it's about giving customers choice, control, and convenience. "Generation Y is challenging photographers, via labs, to offer more out of the memory experience," says Blake at Kodak.
- Pro Labs Serve Photographers, but Consumers Shape the Market - The consumer is your customer's customer and new consumer paradigms are shaping pro markets. Consumers want to do more, like share and connect and create "hip keepsakes" and labs must focus on unique products and services. The value is fast becoming the experience more than the product and labs must shift their emphasis to participate in the new opportunities with phone-cams, memory books and web-based services. Generation Y is also challenging photographers, via labs, to offer more out of the memory experience. They want images in hard copy, soft copy, online, and they want composites, collages and memory books. Labs that help photographers offer innovative products will be well positioned for success.
Above all, customer service will remain key to survival as the industry evolves. Quality is fundamental and deliverable; it's expected. Labs that lead with innovation, make it easy for photographers to do business with them - website access, real-time process monitoring, etc. - and improve cycle time will find themselves not only surviving but also thriving within the new paradigm.
Printing at Retail is a Key
By Kerry Flatley, consultant, InfoTrends/CAP Ventures
Digital camera ownership continues to grow. At the end of 2003, 30% of U.S. households owned a digital camera and 41% are expected to own one by the end of 2004. While this is good news for digital camera manufacturers, retail photofinishers continue to question if digital cameras will help or hurt their businesses.
For many retailers, digital cameras have had a negative impact on their business since many digital camera owners print at home. But over the past year, InfoTrends' surveys have revealed that more digital camera users are printing at retail stores. In a May Internet survey, 24% of digital camera users said that they had printed at a retail store - either at a photo kiosk or over-the-counter. In 2003, only about 10% of digital users had printed at retail.
Retailers are now more fully equipped with digital technology and are getting the message out through local and mass advertising - and it appears to be working. In a February survey, 32% of respondents said that their local film processing location could produce prints from digital cameras, while two years earlier 68% answered that they "didn't know". Print traffic should follow an increase in awareness.
What about the digital camera users who do not print any of their digital photos? InfoTrends' recent survey shows that about 11% of digital camera users do not print. Getting these users to print would certainly help increase print volumes. All digital camera users should understand that the lives of digital files are precarious when not backed up and one of the best ways to ensure that photos last for generations is through prints. If retailers emphasize this message, it could not only pull more digital camera users into stores for prints, but could also save families the heartache of losing photos to the shortcomings of technology.
Labs Investing in Digital
By Thomas A. Curley, director of marketing, Professional Markets, Photo Imaging Division, Fuji Photo Film U.S.A., Inc.
This year we saw labs making significant investments in updating their facilities to support the rise in digital imaging and we expect labs will continue to add new services and capabilities to support the evolving needs of professional photographers in 2005. In addition, while there has been an incredible rise in digital SLR cameras and most pro shooters have adopted some form of digital capture, we've found that many are still shooting some film. As a result, labs will leverage their expertise and maximize their technology investments by exploring hybrid workflow services and new products they can offer customers.
The combination of film and digital capture with quality scans after film processing is producing much revenue potential for photographers and labs alike. Today's professional lab has digital printers, computer systems to manage a digital workflow, and a website interface for customers submitting orders online. Once film negatives are scanned with a high speed solution, the lab can provide high resolution images on a CD to the photographer, who can enjoy digital from that point on.
Increasingly, now film and digital shooters are both turning to workflow software, like Fujifilm's Studiomaster PRO 3.0, to edit and place orders from their own workstations directly to the pro lab. This software presents photographers and labs with an opportunity to build incremental business and we expect this trend to continue. For example, labs can now offer CDs of pro photographers' slideshows which they can sell to clients as an additional product. And, images can also be shared online for incremental ordering as well.
The proliferation of digital images, in addition to continued film usage, is creating major demand for high quality wedding and portrait photography lab services. The challenge for labs is to adapt to new trends, and offer innovative ways to keep professional imaging a good business for all.