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PTN's State of the Industry 2007
PTN takes its annual look at the State of the Imaging Industry, its effects on retailing and where industry pundits see us heading in 2008.


John Loiacono; Adobe
Bill Mccurry; Mccurry Assoc.
Eliot Peck; Canon
Bill Heuer; Casio
Gary Shapiro; CEA
Chris Howard; Durst
John D. Lang; Epson
Bing Liem; Fujifilm
Rich Duncombe; HP
Christopher Chute; IDC
Alan Bullock; Infotrends
James Chung; IPC
Brent Bowyer; IPI
Machiko Ouchi; Jpeai
Mark Leathem; Kingston
Brad Kruchten; Kodak
Jeff Cable; Lexar
David Lee Nikon
Tina Tuccillo; Noritsu
Liz Cutting; NPD
Jim Dicarlo; Olympus
Richard Campbell; Panasonic
Ned Bunnell; Pentax
Ted Fox; Pmai
Matt Knickerbocker; Pmda
Mike Worswick; Pro Group
Stewart Henderson; Samsung
Wes Brewer; Sandisk
Toru Okada; Sony
Korosh Delnawaz; Whitech
Tim Sexton; ZBE

"Yet underneath the initial challenge lies an enormous opportunity," he suggests. "If we convert even 10% of the 115 billion images to a 4x6, we generate $2.3 billion in incremental revenue. Now imagine if we convert images into a photo specialty item, like a photo book. The margin for a photo book is equal to more than 200 4x6 prints."

"The entire industry must work hard to inform consumers of the many great products and services that are now at their fingertips, with special emphasis on printed images. There are still far too many people walking around today with camera memory cards filled with images that never appear on anything besides a camera or cellphone screen. Many of these folks still simply don't know how to unlock these images from their cameras, and we must continue to reach out to them. Others, however, may be failing to recognize the value of printed images," says Matt Knickerbocker, President, PMDA. "Prints become family heirlooms to be shared and passed along to future generations. They give us a window into our past that words can never match, and they need no batteries in order to be viewed. Electronic images will inevitably disappear. They'll eventually be lost in a computer crash or on an irreparably scratched CD. As an industry, we owe it to our customers to make printing the easiest solution and to provide the best combination of selection, quality and value," Knickerbocker continues.

ZBE's Tim Sexton, VP, Marketing, concurs, "The imaging industry needs to promote the art, uses, and value of small and largeformat photographic images.Industry leaders can do a better job than small businesses of promoting the exciting potential of the exceptional images amateur and pro photographers create every day but don't print."

"At the end of the day, we need to drive printing. We need to find a way to unleash the 115 billion images stored away. Because a picture isn't a picture until you print it," Kodak's Krutchten adds.

The Photofinisher of Tomorrow

"The great news is that the photo industry is keeping its momentum and constantly making inroads for a bright future," says Korosh Delnawaz, President/CTO, Whitech USA Inc. "One of the greatest developments is welcoming the document and print imaging people, like Xerox and similar companies who are showing a huge interest in Photo Retailing. They bring stable and proven technology and add a wide range of services with decent margins that photo retailers can sink their teeth into."

"We still have a long way to go in order to control and stabilize the new consumer spending behavior of our customers. But from what I can see and hear photo retailers are on track in establishing themselves as full custom imaging service providers," says Delnawaz.

While it's difficult to compete with those companies that can slash their margins and make up the difference in volume sales or as a loss leader, ZBE's Sexton notes, "Small, medium and specialty imagers can offer profitable imaging products and services that the wholesalers cannot or will not offer. Products like largeformat prints, murals and posters deliver healthy margins, and can provide a compelling reason for coming back to the local imager. Imagers with largeformat Digital RA4 imaging capabilities will have a competitive advantage because not only will they have the highest quality imaging products (true photographic prints) but they'll also have the lowest materials cost and the fastest, most efficient production capabilities," he adds.

"The specialty print is still where the margins are. What's different is that digital imaging systems exist today that can produce virtually every size and type of digital image to satisfy all the creative requests for photos, and do it in an 'over the counter' setting. Photo retailers and photofinishing labs should ask themselves if they're properly equipped to take advantage," says Christopher Howard, Sr. VP, Sales & Marketing, Durst Image Technology U.S., LLC.

"Today, in addition to their (somewhat smaller) stack of 4x6 snapshots, consumers want panoramics for bedroom walls and even odder sizes, like 7"x36" prints for the inside of school locker doors. Custom picture books are hitting full stride, but they require odd sizes and creative treatments, and other digital enhancements. Digital imaging systems put all these options within reach," Howard adds.

"This past year we've seen more and more photo retailers and minilab owners make the move to an alldigital photo lab and expect that trend to continue in the coming year. What's motivating retailers to take the fast track in moving towards this transition? New cost structures and revenue streams, which represent huge opportunity," says Rich Duncombe, HP's VP, Retail Photo Solutions. "At HP, we believe there are two key factors that will enable retailers to seize this opportunity—dry labs combined with creative output," he says; and ultimately give consumers "a great photography experience… enabling them to tell their stories, their way."

"Dry has captured the attention of retailers because it offers a number of attractive benefits. For example, the process eliminates chemical handling and waste disposal. Dry printers also offer simplicity. In some retail environments where there is high employee turnover, there are definite benefits to photo printers that require less training to operate. Dry is very low maintenance. Dry printers also tend to be smaller which may be important to retailers with limited floor space," explains Tina Tuccillo, VP, Strategic Marketing and Product Planning, Noritsu America.

However Tuccillo warns retailers and lab owners to research the solution they're looking to add to their shops. "As more offerings are made available, retailers should be aware that some dry technologies produce prints with significantly lower quality in comparison to other dry processes. Print quality has a direct impact on future revenues. A lowcost dry solution that makes "acceptable" prints is a poor investment if customers are dissatisfied with the output and don't return to the store."

Steve Giordano Sr., CEO/Chairman, Lucidiom Inc., explains that business owners need systems that can support the growing variety of products. "You must get all your business systems, software and equipment working together. Your backend and storefront equipment and software should make those great product options available across all mediums—store front, remote kiosk, online, and home desktop—so customers can order products no matter where they are or what styles they like. Plus your software needs to be able to accommodate future products. Easy, highquality products produced virtually ondemand and with new style options continuously available, will keep customers coming back and the retailer in business for the future."

Personalized Imaging Experiences

"…New systems and processes that are now available to even the smallest retailers offer fantastic profit potential. Our business has transitioned from the age of the "mass market," where millions of people bought the same thing, to the new age of "mass customization," where every individual consumer can create exactly what they want," says PMDA's Knickerbocker. "Personalized photo books, cards, calendars and other gifts can now be made onsite almost anywhere on systems costing far less than a traditional minilab just a few years ago. Retailers would also do well to offer a range of diverse products and services. Photo specialty retailers are better equipped than any other channel to meet the diverse needs of these demanding customers," he says.


   







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