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The photo kiosk industry: a snapshot of current trends

With the holiday season approaching, digital cameras everywhere are about to click into high gear - meaning more potential for photo kiosks and retailers. Here are some expert predictions on what to expect from the photo business in the coming months.

December 11, 2005 by James Bickers — Editor, Networld Alliance

The holidays are traditionally a time when people whip out their cameras and start chronicling each and every family gathering and event. In years past, that meant lots of rolls of film to be developed, making it a boom time for developers.

Increasingly, those cameras today are digital, and instead of rolls of film filling up, hard drives are flush with images. According to the Photo Marketing Association, digital camera sales were up in 2005 by 23 percent, while all other segments were down, as much as 74 percent for APS models and 33 percent for 35mm.

All those digital cameras in use can only mean one thing: lots of images waiting to be printed.

"When consumers began rapidly adopting digital, it resulted in a great many more images being captured, but it didn't necessarily translate into an explosion of prints," said Gregory Joe, marketing manager for Noritsu America Corp. "There is still very much a growth opportunity as the ratio of captured vs. printed images suggests that many people's important family memories are still languishing on hard drives."

Fighting `photo bloat'

An interesting thing happens when people start taking pictures with a digital camera: They take far more pictures than they would have if they were using film, and since they're usually taking pictures of people or things that are important to them, they can be loathe to delete any of them.

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The end result is a steady increase in the sheer number of photos on any given user's hard drive. And as Gary Pageau, publisher of content development and strategic initiatives for the Photo Marketing Association points out, that poses a unique challenge for those who are in the business of selling photo prints.

"As consumers accumulate more and more pictures on their hard drives, it's going to be discouraging and daunting to go back and print them," he said. "The industry has to do a better job of encouraging printing when consumers are most excited about them. That's usually within a few days of the event - after that, the momentum is gone. That's why convenience and ease of use are the killer apps for digital photography, not megapixels."

Another possible weapon in this battle is the growing number of online services like Flickr - often free of charge - that allow users to create albums of photos and store them online. Such services are often chiefly aimed at picture-sharing, but Pageau says they are ripe for integration with retail. "It will be a big business to tap into those online albums for in-store printing," he said.

Recent statistics from PMA show that photo retailers needn't be too concerned about online services that provide photo finishing with postal delivery; those services experienced only a 3-percent growth from September 2004 to September 2005, with kiosk use growing 11 percent in the same period. Home printing, meanwhile, dropped 12 percent.

David Oles, chief technology officer for Pixel Magic Imaging, believes photo kiosks will continue to dominate the market, and online services will increasingly integrate with retail for in-store pickup. "Photo retailers have the advantage of a faster turnaround time, no postage and more personalized service," he said.

Not just 4x6 prints

Interestingly, it might not be the traditional print that represents the biggest potential for photo retailers. Gift items, photo books and DVDs are emerging as new ways to generate revenue from consumer photos.

"The number of gift items being sold is astounding," said Chris Johnson, vice president of Silverwire Software, which specializes in the photo market. "We see the biggest opportunity in photo books, which in and of itself is a change and a challenge for photo dealer production."

More research on these key terms: Photo kiosk Printers Retail

Pageau said that such products have been around for a long time, but are coming into their own thanks to increased ease of use. "With digital photography and modern interfaces, ordering a photo book is a simple step-by-step process," he said.

But as the number of products grows - and, one would think, as the user base grows correspondingly - the pressure will be on both manufacturer and retailer to keep the quality high.

"There should be a better emphasis on output quality," Noritsu's Joe said. "As the installed base of photo kiosks continues to grow, more consumers will try kiosks for the first time. Just one encounter with a poor print is all it takes to sour the consumer's view of photo kiosks in general."

Quality matters now more than ever, Oles said, because people are simply taking better pictures than they used to. "The ability to compose and review using the camera's LCD is making a huge difference in the quality of pictures that are captured," he said.

The camera in your pocket

Experts also are keeping their eyes on the camera phone, which has potential to once again turn the digital photography world on its ear.

As it stands, the fulfillment market for camera phone pictures is scattershot at best; getting pictures out of a phone and onto some sort of readable media is a chore, interfaces vary widely, and resolutions are still not as high as they'll need to be to take the place of the dedicated digital camera.

Johnson said he believes that once camera phone manufacturers get the kinks worked out, aggressive growth will follow - perhaps even more aggressive than the first wave of digital, due to the immediate availability of the device.

But there is much work to be done. "The largest hurdle for camera phones is the standardization of the phone user interface and billing, which are still far off from becoming unified among all carriers," he said.

While phone manufacturers work to improve the phone itself, kiosk companies are working hard to simplify the process of ordering prints. At the fall 2005 Self-Service & Kiosk Show in San Francisco, St. Clair Interactive demonstrated a new photo kiosk application that could wirelessly detect a cell phone in the user's pocket, read the photo information from that phone and automatically pull the pictures into the kiosk app.

About James Bickers

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