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The developing race for digital prints

With an estimated 9.4 billion digital images left unprinted in 2004, the stakes are high to perfect and popularize a consumer photo-printing solution. Kiosks seem to be making a dent in home printing - but do online photo services represent a threat?

June 8, 2005

About a month ago, I dropped off a roll of film at a photo processing shop, a high-service place where the owners make an effort to get to know their repeat customers. The woman behind the counter noticed that I hadn't been in for some time.

"So we haven't seen you for a while," she said, "Are you taking your film somewhere else?"

No, I replied, we had just made the move to taking mostly digital photos. Since the purchase of a 6-megapixel camera, our trusty 35mm Canon had been languishing on the shelf.

She clearly had heard this before, and was prepared to lay out all of the shop's new offerings specifically tailored to the digital camera user - uploads from home, kiosks with automatic red-eye reduction, membership clubs that offer specific discounts on digital prints.

Then, a thought seemed to cross her mind and her level of alarm visibly jumped. "You're not printing them at home, are you?" she practically shrieked. "I can do them for you much cheaper than you can!"

Traditional film processing companies - the smart ones, at least - saw the writing on the wall some time ago: Digital cameras change everything, and the business model needs to be adjusted accordingly. The prevailing questions, though, are how to change it and in what direction.

The stakes are high for getting all this right - according to the Photo Marketing Association's "Photo Industry 2005: Review and Forecast," an estimated 9.4 billion digital photos went unprinted in 2004. That's 9.4 billion potential transactions, unrealized.

Make it easy

The photo kiosk is a relatively young innovation, but it has done some amazing things in that short period of time. According to Francie Mendelsohn, president of Summit Research Associates, photo kiosks represent 25 percent of all kiosks currently deployed.

They also have quickly gained a great deal of consumer acceptance. News stories abound of long lines of soccer moms, cropping and printing their own photos with glee.

If home printing of photos represents as much of a threat to photo kiosk operators as my friend at the film processing shop seems to think, the numbers don't bear out her fears. In Summit's newly released "Kiosk Industry Sector Report - Digital Photography," Mendelsohn points out that photo kiosk use increased 374 percent in 2004, while home printing increased only 37 percent. And according to the PMA report, the share of prints made at home dropped to 61 percent in 2004, down from 76 percent the year before (despite a higher total volume of home prints).

The report studies 22 different photo kiosks currently in use, comparing an exhaustive list of features, strengths and weaknesses. One of the highlights of the report is a "top ten" list of must-have features. No. 1, as you might guess, is ease of use.

"If you're trying to do photo kiosks, you need to make it as fast and easy to use as possible," Mendelsohn told me. "One of the ways to make it fast is to really minimize the editing that the customer can do. I've seen people spend as much as 15 minutes on one picture. And the interface is so complicated that they gave up after the 15 minutes."

Indeed, an amateur photographer sitting in the comfort of his home, playing with a picture in PhotoShop, might be willing to try a whole battery of picture tweaks and improvements. A mom or dad using a kiosk in a grocery store, with kids in tow and 10 things left on the "to-do" list, will want simply to get the photos as quickly as possible.

Taking convenience to the next level

The idea of someone sitting at home, leisurely working with his or her photos, brings us to the next big challenge for the kiosk. If digital photography was a watershed, do-or-die moment for traditional film processors, a moment of similar intensity might be on the horizon for photo kiosk operators.

At Wal-Mart.com, shoppers can use a simple browser-based interface to upload photos, apply fixes and crop. The software tells the user exactly which size prints will look good at the provided resolution, offers speedy thumbnail previews, and makes it a snap to order multiple quantities of multiple sizes.

Once the session is finished, the user can either pick up the prints after a specified time at their nearest Wal-Mart store, or spend a few extra dollars and have them mailed to his home.

Kodak's Picture Center Web interface offers a similar solution for regional grocery stores like Kroger, Dillon's, Jay-C and Smith's. And services like Hewlett-Packard's Snapfish.com heap on value-added features like shareable online galleries and the ability to put customer photos on t-shirts, tote bags, coffee mugs, and even boxer shorts.

Online photo-printing services have not taken off with the same momentum that kiosks have enjoyed - according to the PMA report, photo kiosk use has increased five-fold since 2000, while online use has merely doubled. Online prints represented 8 percent of the market in 2004, versus 31 percent for kiosks.

But with online prices consistently lower than at the kiosk, it's not hard to imagine a heated battle on the horizon - especially as prices continue to drop in a market where every penny counts.