Finisher’s Corner: The Changing Photo Output Market

Finisher’s Corner: The Changing Photo Output Market


We recently updated our worldwide forecasting program at Photo Imaging News for the production of personalized photo products, not including individual prints but covering photo cards, photo books, CDs/DVDs, collages/posters, mugs, canvas prints and metallics. Our estimates of the U.S. market are shown in Figure 1.

    Figure 1: U.S. Sales of Personalized Photo Products

DonFranz-Fig-1-US-PPPWhile we have included specific products in the “other” category, there are thousands of photo products available to consumers. And more are being added every day. If we were able to estimate the number and value of all photo products, the market size would be significantly larger. The rapid expansion and proliferation of these nontraditional photo products has created some challenges to long-established photofinishing companies.

At the 2105 Dscoop EMEA in Dublin, Ireland, Oliver Carey from Harrier (, a major UK-based photofinisher, spoke about “Adapting to Peak Seasonality,” one of these challenges. Retail stores experience a rush of customers 30 minutes before closing on December 24. Large-production photo service providers (PSPs) experience a similar rush. 20% of their yearly print volume is concentrated in only the four weeks leading up to Christmas. This represents 5% of the annual volume in a single week. This creates difficulties such as excess capacity during slower periods, workforce planning, cash flow constraints and capital expenses management. During the film era, Harrier processed about 15 million films to produce fewer than 50 products. Today, it no longer processes film but makes more than 500 products from digital images.

During a speech in early 2015, Reiner Fageth from CeWe (, the largest photofinishing company in Europe, spoke about adding videos to photo books and other products. Due to upload issues, the maximum video length is restricted to five minutes. The file size of a video is usually equivalent to the size of all images of a photo book order. As a result, this doubles the upload time. CeWe uses QR codes to link the printed products to stored videos. Obviously, PSPs are no longer merely printers; they have been required to develop many digital and IT skills and have evolved into e-commerce companies.

Mobile Product Creation

The emerging preference for creating and ordering photo products is mobile. Websites are being adopted to provide the same experience to mobile users as they do to computer users. In addition, since mobile users will spend far less time on the website, the ordering process is being simplified and, in many cases, the product portfolio limited for mobile users.

Another challenge is the relatively low barrier for companies outside the photo industry to enter the photo business. Since a key skill is e-commerce, commercial printers, who have been listening to speakers over the past few years extoll the high profit margin of photo products, have entered the market. These companies have large, high-speed digital presses that produce a range of photo products in a short time. Some of them have entered into agreements with retail chains to offer photo services. This provides an “order online, pickup at retail” service.

Other e-commerce companies have partnered with production facilities. Hence, they can provide the creation and ordering technology without investing in printing. In fact, most e-commerce sites offer a photo output option today. So consumers can order photo books and other products directly from their content on social networks.

For numerous independent photo retailers, this competition has become their death knell. Hence, the number of small retailers is shrinking rapidly. Others have diversified into the printing of invitations, postcards and other items available from quick printers, who, ironically, are also expanding into the photo market.

In a recent study we performed of the photo booth market, we were surprised by the number of photo retailers who rent out these self-service photo-taking devices for many occasions—and the profits they are generating. As a result, Photo Imaging News is planning a more detailed study of this market opportunity during 2016.

The Mobile App Factor

In addition, consumers are being overwhelmed by the number of apps that are available. However, Figure 2 shows the extent to which new entrants can develop a market niche with a mobile app. Kealan Lennon, CEO of Cleverbug ( says his company has captured the publicly unknown birthday and special occasion data at an individual level for approximately 200 million people. Over 150 million people have now seen a CleverCard on their Facebook newsfeed, and Cleverbug has amassed 140 million birthdays. He estimates that “gifting” is a $200 billion business in the U.S. alone, and Cleverbug has 71 U.S. production partners.

                    Figure 2: Cleverbug Social Graphs

Source: Cleverbug

In conjunction with the dynamic rise in specialty photo products, the number of “traditional” prints being produced continues to decline. However, if we look at all the “prints” being made, including those on postcards and in photo books, we see a different trend, as shown in Figure 3.

Looking at the graph, you can see that even as the number of individual prints being made from digital cameras continues to decline, the number of prints being made from smartphones is rising. Most of the photos taken on smartphones are uploaded to social networks. Consequently, there is a growing number of prints being printed from these same social networks.

              Figure 3: Changing Photo Printing Trends

DonFranz-Figure-3-US-PrintsAre the independent photo retailers prepared to offer their customers the capability of making prints, photo cards or photo books directly from social networks? The latest generation of photo kiosks is able to receive orders over the Internet. They can also connect with partners who can manufacture a wide range of photo products. In addition, they can make prints and some other products immediately.

Not too long ago, photo retailers had to spend time teaching their customers how to make prints through input terminals or photo kiosks from their digital cameras and cameraphones. Today, they can spend more time with their customers teaching them about the wide range of products they can create with their images.

The photo output business is changing very rapidly with advances in technology. Can those longtime photo specialty retailers invest in resources fast enough to avoid being swept away by the new competitors in the output market?