Let's state the obvious: printing has substantially declined over the past six to eight years. The physics of film necessitated printing and that process held friction in creating prints from negatives. Few photographers and even fewer consumers could develop film and transfer it to a print. Therefore, they turned to the experts—whether a professional lab or a retailer—to reduce that friction and, in the process, receive a valued service and treasured product—the printed image.
Now, with the proliferation of digital cameras, smartphones and handheld video devices, we have consumers capturing more images than ever before, while at the same time, printing fewer. Rather than focus strictly on the numbers of prints being made (or in this case, not made), we looked at causality—why do consumers increasingly opt out of printed images and, more importantly, how do we bring them back?
In recent years, everyone has introduced some kind of photobook offering. A glimpse at the research and the profit pool potential explain why. When recouping lost printing profits, retailers need a margin dollar-to-margin dollar replacement rather than a unit-to-unit replacement. According to research by InfoTrends and Kodak, U.S. consumers in 2008 created and ordered 12 million photobooks. That volume grew to over 20 million photobooks in 2010. Those 20+ million photobooks drove nearly $600 million in revenue and more importantly almost $200 million in gross profit! One photobook generates the same margin as approximately 200 4×6 prints.
Yet, as opportunistic as these offerings are, we still have yet to see that movement toward widespread adoption, and purchase, of these premium output products. To fully understand this, we need to take a step back from the point of purchase and focus on what happens prior. Kodak research shows that moms today are in a quandary—never before have they had so many pictures, but at the same time they've never had so few. Today, our images are scattered across multiple devices, both in terms of capture and storage. We have images on our cameras, our iPhones, our video cameras, our desktop, on Facebook and online sites. This has created a new point of friction, not in capture to print, but in digital image organization, access and retrieval, display, etc. We need to reduce that point of friction and better enable consumers to experience the emotional richness of their memories, as prints as well as premium output products.
Just as important as the printed premium offerings are the soft copy offerings—DVDs, multimedia and web-based imaging alternatives. This emerging digital ecosystem is driven by the utility of digital files where connectivity is real-time/all the time and reach is infinite across the community. The rise in social networks and smartphones/mobile apps will only increase the demand for images on our 'screens.' Rather than totally replacing prints and pages, the 'screen' is a complement and gives rise to new models for 'output' profits.
At Kodak, you've seen many initiatives in recent months designed to remove that point of friction: Technologies that access images from multiple sources, including Kodak Gallery, Facebook and Picasa; technologies that organize and layout images for output creation; and technologies that embrace the screen, enabling consumers to easily share images and videos across multiple platforms, including e-mail, Facebook or on digital frames, as well as view and create innovative soft output. Each of these solutions makes the sharing process simpler and removes points of friction.
Against this backdrop, I would offer retailers and professional labs the following advice.
1. Think about the points of friction that inhibit the consumer and ways to circumvent or completely negate that friction, creating a better consumer experience.
2. Sell the print, but offer so much more. The print is one dimension, but look for gross profit from things like photobooks and other premium output. These products tap into the emotions of the consumers, key to driving a purchase.
3. Embrace the 'screen,' and enable the consumer to incorporate things like music and videos into their output. Prints, pages and screens are not mutually exclusive, but rather a new equilibrium that enable consumers to share their stories in the fullest way.
Therefore, create an ecosystem that supports a balance of prints, pages and screens to yield the best offering to consumers, while also maintaining profit margins.
Ed Monahan is WW Strategy Director, Paper and Output Systems at Eastman Kodak. A 25 year veteran of Eastman Kodak, he drives strategy and future products, markets and businesses for Kodak's Paper and Output Systems.
