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 user 2003-12-17 at 10:35:00 am Views: 77
  • #4263

    The Push For More Digital Photo Prints

    NEW YORK – If you use a digital camera, you probably don’t print many of the photos you take–a big problem for the companies wanting to profit from the process.

    Printer manufacturers have tried valiantly to encourage consumers to make more hard copies of the digital photos they take, in order to sell higher-profit-margin supplies such as printers, paper and ink. But only 20% of digital images captured were printed in 2002, according to the latest Photo Marketing Association survey. Respondents said time, quality, price and ease-of-use factors kept them from printing more. 

    Indeed, companies such as Hewlett-Packard (nyse: color=#0000ffHPQ color=#0000ffnews - color=#0000ffpeople ), Lexmark (nyse: color=#0000ffLXM color=#0000ffnews - color=#0000ffpeople ), Canon (nyse: color=#0000ffCAJ color=#0000ffnews - color=#0000ffpeople ), Seiko Epson, Olympus (nyse: color=#0000ffCAJ color=#0000ffnews - color=#0000ffpeople ) and Eastman Kodak (nyse: color=#0000ffEK color=#0000ffnews - color=#0000ffpeople ) make almost nothing on the printers they sell. The money is in the materials used to make prints. For instance, HP sees profit margins of about 65% on inkjet paper and ink, and roughly 30% margins on laser printing supplies, says Richard Chu, an analyst with SG Cowen Securities.

    When the 23 million households with digital cameras do print photos, they generally do it themselves at home, which is why the industry is now keenly focused on making the digital printing process easier.

    Industry experts attribute the low ratio of printed photos to digital images that are stored in part to the prevalence of viewing photos via e-mail and on photo-sharing Web sites. But there is a litany of other hurdles standing in the consumers’ way, from difficulty transferring photos from camera to printer to simply keeping enough photo paper and ink on hand.

    “There are so many ways for people to get into trouble when they try to print photos at home,” says Kristy Holch, principal at Infotrends Research Group.

    HP and Kodak are beating the competition by enabling printers to bypass the PC, according to David Haueter, principal analyst at Gartner Dataquest’s Digital Document & Imaging Group. Consumers say the technical problems with downloading digital images on a computer are one of the biggest obstacles to printing.

    Both Kodak’s EasyShare and Hewlett-Packard’s Photosmart lines feature printers with memory card slots as well as printer docks that allow cameras to connect directly to the printer. The catch is that you have to own a Kodak or HP camera.

    HP is also trying to get more people to share digital pictures electronically because that gets more people making prints, says Jim Ruder, VP of Personal Inkjet Printing. Its Instant Share software lets consumers preprogram e-mail addresses and photosharing Web sites into their cameras. After snapping pictures, users specify where they want them sent and the pictures are mailed the next time the camera is connected to the PC.

    The recipient gets an e-mail with a thumbnail image of the picture and a link to a high-resolution version on an HP Web site that can be printed at home. Viewing photos via Instant Share is free; users only pay for the prints they order. Those who receive e-mail photos with the Instant Share print four times as many photos than without it, according to the company.

    Also making photo printing simpler is the development of the PictBridge standard, which enables a connection directly from the digital camera to a printer via a USB cable. PictBridge was developed jointly by Canon, Fuji (nasdaq: FUJIYnews - people ), HP, Olympus, Seiko Epson, Sony (nyse: SNEnews - people ) and the Camera & Imaging Products Association. With PictBridge, users don’t need to buy a new printer with memory card slots or camera docks to print directly from a camera.

    Consumers’ retail developing options are also expanding. In September, 18.4 million people visited online photography sites (see: “Forbes Best Of The Web: Photo Albums) that can be used for sharing and printing, according to Nielsen//Net Ratings. Yahoo! (nyse: YHOOnews - people ) Photos had 4.7 million unique visitors, followed by the Time Warner (nyse: TWXnews - people ) AOL unit, You’ve Got Pictures, with 2.7 million. Ofoto and Snapfish each had 1.67 million users and Kodak’s online site drew 1.5 million.

    More and more photofinishing self-service kiosks and minilabs that develop digital prints are popping up in drugstores and film developing shops. By inserting a CD or memory card with stored images, users can make their own prints at a kiosk in a few minutes. Kodak has 44,000 Picture Maker kiosks in CVS (nyse: CVSnews - people ) drugstores, Wal-Mart (nyse: WMTnews - people ) stores and other retailers worldwide with 6,000 more coming by the end of 2003.

    Whether this flood of retail options and new technology will boost consumer demand for digital prints remains to be seen.