*NEWS*EPSON PHOTOFINISHING NICHE DEVELOPS

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*NEWS*EPSON PHOTOFINISHING NICHE DEVELOPS

 user 2006-01-16 at 10:10:00 am Views: 69
  • #13822

    Photofinishing niche develops rapidly
    Despite
    being a self-described technophobe, Peggy Larez used a computer to
    design a hardback book of photos of her 14-year-old son, who is
    hospitalized while awaiting a heart transplant.
    “The books are
    really, really nice. They’re beautiful,” said Larez, who plans to give
    one to her mother. “It’s the best present, and everybody likes books.
    And, oh my gosh, it was so fun.”
    To create her book, Larez used
    Seiko Epson Corp.’s StoryTeller kit–one of a number of products to
    help shutterbugs buried in digital photos. With sales of digital
    cameras surpassing those using traditional film, printermakers Epson
    and Hewlett-Packard Co. are fighting filmmakers such as Kodak Corp. and
    Fuji Corp. for business in a rapidly growing niche.
    “People swimming
    in digital photos creates a whole new category need for photo
    management,” said Jill Aldort of InfoTrends CAP Ventures, a market
    research firm specializing in digital imaging.
    The U.S. market for
    online photofinishing and photo merchandise more than quadrupled
    between 2002 and 2005, to $307 million, according to preliminary
    figures from InfoTrends. That’s still less than half the estimated $885
    million taken in this year by photo retailers such as Wal-Mart Stores
    Inc., Target Corp. and legions of drugstores and camera shops. And it’s
    a fraction of the estimated $2 billion that Americans will spend this
    year on ink and paper to print photos at home.
    But it’s growing
    fast, while paper and ink sales are expected to peak this year then
    start to decline. Helping the trend toward do-it-yourself photo
    projects is home computers with faster processors, bigger hard drives
    and more memory.
    Help for home users
    Full-service online
    providers such as EasyShare.com, Snapfish.com and Shutterfly.com allow
    users to post photo albums and order reprints and calendars, coffee
    mugs and other photo-emblazoned gifts. Epson’s product allows users to
    lay out, print and assemble photo books at home, for those who want
    more control over their creation.
    And sophisticated photo-editing
    software originally intended for professionals, such as Photoshop
    Creative Suite from Adobe Systems Inc., is available in versions for
    consumers who want to organize and touch up pictures. Adobe’s Photoshop
    Elements, Microsoft Corp.’s Digital Imaging Suite, Apple Computer
    Inc.’s iPhoto and Google Inc.’s Picasa all vie to be the center of the
    photographic universe. With each, users can order photos online or
    produce slide shows to view on computers or burn to DVDs.
    “Everyone wants to be in photos–hardware, software, cameramakers, phonemakers,” said Snapfish.com Chief Executive Ben Nelson.
    Like
    rivals Shutterfly.com and Ofoto.com, Snapfish was a start-up service
    offering photo sharing and printing. Snapfish was ranked 127th in the
    online film-developing market when it launched in April 2000; by the
    time HP bought it in April 2005, Snapfish had grown to No. 1 in volume
    of 4-by-6-inch prints, said Nelson, who is now also an HP vice
    president.
    Seeing a way to keep revenue from customers who were
    defecting away from traditional film cameras, Kodak acquired Ofoto,
    renaming the service Kodak EasyShare Gallery.
    Harnessing the Internet is one approach.
    EasyShare.com
    is the biggest online presence in terms of revenue, followed by
    Shutterfly and Snapfish, according to InfoTrends. The services don’t
    disclose separate financial details.
    Snapfish has positioned itself
    as the price leader for 4-by-6-inch prints at 12 cents per photo
    ordered, or 10 cents prepaid in lots of 1,000. EasyShare and Yahoo Inc.
    charge 15 cents, and Apple and Shutterfly 19 cents, with Shutterfly
    offering as low as 15 cents prepaid. Adobe’s Photoshop Elements offers
    prints through EasyShare, and Google’s Picasa provides hard copies of
    photos through a number of services including Snapfish and Shutterfly.
    With
    Snapfish, users can order photos and pick up hard copies an hour later
    at more than 4,000 Walgreens stores. Snapfish also has a partnership
    with Costco Wholesale Corp.
    The service lets users download
    high-resolution photos from friends’ albums and print them at home for
    free, and can send photos to cell phones at no cost.
    Neither represents a revenue stream for Snapfish or HP, the world’s largest maker of computer printers.
    “But
    we’re getting people used to communicating with images,” said
    Snapfish’s Nelson. “The more images are shared, the more money HP will
    make in the long run,” he said, because if people are printing photos,
    there’s a good chance they’re doing it on an HP printer using HP ink.
    With
    Yahoo, Google and others getting into photo sharing and print ordering,
    Snapfish and others are branching out to personalized photo-based gifts.
    “The
    online photo-sharing sites are in the middle of a significant
    transformation,” said Ross Rubin, a consumer technology analyst with
    NPD Group. “Now major multinational companies have huge imaging
    ecosystems to leverage in order to drive usage of these digital images.”
    EasyShare,
    Shutterfly, Snapfish, PhotoWorks.com and Sony Corp.’s ImageStation.com
    are among those offering a variety of gifts such as photo memory books,
    calendars, cards, coffee mugs, T-shirts, blankets, neckties, dog food
    bowls and even cookies (for humans), all emblazoned with favorite
    photos.
    Revenue in the U.S. from such merchandise has ballooned from
    $15 million in 2002 to an estimated $79 million this year, and is
    expected to grow to $395 million by 2010, according to InfoTrends’
    preliminary figures.
    Boom in photo books
    Photo books in
    particular are gaining popularity. Most sites provide them through a
    partner such as MyPublisher.com, which runs its own consumer business,
    or Pixami.com, which doesn’t.
    Apple focuses on reprints and memory
    books made in the iPhoto organizing and editing program that comes with
    every Mac computer, eliminating the need to install additional software
    the other services require to order photos or gifts.
    “Let’s face it,
    the quality of a print on the side of a mug is not the same as
    high-quality photo vendors,” said Peter Lowe, Apple’s director of
    marketing for consumer applications. “Not everyone has graphic
    professionals like Apple does to call on to make your books look great.”
    Apple
    boasts special effects such as extensive layouts, backgrounds and
    fonts, and effects such as cutting up a photo into a mosaic that other
    services don’t.
    At $30 for a large hardcover 10-page book, Apple,
    Shutterfly and MyPublisher charge more than Snapfish, whose books start
    at $19.79.
    One Apple user created 800 iPhoto books for all 82 guests
    of a 60th birthday celebration where participants jetted off to Paris.
    Another made 20-page booklets as wedding invitations for $3.99
    each–extravagant to some, but unique and still cheaper than fancier
    engraved invitations.
    Epson’s StoryTeller is based on a different
    model, in which everything is done at a computer, without the Internet.
    A 10-page, 5-by-7-inch kit costs $19.99; an 8-by-10-inch book is $23.95
    for 10 pages and $29.99 for 20 pages.
    “The whole process took me
    about 30 minutes,” said Larez, who tried her StoryTeller out at an
    event Epson held at the Ronald McDonald House at Stanford in Palo Alto,
    Calif., which houses financially strapped patients.
    “It was exciting
    because I didn’t have any money and anything to give to my mom, and
    this was the perfect thing to give to her. Memories are the best.”