Commentary & Analysis
Growing Market for Digital Photo Applications Provides New Business Opportunities for Digital Print Providers
By Mike Howard August 21,
By WhatTheyThink Staff
Published: August 21, 2006
By Mike Howard August 21, 2006 -- The tremendous growth in digital photography presents exciting new revenue opportunities for digital print providers. With more than half of all U.S. households owning a digital camera, consumers continuously seek new ways to use and display their digital images beyond standard 4x6 photo prints. Popular applications include photo books, calendars and greeting cards. According to the Photo Marketing Association (PMA), the value of the custom service market approaches $1 billion and projections call for it to more than double in the next two years. Growth in custom photo applications make this an ideal time for owners of digital production color presses to expand their businesses with photo services. Photo books, one of the hottest products in the digital photo printing market, generated more than $200 million of sales in 2005, according to PMA. The recent 2006 PMA Camera/Camcorder Digital Imaging Survey shows that 34 percent of households that made custom products created photo books. Personalized photo calendars were the second most popular items at 28 percent of households. Continued growth in custom photo applications among consumers and professional photographers makes this an ideal time for owners of digital production color presses to expand their businesses with photo services. The Power of Digital Printing Combining photo applications with digital printing’s strengths in areas such as variable data printing, perfected output and sharp text and graphics creates a more valuable, personalized product. Advances in electrophotographic printing technology, such as the abilities to reproduce a wider color gamut and to print on a wide range of substrates and surfaces, make digital presses well suited to meet the quality and design expectations associated with photo output. Beyond image quality and personalization capabilities, digital presses offer a number of other unique advantages for the photo services market. The speed of these devices enables print service providers to deliver on the quick turnaround times that customers want when ordering custom photo applications. In addition, a variety of finishing options and materials allows for a wide range of product configurations and gives photo books and other applications a published look and feel. Establishing a Photo ServicesBusiness A steadily increasing number of print providers offer photo applications as a value added service to customers and a point of differentiation among competitors. In fact, because offering photo services sets their companies apart from others in their markets, many printers aren’t yet widely publicizing these services beyond their regular customer base. A steadily increasing number of print providers offer photo applications as a value added service to customers and a point of differentiation among competitors. Print providers interested in providing photo application services can choose from two basic business models for offering photo services: selling directly to consumers through a website or partnering with outside organizations, such as photo labs, retailers or online photo services, to provide printing and fulfillment. An important consideration when deciding between these two approaches involves the resources and investment required to market to consumers and to purchase photo application authoring software and network infrastructure. For digital print providers, establishing a direct-to-consumer photo service requires a significant upfront investment. There are a number of companies that provide digital web-to-print solutions that graphic communications providers can license. These programs allow consumers to create photobooks, cards, gift items and other products. The system then sends the jobs to digital presses and handles back office order administration. Alternatively, some printers have developed their own solutions. Most printers sell to other businesses, so those that choose a direct-to-consumer format should consider setting up a separate business unit for photo applications. Rocky Mountain Printing took that approach when it decided to get into the $7.5 billion greeting card business by opening a subsidiary, Card Café. By visiting www.cardcafe.com, consumers and businesses can select from hundreds of greeting card designs for holidays, birthdays, and special events and locations. They can add personal messages and signatures to the cards, which Card Café then digitally prints, inserts into a personalized envelope that carries the customer’s return address, and mails using an actual first class postage stamp. Customers can also choose to have their own photos or artwork used for the cover of the card, which then receives a protective high quality gloss coating. The www.cardcafe.com website gets about 1,100 visitors per day. Providing Photo Services to Professional Markets Woolverton Printing Company took a different approach to entering the custom photo services market by partnering with a professional photo lab, American Color Imaging (ACI). The companies in Cedar Falls, Iowa jointly purchased a digital production color press, creating new revenue opportunities for each. Professional photography customers from ACI appreciate the output performance of the digital press, especially the ability to add high impact glossing to photo products. As a result, ACI sends more photo application jobs to Woolverton Printing Company which, in turn, produces materials that consistently meet demanding quality standards. A growing number of photo labs are investing in their own digital presses to handle the growing demand for printed photo applications. A growing number of photo labs are investing in their own digital presses to handle the growing demand for printed photo applications. Miller’s Professional Imaging has developed a professional product line that includes calendars, sports cards, playing card decks and photo books. The applications are assembled by their photographer customers using web-based tools and delivered into the lab’s traditional high-touch workflow. The high value applications are then printed using electrophotographic printing technology. As print providers and other graphic communications providers look to continually expand their services with digital printing, photo services offer outstanding potential as a new profit center.