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Growth Drivers According to a new forecast from InfoTrends, online photo service membership continues to experience steady growth, resulting in increased revenue for Web-based print providers. InfoTrends reports that online photo service providers generated just under $450 million in revenues from prints and photo merchandise in 2006, and that figure is expected to grow to more than $1 billion by 2011. Figure 1: U.S. Online Photofinishing Revenues
This growth is the result of significant increases in the overall volume of prints and photo merchandise, a consumer shift toward retail and online printing, and a stabilization of print prices after several years of decline. Photo merchandise accounted for an estimated 40% of total online photofinishing revenues in 2006, and is expected to grow to approximately 70% by 2011 due to a combination of falling print prices and increased marketing muscle behind photo gifts and merchandise. InfoTrends also projects that the total number of uploading members will rise at a CAGR (compound annual growth rate) of approximately 13% from 2006 to 2011. Market Challenges A number of challenges remain for businesses in this arena. The success of new online story-telling offerings continues to impact consumers’ use of photo sites by leading them away from printing, as Web-based photo viewing becomes the norm for an increasing percentage of the population. In addition, many late adopters of digital camera technology are not expected to share and print as many pictures online as early adopters did. The rapid growth of net-to-retail photo printing is also likely to attract consumers who may otherwise have printed through online pureplays. Figure 2: Which of the following do you consider the
As retail activity increases, online photo services may become more of a conduit to retail fulfillment. Financially, these businesses may be faced with revenue sharing deals instead of enjoying manufacturer’s margins on everything they sell. On the other hand, there are still many new customers to be gained, and retail partnerships such as those recently announced between Shutterfly and Target, Kodak Gallery and Best Buy, and Kodak Gallery and Target, can expose many more consumers to available products and services, and should result in overall growth. InfoTrends expects that online photo service providers will continue expanding in areas such as image management, online storage, custom photo merchandise, and mobile imaging. The preceding is an excerpt from InfoTrends’ reports entitled “Online Photo Services Market Forecast: 2006-2011.” To learn more about the report or to make a purchase, visit our online store or contact Matt O’Keefe at +1 ext. 115 or . Copyright © 2007 InfoTrends. All rights reserved. Reproduction or reuse of InfoTrends materials is strictly prohibited without prior written consent. If you are interested in referencing InfoTrends’ content, please submit your request to . |
