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Market Overview According to a new forecast report 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. 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. Prints Ordered from Online Photo Services InfoTrends projects that the total number of prints ordered from online photo services by members and visitors (including free prints) will rise from just over 1.1 billion in 2006 to more than 1.2 billion in 2011. This slow growth and eventual decline will come as consumers increasingly rely on digital displays for viewing and mainstream digital camera users print less than early adopters. Members accounted for 98.4% of total prints ordered in 2006, with visitors accounting for the other 1.6%. This ratio is expected to remain fairly steady over the forecast period, with members representing about 99% by 2011. Figure 2: Online Prints by Members’ Capture Devices InfoTrends projects that the number of online prints ordered by members who upload camera phone photos will increase from just 16.2 million in 2006 to nearly 142 million in 2011, demonstrating an impressive CAGR of 54.4%. This growth can be attributed to a number of factors including improved camera phone imaging capabilities and a maturing digital camera market. 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. 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 reports or to make a purchase, visit our online store or contact Nicole Shown at +1 ext. 207 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 . |
