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#1
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Price War Hits Digital Photos
"The evidence seems to be that the future for printing is smaller than
anyone had imagined." March 17, 2005 A Price War Hits Digital Photos Wal-Mart, Costco Cut Cost Of Printing Snapshots, as H-P Reduces Rates on Paper, Ink By WILLIAM M. BULKELEY Staff Reporter of THE WALL STREET JOURNAL A price war has broken out in digital photo printing. Wal-Mart Stores Inc., Costco Inc. and other retailers are sharply cutting prices on digital-photo prints in a furious effort to win consumers who are switching to digital cameras from traditional film. The companies that make home printers are also stepping up their bid to grab more of this business. Hewlett-Packard Co., which has sold many consumers on the convenience of making digital images at home, says it will effectively cut the per-print costs by 17% for people who own H-P printers and buy its paper and ink. The price cuts come at a critical time for retailers and printer makers. With the shift from film to digital picking up steam, the next two years are seen by many experts as crucial in forming consumer habits. As the heavyweights slug it out, digital-camera owners are the big winners. They are in many cases finding that it is cheaper to print digitally captured images than those taken with film. Two weeks ago, Wal-Mart cut prices on standard 4-by-6-inch prints made from stored digital images to 19 cents from 24 cents. Wal-Mart, the nation's largest photo finisher, charges 29 cents apiece for prints from film. For customers who don't mind transferring the images from their computers to Wal-Mart.com's Web site, the per-print price has dropped to 17 cents. (The prints are ready for pickup at the store in two days.) Wal-Mart's wholesale-club affiliate, Sam's Club, charges even less for a similar service: 15 cents, down from 16 cents before the recent round of cuts. To undercut Wal-Mart, wholesale-club leader Costco is planning to lower its rates this week on one-hour processing to 17 cents from 19 cents. Meanwhile, drugstore giant Walgreen's Inc. is running a digital-print special at 20 cents a piece for 50 prints in some markets, compared with the 29 cents it normally charges for digital or film prints. Walgreen's store signs proclaim that its prints are "half the cost of printing at home" says a spokesman. The calculation is based on the prices of home-PC printer supplies like ink and paper. The other players in this battle are the online photo sites such as Shutterfly.com and Ofoto, which is owned by Eastman Kodak Co. These sites accounted for a combined 8% of all prints made last year. Photo finishers are hoping that the lower prices will induce consumers to print more of their digital pictures. Consumers spent an estimated $8.2 billion for prints last year, including both those made at retail outlets and at home, according to Photo Marketing Association International, a trade group. But that is a fraction of the potential market: Only about 20% to 30% of digital pictures taken are developed. The price cuts also come as digital cameras are rapidly stealing market share from film cameras. Of the cameras sold this year, about 80% are expected to be digital. But despite the growth in digital photography, the number of overall prints made at home and at stores fell 4.5% in the U.S. last year to 27.4 billion, according to PMAI. With the film business drying up, retailers can ill afford to lose printing revenues, too. After a slow start, retailers are beginning to gain traction with digital printing. Digital prints ordered at retailers more than tripled last year, says PMAI, while the number of prints made at home were up 37%. And the momentum is clearly with the retailers: Last year, while about 61% of all digital prints were made at home, that is down from 90% in 2000. One reason is the sharp increase in retail outlets offering digital printing. Most drug and discount stores can now handle digital prints in their one-hour photo-processing minilabs. Labs can produce prints at a cost to operators of less than five cents a piece, says Greg Joe, marketing manager for Japan's Noritsu Ltd., a big minilab maker. Retailers with less business can install cheaper, but also slower, digital kiosks. The number of photo kiosks in the U.S. is expected to grow to 121,000 by 2008, up from 75,000 today, says Kerry Flatley, a consultant with market researcher Infotrends. Last year, 17% of digital-camera owners used a kiosk vs. just 6% the year before, she says. Both retailers and home-printer makers insist that the future of digital printing is leaning in their favor. Pierre Schaeffer, Kodak's consumer imaging marketing manager, says some consumers may accept the higher cost of home printing to, for instance, easily print pictures at a party for guests to take. But if they have a camera full of hundreds of pictures from vacation, they would prefer to take them to a low-cost retailer, he argues. Long term, home printing is likely to decline to just 15% of all prints, says Gael Lundeen, general manager photofinishing and Web services for Fuji Photo Film USA Inc., the leader in the minilab business with customers including Wal-Mart. "The third wave of digital photographers is coming in, and they find digital printing at home is very expensive and very inconvenient," says Ms. Lundeen. Not surprisingly, makers of printers disagree. Next month, H-P will effectively cut home-printing costs -- not including the customer's initial outlay for the printer itself -- to 24 cents a print, for customers who buy a 200-sheet value-pack, down from 29 cents, says John Solomon, H-P's vice president of imaging. He believes that as long as home printing is only 25% more expensive than the retail option, consumers will generally prefer its convenience. The online photo companies, meanwhile, are betting that consumers will print out many of their images in albums and calendars or on coffee-cups or refrigerator magnets. That is a prime source of revenue. All photo finishers are trying to make it easier to order multiple prints and upgrade to 5-by-7-inch prints, because that is where the profit margins are higher. For the consumer, for example, a 5-by-7 print can cost five times what a 4-by-6 does, even though it is only 45% larger in surface area. Of course, there's another possible answer to this debate over where people will print their digital pictures in the future. Frank Baillergeon, an industry consultant from Eagle, Idaho, contends that photo finishers are engaging in "a lot of wishful thinking." Most consumers, he says, appear to perfectly content to keep most of their images in their PCs. "The evidence seems to be that the future for printing is smaller than anyone had imagined," he says. A SNAPSHOT A look at the dropping prices for printing pictures. The following are for 4-by-6-inch color photos. Print price Printer price Mailing Price Total Retail Wal-Mart (1 hr.) 19 cents NA NA 19 cents SamsClub.com 15 cents NA NA 15 cents Costco (1 hr.) 17 cents NA NA 17 cents Walgreen's (1 hr.) 29 cents NA NA 29 cents CVS (1 hr.) 29 cents NA NA 29 cents Home Printing Hewlett-Packard 24 cents (1) $150 NA 36 cents Kodak 62 cents (2) $150 NA 74 cents Online (3) Kodak Ofoto 25 cents NA 5 to 16 cents 30 cents Shutterfly.com 22 cents (4) NA 5 to 18 cents 27 cents 1 Based on buying 200-print pack with ink for $48. Print price assumes $150 printer making 300 prints a year for four years. 2 Based on 40 print-pack for $24.99 at CompUSA. Print price assumes $150 printer making 300 prints a year for four years. 3 Online pictures take five days to arrive in the mail. 4 Based on prepaid 100-print plan plus $4.99 shipping for 100 photos. Source: WSJ Research |
#2
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Very interesting stuff.
I don't know that people will print more digital photos (they say less than 30% get printed) with lower prices. I know for myself and my wife we only print a fraction of our pics because we are taking 3X what we took on film, and then tossing all the bad ones. It always sucked waiting a couple weeks to get film developed and then finding out that half the roll was crap! "MrPepper11" wrote in message oups.com... "The evidence seems to be that the future for printing is smaller than anyone had imagined." March 17, 2005 A Price War Hits Digital Photos Wal-Mart, Costco Cut Cost Of Printing Snapshots, as H-P Reduces Rates on Paper, Ink By WILLIAM M. BULKELEY Staff Reporter of THE WALL STREET JOURNAL A price war has broken out in digital photo printing. Wal-Mart Stores Inc., Costco Inc. and other retailers are sharply cutting prices on digital-photo prints in a furious effort to win consumers who are switching to digital cameras from traditional film. The companies that make home printers are also stepping up their bid to grab more of this business. Hewlett-Packard Co., which has sold many consumers on the convenience of making digital images at home, says it will effectively cut the per-print costs by 17% for people who own H-P printers and buy its paper and ink. The price cuts come at a critical time for retailers and printer makers. With the shift from film to digital picking up steam, the next two years are seen by many experts as crucial in forming consumer habits. As the heavyweights slug it out, digital-camera owners are the big winners. They are in many cases finding that it is cheaper to print digitally captured images than those taken with film. Two weeks ago, Wal-Mart cut prices on standard 4-by-6-inch prints made from stored digital images to 19 cents from 24 cents. Wal-Mart, the nation's largest photo finisher, charges 29 cents apiece for prints from film. For customers who don't mind transferring the images from their computers to Wal-Mart.com's Web site, the per-print price has dropped to 17 cents. (The prints are ready for pickup at the store in two days.) Wal-Mart's wholesale-club affiliate, Sam's Club, charges even less for a similar service: 15 cents, down from 16 cents before the recent round of cuts. To undercut Wal-Mart, wholesale-club leader Costco is planning to lower its rates this week on one-hour processing to 17 cents from 19 cents. Meanwhile, drugstore giant Walgreen's Inc. is running a digital-print special at 20 cents a piece for 50 prints in some markets, compared with the 29 cents it normally charges for digital or film prints. Walgreen's store signs proclaim that its prints are "half the cost of printing at home" says a spokesman. The calculation is based on the prices of home-PC printer supplies like ink and paper. The other players in this battle are the online photo sites such as Shutterfly.com and Ofoto, which is owned by Eastman Kodak Co. These sites accounted for a combined 8% of all prints made last year. Photo finishers are hoping that the lower prices will induce consumers to print more of their digital pictures. Consumers spent an estimated $8.2 billion for prints last year, including both those made at retail outlets and at home, according to Photo Marketing Association International, a trade group. But that is a fraction of the potential market: Only about 20% to 30% of digital pictures taken are developed. The price cuts also come as digital cameras are rapidly stealing market share from film cameras. Of the cameras sold this year, about 80% are expected to be digital. But despite the growth in digital photography, the number of overall prints made at home and at stores fell 4.5% in the U.S. last year to 27.4 billion, according to PMAI. With the film business drying up, retailers can ill afford to lose printing revenues, too. After a slow start, retailers are beginning to gain traction with digital printing. Digital prints ordered at retailers more than tripled last year, says PMAI, while the number of prints made at home were up 37%. And the momentum is clearly with the retailers: Last year, while about 61% of all digital prints were made at home, that is down from 90% in 2000. One reason is the sharp increase in retail outlets offering digital printing. Most drug and discount stores can now handle digital prints in their one-hour photo-processing minilabs. Labs can produce prints at a cost to operators of less than five cents a piece, says Greg Joe, marketing manager for Japan's Noritsu Ltd., a big minilab maker. Retailers with less business can install cheaper, but also slower, digital kiosks. The number of photo kiosks in the U.S. is expected to grow to 121,000 by 2008, up from 75,000 today, says Kerry Flatley, a consultant with market researcher Infotrends. Last year, 17% of digital-camera owners used a kiosk vs. just 6% the year before, she says. Both retailers and home-printer makers insist that the future of digital printing is leaning in their favor. Pierre Schaeffer, Kodak's consumer imaging marketing manager, says some consumers may accept the higher cost of home printing to, for instance, easily print pictures at a party for guests to take. But if they have a camera full of hundreds of pictures from vacation, they would prefer to take them to a low-cost retailer, he argues. Long term, home printing is likely to decline to just 15% of all prints, says Gael Lundeen, general manager photofinishing and Web services for Fuji Photo Film USA Inc., the leader in the minilab business with customers including Wal-Mart. "The third wave of digital photographers is coming in, and they find digital printing at home is very expensive and very inconvenient," says Ms. Lundeen. Not surprisingly, makers of printers disagree. Next month, H-P will effectively cut home-printing costs -- not including the customer's initial outlay for the printer itself -- to 24 cents a print, for customers who buy a 200-sheet value-pack, down from 29 cents, says John Solomon, H-P's vice president of imaging. He believes that as long as home printing is only 25% more expensive than the retail option, consumers will generally prefer its convenience. The online photo companies, meanwhile, are betting that consumers will print out many of their images in albums and calendars or on coffee-cups or refrigerator magnets. That is a prime source of revenue. All photo finishers are trying to make it easier to order multiple prints and upgrade to 5-by-7-inch prints, because that is where the profit margins are higher. For the consumer, for example, a 5-by-7 print can cost five times what a 4-by-6 does, even though it is only 45% larger in surface area. Of course, there's another possible answer to this debate over where people will print their digital pictures in the future. Frank Baillergeon, an industry consultant from Eagle, Idaho, contends that photo finishers are engaging in "a lot of wishful thinking." Most consumers, he says, appear to perfectly content to keep most of their images in their PCs. "The evidence seems to be that the future for printing is smaller than anyone had imagined," he says. A SNAPSHOT A look at the dropping prices for printing pictures. The following are for 4-by-6-inch color photos. Print price Printer price Mailing Price Total Retail Wal-Mart (1 hr.) 19 cents NA NA 19 cents SamsClub.com 15 cents NA NA 15 cents Costco (1 hr.) 17 cents NA NA 17 cents Walgreen's (1 hr.) 29 cents NA NA 29 cents CVS (1 hr.) 29 cents NA NA 29 cents Home Printing Hewlett-Packard 24 cents (1) $150 NA 36 cents Kodak 62 cents (2) $150 NA 74 cents Online (3) Kodak Ofoto 25 cents NA 5 to 16 cents 30 cents Shutterfly.com 22 cents (4) NA 5 to 18 cents 27 cents 1 Based on buying 200-print pack with ink for $48. Print price assumes $150 printer making 300 prints a year for four years. 2 Based on 40 print-pack for $24.99 at CompUSA. Print price assumes $150 printer making 300 prints a year for four years. 3 Online pictures take five days to arrive in the mail. 4 Based on prepaid 100-print plan plus $4.99 shipping for 100 photos. Source: WSJ Research |
#3
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Dr. Joel M. Hoffman wrote: If it was my machine, I would charge more too, because they need to change the roll of paper. I wish I had some place near me that had a machine with 12" paper -- the largest I know of maxes out at 8x10. I'm amazed how easy it is to get 8x10 and how hard it is to get 8x12. I find 8x10 a fairly useless size because of the cropping. -Joel You might try Costco, it seems that their print sizes are all 3:2 aspect ratio or very close to it. I get 12 x 18 prints there and whereas I am not sure I think they may have a 8 x 12 size. Scot |
#4
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You're in Houston, right?
Try a "real" Camera Sto 1. Houston Camera Exchange on Richmond 2. Camera Center on West Gray Both have excellent service in 8" x 12" printing. On 3/18/05 9:29 AM, in article , "Dr. Joel M. Hoffman" wrote: If it was my machine, I would charge more too, because they need to change the roll of paper. I wish I had some place near me that had a machine with 12" paper -- the largest I know of maxes out at 8x10. I'm amazed how easy it is to get 8x10 and how hard it is to get 8x12. I find 8x10 a fairly useless size because of the cropping. -Joel ---------------------------------------------------------------------------- Free 35mm lens/digicam reviews: http://www.exc.com/photography ---------------------------------------------------------------------------- __________________________________________________ _____________________________ Posted Via Uncensored-News.Com - Accounts Starting At $6.95 - http://www.uncensored-news.com The Worlds Uncensored News Source |
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