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As appearing in The Seybold Report - Mar. 22, 2006

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.

Photo Marketing Association 2006 International Convention & Trade Show

Connecting Wireless & Imaging Communities

The 82^nd PMA International Convention and Trade Show convened in the magic city of Orlando February 26 - March 1 with over 600 exhibitors, more than 20,000 attendees and over 200 sessions and educational programs. This largest photo imaging trade show in the world draws the image capture professionals (commercial photographers), wholesale and retail photo services firms and a growing contingent of the printing industry that specialize in this web savvy, digital graphics mainstream niche.

In addition to the collaborative opportunities that the printing industry has to work with virtually each membership segment of PMAI, the dynamics impacting photo imaging parallel that of the printing industry, such as: (1) supplier consolidation, (2) rapid technology advances and (3) emerging new buyer behavior models. Printers serving this image capture market must be sensitive to these dynamics or suffer the consequences.

Supplier Consolidations

The photo developing mini-labs and multi-site photo retailers invest the same psychological equity into long-term supplier relationships, as do many printers. When these fold, it's not as easy as walking across the street or comparing website prices in reestablishing another viable partner.

Six weeks ago Konica Minolta announced their departure from both the consumer camera and image printing business. Their lens mount and other single lense reflex (SLR) camera technologies will be taken over by SONY, who in turn will use Konica Minolta as a production source for its SONY-branded DSLRs. AGFA was the second big name no show at the trade show.

X-rite and their recently announced acquisition of GretagMacbeth should be well received in both image capture and image print markets as their color management innovations, such as their Eye-One Display 2 and Huey, will be fully compatible in making color stabile and repeatable. These two firms have some of the dominant products and technologies that make multi-process, color management a reality.

The scrapbooking niche has matured quickly with more than 1,400 suppliers, according to Jeanne Wines-Reed, one of the founders of the Professional Scrapbook Retailers Organization. While many specialty elements continue to be available, such as background papers, stickers, labels, diecut buttons and themed embellishments, to be physically placed on a page, digital printers or mini-labs with digital presses are now offering software libraries of digital click art to be integrated into their furnished page layout systems. This software can be downloaded by either the professional photographer or retail photoshop to be used by the retailer's client on an in-store, furnished PC.

This fully integrated software, some proprietary and much off the shelf, either has a multitude of templates to pour text, click art or digital photos into or more sophisticated custom layout features. When complete, the pages are sent to the printer's FTP site to be printed digitally on up to 12" by 12" pages. Wedding albums or full vacation books, for example, are then attractively bound and drop-shipped to the client in only a couple of days.

Rapid Technology Advances

Total camera sales - both units and revenues - were flat in 2005 after years of double-digit growth. The digital SLRs or DSLRs segment is expected to have a +23% unit growth in 2006. Revenue stagnation is attributed to cascading prices on all camera levels as recently introduced models have improved capabilities, e.g., stabilizing software, higher pixel power and wireless downloading. Most every manufacturer seems to offer a 4MP or 5MP product for under $300. Camera pixel resolutions are already so high as to assure maximum quality renditions on any conceivable media. And yet the manufacturers expect to continue to escalate this race to 20+MP and beyond for the professional and eclectic hobbyist.

The kiosk is king. Despite its early operational problems, the kiosk opened the door to the concept of letting the customer become his/her own photo finisher. Photo kiosks comprise 15% of the total kiosks in use, which is actually quite a lot when you realize that ATM machines are also kiosks. The Digital Imaging Marketing Association, which is one of the five allied imaging groups that hold their annual meeting in conjunction with the PMA Convention, hosted its 3^rd annual "DIMA Kiosk Shootout." There were 27 photo kiosks from sixteen manufacturers in this dedicated show arena. Nine winners were named in four different categories by two different panels of judges - self-service experts and consumers. Judges evaluated the kiosk systems using criteria such as customization, flexibility of options, reporting, and other benefits important to retailers.

The four categories chosen by the Judges and winners included: (1) Counter-Top Kiosk; PT 2600, Whitech USA, Inc., West New York, NJ, (2) Floor-Standing DSC Print Kiosk; PT 8600 also by Whitech USA, Inc., (3) Print-to-print/DSC Print Kiosk; APM 1100, Lucidiom, Inc., Vienna, VA and (4) Creative Kiosk; AMP 1100.

Kiosk systems were also judged by a panel of consumers evaluating features such as user friendliness, ergonomics, feature set, and quality of print and overall experience. The winners of the "People's Choice" award in each category were: (1) Counter-Top; Kodak Picture Kiosk G4 Order Station by Eastman Kodak Company, (2) Floor-Standing; Kodak G4 17" Digital Station, (3) Print-to-print; Kodak G4 36" Print Station and (4) Creative (Tie); AMP 1100 by Lucidiom, Inc. and QP 3000 by Signifi Solutions Inc.

College and university in-plant printers are beginning to endorse this incremental value-added service. They can have the equipment installed with no capital investment at all and still receive a royalty from the contracted installer based upon the number of prints the students and staff make. It is hard to imagine that any small commercial printer endorsing digital printing that has any degree of client visits would not consider installing a kiosk as a further value-added service.

Another area of the show floor was dedicated to the refurbishment of older generation kiosks. Considering the huge investment in units that are not that old but now incompatible with select memory media that is only months old, this upgrade issue is of significant concern as well as opportunity.

Mobile imaging visionary panels were debating the future roll of the camphone versus the digital camera. Camphones are arriving in the US with 3MP resolutions in 2006, 3X zoom and WIFI compatibility. The simplicity of wireless is proving increasingly popular as a speedier and more reliable means of image transmission than any of the broadband alternatives. To many this benefit is simply the immediacy of sharing pictures.

One of these panelists Tony Henning with Future Image, Inc. said that Japan is the most advanced in the world with five years of camphone saturation. They have many more applications, which are making the transition from a phone that takes pictures to a multi-media messaging device. For example, when dad comes home from the office he puts his wallet, keys and cell phone on the bureau. The vision is that there will be a single hand held device capable of all those functions in the near future. Henning emphasized that the CTIA is an international consortium that is striving to push standards to facilitate this vision. Nokia had a PMA booth for the first time displaying their photo quality prints off their current generation camphones.

An easily identified opportunity to many vendors is the quantity of vulnerable "memories" that are being stored in shoeboxes and vulnerable media such as conventional CDs. This analog print scanning or Film2Digital conversion is beginning to heat up as an opportunity. Mitch Goldstein, co-founder of 30 Minute Photo, discussed his firm's installation of one of the early Kodak photo scanners. "A shoebox of old photos can be scanned while you wait," gleamed Goldstein. At 300 dpi resolution for a 4" by 6", the entry level scanner costing $10,000 can scan 25 pictures a minute. The professional version costing $60,000 scans five times faster or 120 photos a minute! Goldstein's firm charges $49.95 per thousand scans.

Kodak's scanning technology also has the capability of recognizing the chronological era of roughly when a photo was taken. This in turn allows them, as part of their organizing and editing software, to group the scanned images in near chronological fashion. This could be a valuable aid to grandpa in trying to recall what the special occasion was for a particular picture.

The client can leave the images on 30 Minute Photos website to have a link forwarded to other family members or colleagues to access and order select prints, have index prints prepared of the library or request other archival media reproduction.

As a standard precaution 30 Minute Photo has each client sign a copyright indemnification form prior to performing the scanning service. In the scanning preparation task if an employee spots a copyrighted photo, for example by Olan Mills, they will not scan that photo.

The first Bible to be handwritten and custom illustrated in 500 years will be printed digitally rather than by lithography due to the perceived higher quality of the wide format digital output. Hahnemuhle FineArt, the German paper manufacturer since 1584, has been selected to provide the archival quality 100% cotton rag stock for both the print illustrations and the 24.5" by 15.875" 1,150 page multi volume product being commissioned by Saint John's Abbey and University in Collegeville, Minnesota.

Calligraphy on the 73 books following the New Revised Standard Version (NRSV) was begun in 1998 in Saint John's scriptorium in Monmouth, Wales by a team of scribes and illuminators, which are artists who paint manuscripts with calligraphy, color and often gold. It is expected to be complete in 2007. The Bible is being made from traditional materials such as vellum (calfskin), hundred year old sticks of ink, gold and silver leaf and platinum and is being calligraphied with quill pins fashioned from goose, turkey and swan feathers.

(PDF of an illumination being created)

The prints are of the dozens of renditions of the custom illuminations contained throughout the seven volumes. A number of these actual prints were on display at the PMA Convention by Hahnemuhle FineArt. The limited edition printing of the Bible, which is intended to be a fundraiser for the Abbey and University, is almost sold out at $150,000 per copy.

Hahnemuhle FineArt has developed downloadable ICC profiles for most of the Canon, Epson and Hewlett-Packard printers, which will optimize their reproduction on the variety of Hahnemuhle papers.

Emerging New Buyer Behavior Models

The Complete Picture Inspiration Center highlighted features of the retailing center of the future. Sponsored by several suppliers, this area hosted regular seminars on site and showcased lifestyle experiences designed specifically for the most powerful target market, "Jennifer-the Gen X Mom." Marketing research indicates that 56% of the buyers are female and yet many of the conventional photo retailing services are too technical and geeky to appeal to this growing market segment. Jennifer is an impatient shopper, not impressed by brands and certainly not brand loyal like her "Boomer" parents" are three lessons learned from marketing studies.

An underlying theme at PMA '06 suggested in no subtle fashion that the "female" is driving many imaging revenue streams as well as corporate successor plans. For example, two dynamic female keynoters shared their individual marketing expertise and perspectives in well received presentations.

Robyn Waters, consultant and principal with RWTrend, discussed the counter trends and paradoxes that are currently presenting the most appealing new product development and business opportunities. Despite the explosion of e-mails, "customized stationary is experiencing a revival," according to Waters. Mont Blanc is advertising "New Since 1924." Mass customization is a growing trend as the new owners are extensively customizing both the MiniCooper and Scion automobiles. During the 8-12 weeks required for the plant to customize these cars the manufacturer keeps the customer engaged by sending pictures of the progress concluding with a "birth announcement of my new baby" that can be sent to family and friends." "Do you have any old products that can be revitalized?" asked Waters under the theme of "Younique." Jones Soda is offering custom digital labels for clients who buy a case of their old line favorite Jones beverage.

"Social Capitalism" is another paradox theme that suggests, "The best way to make money is to also save something." In your promotional pieces emphasize integrity and don't shy away from "Profit + Purpose" in new product announcements. "Worthwhile magazine is a new title aimed at the heart and sole not just the mind," concluded Waters.

Amy Curtis-McIntyre achieved extraordinary results as Vice President of Marketing for JetBlue Airways. Advertising Age named her "Marketer of the Year while readers of Conde Nast Traveler magazine named JetBlue "Best Domestic Airline" less than three years after its debut.

"Give clients a remarkable experience, an experience worth remarking about," according to Curtis-McIntyre. "Look outside your industry for inspiration" was another marketing truism that drove the JetBlue innovations. She concluded by saying, "People may forget what you did. People may forget what you said. They will not forget how you made them feel."

It is difficult not to draw comparisons between industries. Here PMAI is teaching its industry to pay more attention to the female consumer and potential corporate contributor as evidenced by the two featured speakers. While the printing industry has witnessed select elections of its first female Presidents of the National Trade Associations, i.e., Joan Davidson of Sheridan Press as President of NAPL and two years ago DMIA had a woman President, very little seems to be happening in fast tracking female executives into ownership and officer ranks. If this were not true, then Printing Impressions annual listing of the top female bosses would not be such a big deal. Print Buyers OnLine has done as much documentation for the industry as is available to prove that females are playing exceedingly important roles as decision makers in placing print buying contracts. Could this be another marketing opportunity for the most enlightened printing firms?

It is frustrating to photo retailers that the number of digital images continue to far outstrip the proportion of prints being made from these stored images. Additionally the growth of higher resolution and expanded memory camphones would suggest that this universe of digital images would truly explode. This would suggest an attractive photo print opportunity except for the fact that the actual volume of photo prints being made has not been growing now for several years.

In attempting to address this prints stagnation anomaly, Hewlett- Packard retained Jeff Manning (gotmanning.com), the former advertising executive and guru of the highly successful Got Milk? Campaign of a decade ago, and author of a book by the same title, to consider this industry wide marketing challenge. Manning did some homework on the industry and print buyer behavior. Utilizing the principles learned through the Got Milk? effort, he made a presentation on "category marketing" and how such a campaign might be considered to boost the lagging photo print volume.

Manning's hypotheses were that (1) the issues were not related to any particular brands, (2) were intrinsic to the "category" or industry wide, (3) would worsen as camera sales slow and (4) the behavioral tendency is not to print. He suggested that a category marketing initiative would have the communications objective of "elevating photos above that of images." It would give consumers "imperatives to print." For example, how many birthdays are there each day? A possible slogan could be as simple as "It's not a photo, until you print it!"

He proposed that the photo marketing industry (1) convene a task force that is fully representative of the industry, (2) cost out exploratory phases, (3) fill gaps in knowledge and (4) develop/test/quantify position options. He warned that the milk industry waited ten years too long before initiating Got Milk? To see how Manning helped other "commodity" industries like beef, pork, bananas and prunes reignite their mature category marketing check out, gotmanning.com.

With the substitution of a few statistics, Manning's entire presentation could have been directed to the printing industry and The Print Council. It is not known whether or not this industry leadership group has read Manning's got milk?:the book. To know that the Print Council is trying to emulate the results of the milk industry with their successful campaign might well add excitement to their otherwise admirable efforts.

EBay had a booth manned by both eBay employees and independent trade agents who make their fulltime living by buying/trading/listing goods on eBay. Every hour on the hour "Basic and Advanced How To" seminars rotated as free sit-downs for passersby. EBay.com/education and 1-866 EBAY (3229) from 9-9 EST (6-6 PST) are on-going sources of complementary business consulting with an eBay selling expert.

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.