The Open Photo Studio08 Nov 2010
Using the book by Jeff Jarvis called “What Would Google Do?” as our standard, we will look at different companies currently existing and go over what you could do if you are trying to compete with the big guys. This week we analyze how to better allow your photo studio or photography business to compete in your neighborhood.
What is the Current Market Analysis? With the advent of the inexpensive digital camera, photo studios like Olan Mills and Picture People can no longer see themselves as the go to place for people who want a professionally printed portrait. Any soccer mom or artist with the right level of talent and enough starting capital to buy about $1000 DSLR Camera can now compete in their market and produce more professional looking images in one session than Picture People or anyone else takes in a day. They believe they are still in the picture printing business charging their customers and clients almost $20 per picture printed while throwing away thousands of dollars worth of unpurchased prints begging the question from the customer, are they’re prices ripping me off? Picture People’s popularity over competitor Olan Mills was mostly due to their professional upgraded look to their studios and modern picture taking methods and backgrounds which invited more modern consumers into the market. Their target consumer, young mothers with kids enjoy the atmosphere and believe that their employees are well trained in the art of good picture taking.
What is the Current Market Problem? My focus on Picture People has more to do with personal experiences but it gives a general mentality of the industry as a whole, Picture People actually has the audacity to say their pictures are Copyrighten in a vain attempt to prevent loyal customers from sharing and or replicating the images that are just too expensive to purchase in bulk. Printing unecessary photos for the sake of pushing the customer to make a rash decision to purchase the picture on the spot has less to do with open business practices and more to do with customer emotion and catching that instant sale. Many mothers wanting to have a momento of their children growing up spend a fortune on pictures they sometimes can’t afford and in many cases choose not to come into the store again because they’ve made that mistake once before. They also print large canvas images which they tell the customer is expensive to produce ($200) per large frame but then becomes a throw away if the customer decides not to purchase them. Though that is a profitable way to do business, it is not sustainable, eventually your customer base starts realizing that what you are charging them is not reasonable or fair and may choose to either pirate the images in which case you get exposure or money for your work or they choose to go into business themselves and or become your competition. When I asked an employee to not print the images and that we would be choosing the ones we want online, they acutually said they would be fired if they did not waste product, I feel for the companies investors and overall bottom line in the long term. To add insult to injury, they charge around $3 for image manipulation like making the picture black and white or sepia, something that literally costs nothing for them and is as easy as the touch of a button.
What is the Current Market Solutions? Companies like Picture People believe they have innovated their industry by getting rid of sit down fees and allowing customers to only purchase the prints they want but with the amount of waste they produce with all of their unpurchased prints, they didn’t seem to go far enough in reducing their overall costs thus ensuring the lowest possible cost to the customer. Walmart and others have stepped in and offered the cheapest possible cost for reprints and allowing anyone who wants to compete with the giant Photo Studios to not having to own the actual printing equipment themselves. Walmart will even ship it to their customers for barely nothing.
What is the Industry Core Business? At it’s core the photo business must now see itself less as a provider of the physical photos or portraits it use to print and more as a service for great looking images that can then be distributed both to the benefit of the company and the individual in the picture. Picture People and others have the potential to service a large customer base willing to buy images if they only reduced their prices and or offered ways for them to share their images that wouldn’t be hampered by useless and unenforcable copyright restrictions. The more that companies think distrubuted by letting other less expensive offers do the bulk of the printing and sharing business, the more the company can focus on it’s main business product, and that is taking fantastic pictures easily.
What is the Industry Myths? The biggest myth in the photo studio industry is that customers aren’t willing to first pay for a sitting fee (which you don’t really have to offer) and thus the industry feels it must charge an absorberant amount per image to cover costs and second is that they need to print and show the customers the pictures in the store in an attempt to convince them or trick them into buying the already printed image otherwise they will never make a sale. Though that may work for a small fragment of the population, what companies that do this miss out on is the power of economies of scale and the ability for one well taken picture allowed to go public may create a powerful influx of customers that would otherwise never have purchased from them due to pricing.
What is the Industry Cannibalization? Any industry that is semi-digital runs the risk of piracy and inventive and smarter competitors, giving away the control of your images to your customers may be seen as tad amount to suicide in this industry but this necessary cannibalization allows the company to find new lines of revenue it had never thought of before nor reached out to.
What is the Industry Competition? Companies like Sears, JCPenny and Walmart are seeing the benefit of beefing up their photo studios and though they are currently not at the bar of companies like Picture People and Olan Mills, they are coming close and have the ability to charge less and draw their already family centered consumers to choose them over more expensive competitors. The only way to capture both the high end customers that go to Picture People and the Low end consumers that have their photos taken at Walmart is to combine the excellent capabilities of the high end studios with the pricing structure of the larger stores, so how does anyone make any money? The answer is distribution…
How to make it an Open Business? So how would I structure a photo studio to both make money and provide a more open and free atmosphere for their consumer? First I would focus on the core product which is the quality of the pictures taken and the training involved with those taking the pictures. Picture People does this well and would be the best to easily transition to this model but anyone with the right skills can learn to train and manage a large group of low wage workers into powerful photographers. The most important thing in this model is that you not charge your customers for the physical photos themselves but you charge them for access to the pictures on your website where the user can then choose what they want to do with the image, give the user control and they will use it to your benefit.
Whether you choose to charge a sitting fee or not is not really a problem, if you focus on your core business product and prove yourself in the market as the best in picture taking, I doubt people would have a serious problem in paying around $20 for a 30 minute photo session where they have access to all the pictures they want automatically online. The last time I visited Picture People they actually had a bit of a change of heart, they started offering low resolution CD’s for $25 and a high resolution version for $100. They are trying to follow the model but are falling short on execution. Their low resolution versions where suppose to allow people to post them to Facebook and other platforms while retaining their logo at the bottom of the image, yet the system they used to add the water mark was horrible and in many cases the CD came with way less images than we had actually taken. A half hour photo studio came out with only 10 pictures, I understand they want only the best pictures to show up so they have to scrutinize and remove those that aren’t perfect. But in many cases they removed entire segments of pictures which we had to ask them to put back on the CD and those pictures where the best ones. Don’t choose for the customer, let the customer choose for you…
Ultimately the trick to making a photo studio run more open and efficiently is to create a backend system that does most of the work. Charging your customers access to your pictures online instead of just in a CD allows them to post the images they want to Facebook and other sites right then and there for you. This also allows you to put a back link to your site and not just a watermark at the bottom or side of the image. This linked traffic is way more important than just for people to know that the image came from you and that is what I think Picture People doesn’t understand.
Now I’m going to mention something that is considered sacralige but if someone is going to take your pictures to Walmart for cheaper, why not help them do it? Look you can charge an arm and a leg for images but ultimately you know the actual cost of printing and maintaining this equipment and so instead of trying to charge what you think the market will bare, think more like Google and charge the minimum you can bare. This is an important point because what you want is to charge enough to get the most amount of users or customers with the lowest costs in your industry. When you are the best at what you do and you watch your cashflow then your business will make more money than it’s making now and the fact that your customers will choose you over anyone else because you’re willing to buck the trend is great business. Focusing on economies of scale works and as long as you don’t loose your edge doing your main business, let anyone or everyone else work with you in your platform.