Despite being a self-described technophobe, Peggy Larez used a computer to design a hardback book of photos of her 14-year-old son, who is hospitalized while awaiting a heart transplant.
"The books are really, really nice. They're beautiful," said Larez, who plans to give one to her mother. "It's the best present, and everybody likes books. And, oh my gosh, it was so fun."
For The Record
Los Angeles Times Wednesday December 28, 2005 Home Edition Main News Part A Page 2 National Desk 0 inches; 24 words Type of Material: Correction
Online photo services -- An article in Friday's Business section said Fuji Corp. had acquired online photo service Shutterfly.com. Shutterfly is an independent company.
To create her book, Larez used Seiko Epson Corp.'s StoryTeller kit -- one of a number of products to help shutterbugs buried in digital photos. With sales of digital cameras surpassing those using traditional film, printer makers Epson and Hewlett-Packard Co. are fighting film makers such as Kodak Corp. and Fuji Corp. for business in a rapidly growing niche.
"People swimming in digital photos creates a whole new category need for photo management," said Jill Aldort of InfoTrends CAP Ventures, a market research firm specializing in digital imaging.
The U.S. market for online photo finishing and photo merchandise more than quadrupled between 2002 and 2005 to $307 million, according to preliminary figures from InfoTrends. That's still less than half the estimated $885 million taken in this year by photo retailers such as Wal-Mart Stores Inc., Target Corp. and legions of drugstores and camera shops. And it's a fraction of the estimated $2 billion that Americans will spend this year on ink and paper to print photos at home.
But it's growing fast, while paper and ink sales are expected to peak this year then start to decline. Helping the trend toward do-it-yourself photo projects is home computers with faster processors, bigger hard drives and more memory.
Full-service online providers such as EasyShare.com, Snapfish.com and Shutterfly.com allow users to post photo albums and order reprints and calendars, coffee mugs and other photo-emblazoned gifts. Epson's product allows users to lay out, print and assemble photo books at home, for those who want more control over their creation.
And sophisticated photo-editing software originally intended for professionals, such as Photoshop Creative Suite from Adobe Systems Inc., is available in versions for consumers who want to organize and touch up pictures. Adobe's Photoshop Elements, Microsoft Corp.'s Digital Imaging Suite, Apple Computer Inc.'s iPhoto and Google Inc.'s Picasa all vie to be the center of the photographic universe. With each, users can order photos online or produce slideshows to view on computers or burn to DVDs.
"Everyone wants to be in photos -- hardware, software, camera makers, phone makers," said Snapfish.com Chief Executive Ben Nelson.
Like rivals Shutterfly.com and Ofoto.com, Snapfish was a start-up service offering photo sharing and printing. Snapfish was ranked 127th in the online film-developing market when it launched in April 2000; by the time HP bought it in April of this year, Snapfish had grown to No. 1 in volume of 4-by-6-inch prints, said Nelson, who is now also an HP vice president.
Seeing a way to keep revenue from customers who were defecting away from traditional film cameras, Kodak acquired Ofoto, renaming the service Kodak EasyShare Gallery. Similarly, Fuji snapped up Shutterfly.
Harnessing the Internet is one approach.
EasyShare.com is the biggest online presence in terms of revenue, followed by Shutterfly and Snapfish, according to InfoTrends. The services don't disclose separate financial details.
Snapfish has positioned itself as the price leader for 4-by-6-inch prints at 12 cents per photo ordered, or 10 cents prepaid in lots of 1,000. EasyShare and Yahoo Inc. charge 15 cents, and Apple and Shutterfly 19 cents, with Shutterfly offering as low as 15 cents prepaid. Adobe's Photoshop Elements offers prints through EasyShare, and Google's Picasa provides hard copies of photos through a number of services including Snapfish and Shutterfly.
With Snapfish, users can order photos and pick up hard copies an hour later at more than 4,000 Walgreens stores. Snapfish also has a partnership with Costco Wholesale Corp.
The service lets users download high-resolution photos from friends' albums and print them at home for free, and can send photos to cellphones at no cost.
Neither represents a revenue stream for Snapfish or HP, the world's largest maker of computer printers. "But we're getting people used to communicating with images," said Snapfish's Nelson. "The more images are shared, the more money HP will make in the long run," he said, because if people are printing photos, there's a good chance they're doing it on an HP printer using HP ink.
With Yahoo, Google and others getting into photo sharing and print ordering, Snapfish and others are branching out to personalized photo-based gifts.
"The online photo-sharing sites are in the middle of a significant transformation," said Ross Rubin, a consumer technology analyst with NPD Group. "Now major multinational companies have huge imaging ecosystems to leverage in order to drive usage of these digital images."