This is marketing research on the Commercial Photography industry and can include information on the background, market structure, definitions, competitors, trends and developments of commercial photography and is related to other topics such as photofinishing, cameras, film, video and photographic services.

Table of Contents

Table of Contents

1 Background 
2 Market Structure 
3 Market Metrics 
4 Recent Trends and Developments 
5 Sources 
6 Next Steps

Background

Restructuring, consolidation, and the formation of company alliances continue in the photo-finishing or services segment of the industry. The introduction of new equipment such as digital mini-labs is also changing the face of the industry. Digital lab equipment is capable of performing multiple operations to provide a spectrum of digital and traditional services. Sales of mini-labs in 1997 (5,100) more than doubled the 1996 volume (2,800) because of equipment upgrades to accommodate APS, according to Photo-finishing News, Inc. In 1998, there were an estimated 34,000 mini-labs operating in 28,400 locations in the United States, along with about 2,450 wholesale central labs.

Digital equipment increases the opportunity to expand services for all sizes of photo-finishing laboratories because it can process and print film and scan the images onto computer CDs or for use online. This trend increases the importance of connectivity between the imaging industry and the information technology industry. In addition, digital imaging kiosks were installed at an unprecedented rate in 1998. By mid-October, there were more than 14,000 of those units in operation throughout the United States.

Market Structure

The worldwide photo-finishing market dipped 0.2 percent to almost $33 billion in the late 1990's (1998). The amateur segment accounted for $24 billion, or 73 percent of the total, and the nearly $9 billion professional segment accounted for the remaining 27 percent. Growing acceptance of both APS and digital cameras stimulated the photographic market, and picture taking increased nearly 4 percent worldwide in 1998 to 91.3 billion exposures, according to Photofinishing News, Inc., a Florida-based research firm. The U.S. amateur photo-finishing market rose 7 percent to $6.5 billion in 1998. Total picture exposures increased 8 percent from 24.9 billion to 26.9 billion. Exposures using conventional and digital technology each increased by 1 billion units. Color negative film, however, accounted for over 95 percent of both the value and the volume of film processed.

By outlet type, discount stores and mass merchandisers have captured the largest share of amateur photo-processing volume, with 37 percent percent of the total rolls processed. Drug stores and supermarkets hold the second and third largest shares, with 24 percent and 18 percent, respectively. By print size, the 4 by 6-inch print continues to gain market share, rising from 36 percent in 1993 to 59 percent of total prints in 1998. Enlargement volume, accounting for about 6 percent of total rolls processed, is expected to increase as digital imaging evolves with new products to manipulate images and restore faded photos.

The number of establishments in photographic services increased slightly. The consumer has an increased interest in photography, but the advent of digital cameras has limited the amount of processing work required.

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As indicated in the background section above, competition has increased and the industry has undergone a period of restructuring. This has resulted in overall cutbacks in the photographic services workforce.

The industry is generally fragmented. It is unusual in that the industry is comprised of either very large players or very small players. As seen in the table below, the top 4 players dominate one end of the industry. At the other end are a multitude of small local shops.

Concentration of Revenue by number of firms in the industry is as follows:

Total Number of firms       Revenue as % of all firms in the industry

     4 largest                             23.6%
     8 largest                             28.4%
    20 largest                             32.4%
    50 largest                             36.4%

Market Metrics

A steady climb describe the revenue picture for photographic services. Revenues have consistently increased for the past several years and now exceed US $10 billion. Picture taking seems a constant.

Recent Trends and Developments

The professional segment of the U.S. photo-finishing market increased nearly 9 percent to $5.3 billion in 1998 after a slight decline in 1997. The portrait and candid segment of the market, with 43 percent of the total, grew for 3 consecutive years, and the number of portrait sittings rose 2 percent in 1998. School-age portrait sittings account for one-fourth of total sittings. Preschool sittings, accounting for 12 percent of the total, declined for the second consecutive year. Other professional services include commercial custom lab work.

Photographic workers should expect to endure another year of employment cutbacks as companies make difficult restructuring decisions to consolidate manufacturing operations and continue to form strategic alliances with companies outside the industry. Total industry employment is expected to drop about 6 percent to 51,000 employees in the year 2000, with production workers accounting for about 60 percent of the total. The U.S. economy has enjoyed a period of overall healthy growth over the last several years. Discretionary spending and purchases of leisure goods and services have come to include many high-end photographic products, consumer electronics items, and recreational travel. This consumer spending pattern is expected to remain favorable, although indicators suggest that a slowdown in the economy may occur in 2000.

Over the next 5 years, the shift away from traditional photography will continue as manufacturers embrace digital technologies and produce innovative products that reflect this blending. Photo-finishers will offer both conventional film and digital finishing services to remain competitive. More film-to-digital conversions and a slowing in sales of film-based micrographic products in favor of digital hybrid imaging systems are expected. The transition from analog to digital photocopiers is projected to take place well before 2004 because of lower prices and the increased functionality of digital products. Color products will become more affordable, with higher speeds and greater resolution stimulating business sales.

Sources

• Most current US government sources