Jeff Hayes Photo Opportunities


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Key note presentation discussing how the photo industry has changed with the advance of digital technology.
Data on the size and growth of the photo book market. My views on what it will take to grow beyond the consumer space. Thoughts about innovation and how to avoid being trapped by marketing myopia in a connected world.

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  • Distinguished audience, historic region, very interesting people – innovators, entrepreneurs, leaders NY Times Op Ed article by David Brooks's a long time columnist for the NY Times and WSJ. Jews are a very interesting group of people. 0.2% of the world population, but 54% of the world chess champions, 27% of the Nobel physics laureates and 31% of the medicine laureates. Israel has more high-tech start-ups per capita than any other country. It leads the world in civilian R&D spending per capita and ranks second behind the U.S. in the number of companies listed on the Nasdaq. Israel, with 7 million people, attracts as much venture capital as France and Germany combined. Israel now has a classic innovation cluster, a place where tech obsessives work in close proximity and feed off each other’s ideas. Certainly, the imaging industry has greatly benefited from the effects of this “innovation cluster” with the likes of Efi Arazi, founder of Scitex as well as Benny Landa, the founder of Indigo. So we are in a place with a great concentration of innovators that are helping to create the next wave of opportunities for imaging and printing industry. We are also in a room with most of the photo printing industry’s leaders who are presented with many opportunities but cannot rely on past formulas and their current products for future success.
  • Jeff Hayes Photo Opportunities

    1. 1. Photo Books and Other Imaging Opportunities in a Connected World Jeff Hayes President
    2. 2. Agenda <ul><li>Next era in photo </li></ul><ul><li>Photobooks … Another 20% solution? </li></ul><ul><li>Consumer, pro, and B2B opportunities </li></ul><ul><li>Avoiding marketing myopia in a connected world </li></ul>
    3. 3. Era of Scarcity (1830’s to 1890’s) <ul><li>Production difficulties </li></ul><ul><li>Limited distribution </li></ul><ul><li>Limited social value </li></ul><ul><li>Value = workmanship </li></ul>Frederick Scott Archer (English inventor of wet plate photography) Matthew Brady (American photographer covering Civil War)
    4. 4. Era of Plenty (1900 to 1980’s) <ul><li>Production is easy </li></ul><ul><li>Mass distribution </li></ul><ul><li>Higher social value, more sharing </li></ul><ul><li>Value = distribution network </li></ul>George Eastman (founder of Eastman Kodak Company)
    5. 5. Era of Excess (1990 to 2008) <ul><li>Production is trivial </li></ul><ul><li>Distribution is virtual/infinite </li></ul><ul><li>Sharing is ubiquitous </li></ul><ul><li>Value = right content in the right context </li></ul>Larry Page & Sergey Brin (founders of Google)
    6. 6. Era of Optimum? (2010 ~ ?) <ul><li>Production is seamless </li></ul><ul><li>Distribution is relevant </li></ul><ul><li>Sharing is personal </li></ul><ul><li>Value = personal experience, expression </li></ul>
    7. 7. What is valued in the era of optimum? <ul><li>Context </li></ul><ul><li>Originality </li></ul><ul><li>Quality </li></ul><ul><li>Service </li></ul><ul><li>Insights, relevance </li></ul>Monetize image when it reaches the most valued context
    8. 8. Purchased Photo Merchandise or Cards in Last 12 Months N = 5250 6321 2222 During the last 12 months, have you purchased any photo merchandise items from an online site or retail store? Source: InfoTrends 2006, 2008, 2009 Photo Merchandise Studies (North America) <ul><li>Photo Greeting Cards, Folded Photo Cards </li></ul><ul><li>Photo Books </li></ul><ul><li>Photo Calendars </li></ul><ul><li>Specialty Prints (e.g. enlargements, collages, posters, framed prints) </li></ul>
    9. 9. Likelihood of Purchasing Photo Merchandise (base = non-customers) N = US consumers that have not purchased photo merchandise How likely are you to purchase Photo Merchandise items during the next 12 months? Total Males Females
    10. 10. U.S. Photo Merchandise Revenue By Product Category $ Millions ’ 08 to ’13 CAGR = 22%
    11. 11. Growing demand for photo products Memory books Calendars Greeting cards Novelty items Catalogs Events Fundraising Portfolios Travel Self publishing Wedding albums Real estate Year books Books
    12. 12. Focus on Consumers <ul><li>Moms, family memory keepers </li></ul><ul><ul><li>First time customers </li></ul></ul><ul><ul><li>Repeat </li></ul></ul><ul><li>Convenience, quality, good value, lasting </li></ul><ul><li>Home, retail, on-line, hybrid </li></ul><ul><li>Not just a “gift” </li></ul><ul><li>Marketing, marketing, marketing </li></ul>Special trial offers Repeat purchases Bundles Upsell
    13. 13. <ul><li>1961 – Company founded by Senator H.C. Heinz Neumüller </li></ul><ul><li>1993 – Company goes public </li></ul><ul><li>1996 – 2.1 billion colour photo prints </li></ul><ul><li>1997 – CeWe Digital </li></ul><ul><li>2005 – Introduce CeWe Photo Book </li></ul><ul><li>2008 – Partner network (50,000 retail locations) Printed 2.6 million photo books </li></ul><ul><li>2009 – 3.6 million photo books, 2.6 billion total prints (+8.1%) </li></ul><ul><ul><li>Film prints 32.6% </li></ul></ul><ul><ul><li>Digital prints 11.7% </li></ul></ul><ul><ul><li>Photo books 37.7% </li></ul></ul><ul><ul><li>13 production locations, Over 50 digital presses (HP Indigo, Kodak) </li></ul></ul>
    14. 14. Focus on Pro Photographers <ul><li>Business & workflow solutions for pros </li></ul><ul><ul><li>Portrait </li></ul></ul><ul><ul><li>Wedding </li></ul></ul><ul><ul><li>School/yearbook </li></ul></ul><ul><ul><li>Events </li></ul></ul><ul><ul><li>Fine art </li></ul></ul><ul><ul><li>Nature </li></ul></ul><ul><ul><li>Commercial </li></ul></ul><ul><li>Quality – printing, paper, binding </li></ul><ul><li>Value-added products – not just sitting fees & prints </li></ul>
    15. 15. <ul><li>2007 – Company founded by Dhiraj Kacker (CEO) and Peeyush Rai </li></ul><ul><li>2008 – Introduced coffee-table-books for pro photographers </li></ul><ul><li>2008 & 2009 – HP Digital Print Award winner for Asia-Pacific region </li></ul><ul><ul><li>High quality product & brand </li></ul></ul><ul><ul><li>Sell to pro photographers </li></ul></ul><ul><ul><li>290 employees (100 sales, 85 photobook designers, 55 production) </li></ul></ul><ul><ul><li>HP Indigos, in-house software, etc. </li></ul></ul>
    16. 16. Consumer Interest & Pro Photographers Offering Merchandise Consumers with high interest in photo merchandise N = Consumers that have purchased professional photography in last 12 months Pro Photographers offering photo merchandise
    17. 17. Focus on Corporate Clients <ul><li>Solutions for corporate clients </li></ul><ul><ul><li>Direct marketing </li></ul></ul><ul><ul><li>Real estate </li></ul></ul><ul><ul><li>Travel/tourism </li></ul></ul><ul><ul><li>Fundraising </li></ul></ul><ul><ul><li>Funeral services </li></ul></ul><ul><ul><li>Sports teams, clubs </li></ul></ul><ul><li>Sales tool, brand builder </li></ul><ul><li>Cost-effective, efficient </li></ul>
    18. 18. Companies using photo-intensive printed materials N = 1,059 marketing managers Multiple Responses Permitted
    19. 19. How effective are photo-intensive vs. non-photo-intensive materials at …? N = 1,065 marketing managers
    20. 20. <ul><li>Founded in 1976 as service bureau </li></ul><ul><li>Acquired in 2001 by Toby Gadd, President </li></ul><ul><li>Target clients </li></ul><ul><ul><li>Advertising agencies </li></ul></ul><ul><ul><li>Corporate marketers </li></ul></ul><ul><ul><li>SMB </li></ul></ul><ul><li>Cross-media personalized marketing </li></ul><ul><ul><li>Direct mail, e-mail </li></ul></ul><ul><ul><li>PURLs, and customized web landing pages </li></ul></ul> <ul><li>Key technologies </li></ul><ul><ul><li>HP Indigo, Designjet </li></ul></ul><ul><ul><li>Adobe CS4 Premium </li></ul></ul><ul><ul><li>DirectSmile Generator </li></ul></ul><ul><ul><li>ParticleLogic (proprietary) </li></ul></ul>
    21. 21. Focus on New Content Sources Fine Art/Pro Photography Licensed Social Publishers
    22. 22. <ul><li>1979 – Company founded as traditional commercial printer </li></ul><ul><li>1999 – Started selling customized note pads and photo products </li></ul><ul><li>2003 – Established relations with Yahoo!, Snapfish, Tiny Prints, etc. </li></ul><ul><li>2006 – Sold off commercial printing business </li></ul><ul><li>2008 – Produced 1.3 million photobooks (60% vs. 2007) </li></ul><ul><li>2009 – Inc. 5000 list of fastest growing U.S. companies (#2120) </li></ul><ul><ul><li>Focused on back-end infrastructure, fulfillment </li></ul></ul><ul><ul><li>40 digital presses including 18 HP Indigos, Scalable RIP Solution </li></ul></ul><ul><ul><li>Created new design group to offer templates, licensed content </li></ul></ul><ul><ul><li>Analyze data to understand customer preferences, trends </li></ul></ul>
    23. 23. Are printed photo products relevant in a Web 2.0 world? social affiliation being online digital self expression web as an application platform participatory web web 2.0
    24. 24. Are you suffering from Marketing Myopia? Source:
    25. 25. Attributes of marketing myopia <ul><li>Focused on products, not customers needs and desires </li></ul><ul><li>Believe growth is assured from growing/more affluent population </li></ul><ul><li>Cannot see any competitive substitutes </li></ul><ul><li>Place too much faith in mass production </li></ul><ul><li>Preoccupied with enhancements & cost reduction </li></ul>Theodore Levitt (1925-2006) Economist & Professor Harvard University
    26. 26. What business are we really in? Railroad Transportation & Logistics OR
    27. 27. What business are we really in? Prints Connected Experiences OR
    28. 28. Edit Capture View Print Preserve Share 180 Billion 21 Billion 40 Billion 900 Billion 2010 60 Billion Trillions
    29. 29. Thinking Screen Media
    30. 32. Innovation discovery skills Harvard Business Review – December 2009 <ul><li>Associating </li></ul><ul><li>Questioning </li></ul><ul><li>Observing </li></ul><ul><li>Experimenting </li></ul><ul><li>Networking </li></ul>
    31. 33. “ Creativity is just connecting things.” Steve Jobs, Wired Magazine, February 1996
    32. 34. Apple vs. Sony (ADR) 10-year share price performance Source: Wall Street Journal iPod iTunes 4.1 Nano iPhone iPhone 3G iTablet?? Steve Jobs illness rumors iPod Photo
    33. 36. Recommendations <ul><li>Understand your customers’ needs & desires </li></ul><ul><li>Experiment with enabling technology and services </li></ul><ul><li>Develop and grow partnerships </li></ul><ul><li>Strengthen sales & marketing </li></ul><ul><li>Think like an innovator </li></ul>
    34. 37. “ What companies lack is not opportunity, but some of the managerial imaginative and audacity that made them great.” Theodore Levitt (1925-2006) Economist & Professor, Harvard University
    35. 38. Jeff Hayes
    36. 39. Sources The Tel Aviv Cluster, David Brooks, NY Times, January 12, 2010 Marketing Myopia, Ted Levitt, Harvard Business Review, July/August 2004 The Innovator’s DNA, Harvard Business Review, December 2009 Wired Magazine, February 2006 The Wall Street Journal A History of Photography iPod History American Printer, March 2009 InfoTrends CeWe Canvera Montage Graphics RPI Thinking Screen Media