The digital camera revolution, in conjunction with the explosive growth of the internet has had profound changes on photography. Some changes have been dramatic, while others have been more subtle. In times of revolutionary technological changes, it is important to adjust your perspective to the new realities and contemplate just how far we have come. I will put the second part of this article online shortly.
1) Printing & Pioneers – A Little Perspective
If you asked to see someone’s family photos years ago, they would often reach for their wallet or purse, and proudly show you 2X3 photos stored in plastic coverings. Today when you ask the same question, people will almost always reach for their smartphones, and either pull up pictures stored on their mini SD cards or quickly navigate to a website such as flickr. Low cost digital picture frames have also become quite popular, enabling people with little in the way of technical know-how to store hundreds or thousands of photos on an LCD in an attractive picture frame, which cycle through every few seconds.
Todays’ kids are growing up dependent (overly?) upon smartphone technologies and when they think of photos, they think in purely digital terms. From their smartphones, to their iPads, to their computers, the younger generation’s photos never seem to make it onto paper. Printed photos are, for the most part, what their parents and grandparents relied on. High end quality photographic art and the obligatory high school portrait, family group photo, or wedding scene will undoubtedly continue to grace people’s walls, but printed photos are quickly losing their relevance. Those companies in the ink, photographic printing machines, paper, and retail printing businesses will have to continue to adjust to this rapidly changing trend.
Who would ever have imagined that the once mighty Kodak, a pioneering juggernaut whose very name was synonymous with the term “photography,” would exit the film business and declare bankruptcy earlier this year? George Eastman, the founder of Kodak, started the enterprise in 1880. Kodak’s intellectual property assets were recently estimated to be worth $2-$2.5 billion dollars, but the company needed a loan just shy of $1 billion to continue its operations. In 1980, Kodak employed over 128,000 around the globe, with approximately 60,000 of those employees based in the Rochester, NY area. Today, Kodak’s global workforce is closer to 17,000, with approximately 7,000 based in Rochester.
Contrast this development with the recent news for Instagram, a smartphone software company less than 2 years old with 13 employees (Yes – 13!). Instagram’s claim to fame? Software that enables users to make their smartphone pictures mimic the effect of Kodak’s 1950s/1960s era TRL (twin reflex lens) cameras and other similar looks, and share their creations with others around the globe. Facebook purchased Instagram for $1 billion dollars just a few months after Kodak’s bankruptcy announcement. Truth is indeed stranger than fiction…
2) Putting Off The Ritz
As Ritz Camera enters its second bout with bankruptcy (June 22, 2012), we are reminded once again that the traditional photography stores on the corner are nearly gone, and even larger camera store chains seem to be fighting a losing battle. Jessops, a large UK camera retailer founded in 1935, has also fallen on hard times over the last few years and its future seems far from certain. Factors such as low cost digital cameras with smaller profit margins, reduced need for printing services, fewer people relying on film, an increasingly wider array of camera models and more sophisticated technology, and cameras so cheap that it made little sense to repair them, combined to doom the traditional small camera shops that used to dot every city landscape.
In the popular movie, “You’ve Got Mail,” an interesting dynamic played out between Joe Fox (Tom Hanks), head of the book megastore, “Fox Books”, and Kathleen Kelly (Meg Ryan), owner of “The Little Shop Around The Corner.” It involves the struggle between the small book store operator and the big box book store and discussions of folksy nostalgia and the hard-nosed facts associated with volume, profit margins, and changing consumer preferences and buying habits. Their discussions, although related to the book business, closely mirror many of debates and sentiments associated with those comparing traditional camera shops with the big box stores and mega online retailers such as B&H, Adorama, and Amazon.
People sometimes wistfully describe the demise of the full service camera shop, but the simple truth is that people didn’t support such stores because other retail establishments better met their evolving needs. Many of the services provided by these camera shops were simply obsoleted. Who was going to spend $100 to repair a $200 camera, which was likely replaced by a new model with more features and costing $175? And this assumes the camera shop could even maintain the expertise necessary to deal with the slew of models available. Rapidly falling camera prices also required significantly higher sales volumes in order for the stores to make a decent profit. There are still some top-notch camera shops that have carved out a unique niche by catering to the professional market place, but their numbers are dwindling and they face increasing pressures. And the wealth of product information available on the internet has supplanted much of the expertise that once was the domain of the camera store staff.
2) The Vanishing Big Box Store?
With the demise of the local camera shop, and the larger camera store retail chains on the ropes, one might think the traditional big box stores are safe, but even they face a rocky future. Circuit City? Gone. Best Buy? Not doing so well financially. More people are flocking to the internet for purchases of common electronics as well as higher end items. A few years ago, Amazon was all about books. Now, when people think of purchasing anything, Amazon is almost always on the list of first places to check.
The big box stores have massive overhead costs associated with physical stores, inventories, and personnel costs. Not necessarily bad if having them translates into some competitive advantage, but unfortunately, that is simply not the case. While I have bumped into some extremely sharp, knowledgeable staff at big box stores, more often than not, most sale personnel simply don’t have the in-depth product knowledge that would distinguish the buying experience at a big box store from any other potential retailer.
Given the big box wage scales, staff turnover, increasingly sophisticated high tech products, the tremendous rate of change of product models, and narrowing profit margins, it is exceedingly difficult for them to keep pace with all these changes. It is a rare big box sales representative that can assist customers distinguish the slew of camera models and their feature and make an informed decision. All too often, the discussion will quickly move toward the number of megapixels, since that is something easy to quantify and distinguish. And more megapixels are always better, right? ;)
Supported by massive sales volumes, B&H and Adorama can provide a degree of customer service not found at the big box stores or Ritz Camera. B&H has what I consider the state-of-the-art internet site when it comes to product selection, organization, friendly user interface, and ease of buying. Long before I began writing for Mansurovs, I was a huge fan of B&H, since I believe it was the model for how to run a successful, customer oriented, internet retail establishment. Amazon’s “recommended products” and statistics showing what other people purchased after looking at a given product, can also be helpful, although perhaps are not quite as relevant for DSLRs and lenses as they are for books.
3) The Tax Man Cometh
Many state governments in the USA don’t tax internet purchases. There is good reason to believe, however, that some of the previous opposition to taxation of internet sales by state governments is falling by the wayside, primarily due to the states facing tremendous budget shortfalls. Brick and mortar camera shops and big box outlets are happy with this potential change however, as they have long-blamed the tax free status of internet retailers as the main reason why people are abandoning their showrooms.
Some politicians claim that this is an issue of “fairness” and that it levels the so-called playing field between internet retailers and local brick and mortar stores. I believe this is a bogus argument. If you really want to put that to a test, walk into a big box retailer and stop by the camera section. Engage the sales person in a discussion regarding camera features and determine how much they know about the various models. Then ask yourself why you wouldn’t order one from the comfort of your living room from a website like B&H and save the gas money associated with driving to the store.
Sadly, the only thing that will be accomplished by taxing the internet will be to diminish people’s purchasing power. It will do little to change the fundamental shift of sales from local camera shops and big box retailers to the leading internet retailers. And it will do even less to curb the wasteful spending habits of our state and local governments. It will be interesting to see how this one plays out. You can bet none of the politicians will go back after the tax laws change and measure how well the law delivered on the alleged benefits it was meant to provide. And good luck attempting to find anyone that will attest to the negative effects of the law.
4) Consumer, Educate Thyself
One of the driving forces behind many of the changes associated with the internet is the proliferation of vast amounts of detailed information and ability to share it with others around the globe nearly instantaneously. It seems simple enough, but this fact alone accounts for more of the changes taking place than most of us can comprehend. In years past, photographers would have to rely on a handful of photography magazines for product reviews. Due to the cost and time associated with assembling and distributing a magazine, it was a bit hit or miss with respect to finding a review of something you were interested in buying. And if the review of that item was in a previous magazine? You might be lucky to find that one if your fellow photographers happened to save that particular copy. If not, you would likely be buying a back copy from the magazine company – not exactly the fastest route to understanding how a given lens or SLR fared. Due to the fact that much of the magazine companies’ revenues were linked to advertising from the very companies’ whose products were being reviewed, one might reasonably question how objective the reviews were.
The other way to uncover product review information was word of mouth. If you belonged to a local photography club or attended some photography seminars, chances were that some of the discussions were centered on comparing notes regarding equipment. This worked out fairly well for relatively simple camera models with longer product life cycles, but such discussions were almost always limited to your particular geographic area, and chances for widespread collection of and dissemination of such information was nonexistent.
Fast forward to today. The digital camera era has ushered in a seemingly endless array of new camera models, with increasingly shorter product cycles. And each new model is more complicated and sophisticated than the previous generation. Camera companies are valiantly trying to make the devices easier to use, but the array of menu items associated with new features continues to grow. It is no surprise to find that staff members of big box stores and Ritz have a difficult time keeping up with the technologies and the myriad of models, features, and relative comparisons between them.
Thankfully, we witnessed an explosion of photography information available on the internet, to coincide with the rapid technological advances in digital cameras, photo processing software, and shorter product life cycles. There are probably a few dozen popular photography forums where people can find industry news, detailed product reviews, photography software tutorials, and general photography how-to information. A few sites even focus primarily on gossip and rumors. Beyond the more well-known forums, there are countless blogs put out by very talented individuals covering just about every aspect of photography you can imagine. Social media sites such as Facebook and twitter also enable people and the product companies to interact in real time. People can now exchange information with others from nearly every nation almost instantaneously, and review information dating back nearly a decade.
This is a real game changer relative to the industry. Why? Within the time that it might take for you to drive to Ritz or Best Buy, you can read a few dozen product reviews by reputable sources, watch videos, search the photography forums for comments related to the product you are considering buying. This significantly changes the nature of the relationship between you and the retailer. No longer do you have to rely on the knowledge of a store employee, which may or may not be as extensive as your own, or have to consider whether that advice is influenced by either what he/she is comfortable with or is incented to sell. When you can quickly and easily educate yourself on the various product offerings, the “value add” traditionally offered by the retailer diminishes significantly. At that point, selection, price, and service become the drivers. That is precisely why companies such as Amazon, B&H, and Adorama have been growing significantly while companies such as Jessops, Ritz, and Best Buy continue to struggle, and Circuit City closed its doors.