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Digital Profits, Without Prints

This PMA news item raises a question we’ll be putting to imaging executives at our forthcoming roundtable (due out in the Aug. 20 issue) — is the center of gravity shifting in the online digital photography market? 

Just before the explosion of social networking and user-generated content sites, digital photography on the Web was all about driving prints and output. For most of the major sites — Shutterfly,Kodak Gallery, Hewlett-Packard’s Snapfish — it still is. Despite the profusion of creative options such as photo books, this is essentially old wine from a new bottle: the analog business model of revenue through output in the digital era. 

But there’s a whole other world out there in cyberspace:

Nearly 177.8 million people worldwide viewed Web content in April made with online tools from companies that let people post photos, videos and music on other Web sites, according to data from Web-tracking firm comScore Inc.

The comScore data is among the first to measure the reach of companies such as Slide Inc.,RockYou Inc. and PictureTrail Inc., which create applications known as widgets that consumers can use to produce videos, photo slide shows and music playlists … These individual pieces of content can be posted on blogs and social-networking sites such as MySpace, a unit of News Corp., and Facebook. So far, Slide and other widget makers have earned money mostly by selling ads on their own sites, but have found it difficult to generate revenue from the content created using their services and displayed on other sites…

There’s speculation that, given the enormous audience, ad sales will pick up. But I think this also underscores another point — there is innovation in the digital imaging marketplace that’s not coming from the established players or even from companies traditionally associated with digital imaging. More importantly, this proves that there are revenue opportunities beyond physical output — though just how much, and who captures it, are the great unanswered questions. 

On a panel discussion once, I remarked that digital technology has done to the photo business what it did to the music business — overturned an existing business model and presented the established players with an almost impossible dilemma — how to convince consumers to pay for something (music, viewing photos) that they could now do for free. 

Perhaps Facebook, YouTube, et. al. have hit on a possible answer.