Changing Face of Business

[Steven G Webb]

Someone once said, "Build a better mousetrap and the world will beat a path to your door". Well, we got mousetraps and we still got mice. A "better" hasn't been defined. Certainly a cheaper mousetrap is the one that sells. Apparently it doesn't matter if the mousetrap is made of inferior materials, is reliable, or differs greatly from the rest of the traps.

Recently Olan Mills Studios Inc., once the world's largest family portrait company and privately held family owned business, was bought out by rival Lifetouch. Initially, Lifetouch bought OMS' church directory division. Subsequently, the entirety of the Olan Mills company was bought. There are no plans to continue the Olan Mills brand, it will be phased out. Lifetouch feels there is no longer a significant brand recognition.

On February 9 of this year the CEO of portrait giant CPI stepped down. CPI Corp. CEO Renato Cataldo too the reigns in 2006 and the company's stock plunged 97% between October 2006 and February 2012. Analysts attribute the company's decline to the proliferation of digital cameras and the decline in numbers of people sitting for formal portraits. CPI has a rocky history of take-overs and acquisition of competitors including former rival Photo Control Corporation who shared in the department store portrait studio business. CPI, in 2010, bought out bankrupt Kiddie Kandids operating studios in Babies R Us stores in hopes of furrowing out profits from the baby and infant market but noted that same-store sales were off 25% from the previous year. Recently CPI moved out of the studio environment and in another attempt to diversify bought wedding photo franchiser Bella Photos. Those results have not been positive.

There are a lot of industry giants in all manner of business who we feel should know what they are doing. AMR, the parent company of American Airlines could not keep AA out of bankruptcy and it appears likely that American will be absorbed by rival US Airways. Morgan Stanley Chase who operates Chase banks announced the company lost a couple of billion dollars through some bad investment decisions.

Now some people would say, "If these heavy hitters could not find a profit in the business they are expert in, there is no profit in that business". Others may assert, "They couldn't find an elephant in a room". What's happening in the "industry giant business" is pretty widespread failure.

Is there something inherently non-profitable about professional photography? Has the proliferation of digital cameras and the paperless society trend simply watered down the profit so that its not lucrative as it once was? Or, is there something wrong with the corporate big business approach to some things and the good money is in boutique style niche market methodology.

Let's have some discussion and develop some ideas on how we're going to operate in this climate and what the realistic expectations should be. I hearken back to a day when small portrait studios could not compete with the CPI, PCA, Olan Mills type operations. Today those operations don't seem to have a cornered market anymore. Thoughts?

[jfklein13]

One thing I haven't heard discussed is the profile of the generations, such as in Lisa Johnson's "Minding Your X's and Y's" (Link:

Amazon.com: Mind Your X's and Y's: Satisfying the 10 Cravings of a New Generation of Consumers (9780743277501): Lisa Johnson: Books

Amazon.com: Mind Your X's and Y's: Satisfying the 10 Cravings of a New Generation of Consumers (9780743277501): Lisa Johnson: Books
Amazon.com: Mind Your X's and Y's: Satisfying the 10 Cravings of a New Generation of Consumers (9780743277501): Lisa Johnson: Books

).

One observation there is that Generation X and Y like the creative outlet of producing rather than consuming -- meaning things like grabbing a video camera and making your own production and uploading to YouTube, where before your only option was to watch something that somebody else made. In that vein, I think there are a significant number of Moms who might have gone to a chain portrait studio before but are now using their digital camera to capture their kids.

[Steven G Webb]

I haven't found the X or Y generations to be more intelligent, sophisticated or savvy. I do agree that they had rather grab a shot with their smart phone than purchase a picture. I run a dozen of the little thieves away from our display screens taking pictures of our images, rather than buying them. I can't give my buy-in to the opinion, stated as fact, that the 18-40 group has more discretionary income than any generation before them. The younger end of that range may be spending mom and dad money or may not be shouldering responsibilities like mortgages, so a larger percent of their income may be disposable. Which is bigger 1% of 1,000 or 10% of 100. Just because a larger percentage of their income can be let go of, I don't think we can say it's a larger sum of money.

What are we thinking, that selling cameras to this group is a better business than selling photos to them?

Steve

[jfklein13]

Is selling cameras to this group a better business than selling photos? Not sure about that. What I do wonder is if we understand the way the current Moms and Dads are consuming photography, we'd be in a better position to market to them.

I was thinking it was plausible that the marketing to the current generation of Moms and Dads has changed, and that the chains are not adapting.

As far as stealing pictures with the camera phone, it reminds me of the story of digital music on Napster, and Apple iTunes. College kids were stealing digital music through Napster, and the music industry hated it. Then Apple iTunes came along with a different price point and took advantage of what the kids were used to, namely downloading individual songs rather than buying albums as a packaged physical good, and created a giant business from it.

[Bobby Deal]

I find it far more equitable to seek out clients who need photography rather then those who want it. This idea pretty much leaves the family portraits and weddings on the table for someone else to fight over. While I continue to make my ends meet each month with the more infrequent but more profitable commercial jobs.

Even here though we are seeing more and more companies making the switch to in house photography because Joe in the mail room got that fancy new d7000 at Ritz last week or Susie in HR has a 5D she uses to take snap shots of her kids. Most these clients know what they need and expect quality output so they come back after a failed attempt or two by the I house staff. Sadly they always comeback with the notion that they can bargain the price down because now I know I am competitions against some one in house.

[Steven G Webb]

Originally Posted by Bobby Deal

I find it far more equitable to seek out clients who need photography rather then those who want it. This idea pretty much leaves the family portraits and weddings on the table for someone else to fight over. While I continue to make my ends meet each month with the more infrequent but more profitable commercial jobs.

Even here though we are seeing more and more companies making the switch to in house photography because Joe in the mail room got that fancy new d7000 at Ritz last week or Susie in HR has a 5D she uses to take snap shots of her kids. Most these clients know what they need and expect quality output so they come back after a failed attempt or two by the I house staff. Sadly they always comeback with the notion that they can bargain the price down because now I know I am competitions against some one in house.

There's a change. I used to attend leadership and motivational seminars quite frequently in my past profession. We're talking over 20 years ago. Back then the notion was selling wants was more profitable than selling needs. The question was asked, "Who makes more, they guy who sells Mercedes Benz cars or the guy who sells bread?" The bread guy was selling to a need, food. The Mercedes Benz salesman was selling to a want, luxury. People have hunger, that's the need of nutrition, simple to fulfill. People also have appetite which is the want over and above the necessary requirement. Hunger is food, appetite is caviar. Need is transportation, want is the Mercedes Benz.

Now we're looking for people who need photography, rather than those who want it. 30 years ago a portrait studio (at nearly any level of quality or price point) would flourish because there was a higher "want" power than "need". People felt a need, for example, of photographs to mark their children's milestone achievements. They wanted something better than a snapshot. Now the snapshot is the constant. The variables are private studios and photo mill studios. The determining factor between which variable got a specific person's business was simply money and which of the two options could be afforded.

Today a snapshot will do. It isn't that high quality multi-function DSLRs, bridge cameras, or point-n-shoot cameras make studio quality pictures. I see a TON of crap pictures taken with cell phones and people are happy with them. I ain't sure what happened.

I'd modify to a changing market, learn a new style like food, commercial, or weddings if only I could find a way to bring a profitable product to a paying customer.

Steve

[Sketch]

Excellent thread as always Steve.

Have to say that I have never looked at the big picture as far as photography as a business goes. I have been in the industry my whole life. Sometimes you make bank. Sometimes work is lean to put it mildly.

In my particular world of commercial photography I am busier then hell. More and more my clients need content because the days of reading a magazine once every 2 weeks has been taken over by a bombardment of slick photos. Add the vehicle of fast paced social media and you have a new outlet for advertising on your hands. Should also mention that soon content will be mostly viewed on cell phones and tablets. Adds one more platform to work on. Additionally I see video being an added bonus and or mandatory to accompanying still photography. Cha ching!

I can only guess what goes down in the retail field. I think you are right. I can remember going to my friends houses and seeing the hallways lined with large portraits and wedding photos. I do not see that so much anymore. Access to photography is now more then ever very widespread. That is good for civilians; bad for photographers.

[RV]

Consumer photography comes down to the consumer and their wants, desires, and a receiving value for their money spent. The days of the high priced sessions are numbered with the access to better cameras, software, and finishing methods that are readily available to the consumer.

How can some one beat the Wal-mart method of retail when this method has been introduced, accepted, and became the norm? The consumers are not stupid, infact they are more informed that most give credit.

The Sears, JCPennies, Portrait Innovations of America have been successful in the photography business as they are smart enough to know what their customers want and then get them in the door. No session fees & low cost prints. Just as someone said earlier, the customers need and wants dictates where they spend their money. There need is photography services, their wants, which trump the needs in most cases, is something affordable. Define affordable in both yesteryear and today?

Affordable in Yesteryear - With the expense of gear and skill that was required to use the film cameras there were few professional tradesmen and thus created a market that basically was a monopoly for the few out there. Affordable was subjective to your local and what was available and within reason. For instance, when I as my senior photos done, in 1991, there were two professional photographers in my town of 17,000 people. 250 in the graduating class. The next town over that had a photographer was over 40 miles away. So, 125 seniors per photographer and they charged a premium fee for a few photos as they knew the deal was in their favor. You paid the premium because others did and you needed the photos.

Affordable in today - Today with the affordability of gear, less skill that is involved with producing acceptable work (to the client) and a trade that has many new and old photographers with many different artistry's, styles, and price ranges. It's a buyers market where the buyer is educated in the costs involved. With the access to professional grade gear or acceptability of lesser quality due to financial concerns or the availability to budget printing via costco, walmart, wall greens, etc the buyer. As a buyer I want to get the best possible deal while keeping acceptable service and finished products in mind. Some can afford to go the high end route, most can't or choose not to . Why spend $6.00 per 4x6 when you can order online for $0.19, or $18.00 for an 8x10 when you can purchase them at one of the retailers I stated above for $1.99? Another reason is the ratio of photographer to client is not as it used to be forcing the use of creative marketing, more affordable pricing, and a value you offer vs. your competition.

Value is what the consumers are searching for these days.

The photography market has changed in the past decade and those who don't change will be left behind unless they are satisfied with current clientele. Don't get me wrong, I am sure there are those who do quite well in several different venues, I am sure there are a few in here, but the days of monopoly are over.

I cant speak for every venue, in my post I am mainly referring to the aspect of people photography to exclude fashion or fine photography.

[Bobby Deal]

There have always been
The Haves
The Have Less and the
Have Nots

The haves tend to over buy and over pay for the same quality product as the Have Less (Neiman's VS Ross) While they believe they are discriminating when it comes to quality it is not unusual that they simply sling money around to create the illusion of knowledge.

The have less truly are discriminating when circumstances allow but often they find themselves on a razors edge between have less and have not and this uncertainty of financial well being can influence decisions to sacrifice quality for perceived value. Not I say perceived value, the low price is not always the best value but in a world of living over budget and robbing Peter to pay paulmoften times value is not considered on an apples to apples scale.

The have nots well they take what they can get and will occasinonally scrimp and save until they can afford the quality of Have Less but only when it is important to them. The rest of the time you will find them in Dollar Stores, Wal Mart and Thrift Stores.

In the world of portrait photography these groupings each drive a sector of the business. I recently had a debate with a young guy who caters to the haves. He had posted on Facebook that he was a photographer now because he was having to order his custom embroidered silk French cuff shirts in bulk. His notion was that his image was the sum of his profession. In reality he was born into his station and while the quality level of his work is less then top shelf nepotism keeps him among his own.

The Have less group is likely where most of us live. We may not be poor but we certainly are not financially wealthy. As Rayn has noted value is a major motivating factor but as he an I have exhaustively debated of late value is often a cloudy perception that can be difficult at best to define.

In the commercial sector the lines are a little clearer we tend to work with clients who are not buying photography because they want it or because they have an emotional need for it but instead we are working with those who have a business need for our service.

As such they tend to be well researched and have a strong knowledge of what they require in the photography they purchase and while often times their demands will make Momzilla at the wedding look like a pet hamster they are willing to pay the price for the hoops we jump through to deliver the quality they demand.

In commercial photography maintaining our price structure and quality levels is imperative, if we allow our sector of the industry to fall to the shoot and burn, print at Walmart level we will be out of business post haste as overhead demands that we be able to price our service with a comfortable profit margin built in. If we allow the margins to narrow we can be done before we ever get started.

So in truth there is no definitive set of rules that will fit us all but where ever we choose to settle in the big picture does have rules and standards we must strive to maintain. Yet while doing this we still have to remain flexible to change with the changing landscape of the industry that we live in. Those who try to make their living somewhere in the margins between the sectors are the ones who will find it the hardest to be full time photographers.

I cruise Craigslist on a regular basis just to see what is being offered there and what you see will be eye opening and frightening. If you really want to see where the lower end of the have less and have nots has slid to take a look through some of the gig and job offerings on there. Sad does not begin to describe the state of the industry when viewed from that perspective.

[RV]

Originally Posted by Bobby Deal

In reality he was born into his station and while the quality level of his work is less then top shelf nepotism keeps him among his own.

I cruise Craigslist on a regular basis just to see what is being offered there and what you see will be eye opening and frightening. If you really want to see where the lower end of the have less and have nots has slid to take a look through some of the gig and job offerings on there. Sad does not begin to describe the state of the industry when viewed from that perspective.

I mostly agree with you but this is where I feel you are wrong. You are passing judgement on ones work, skill, or artistry. Photography is a trade, not a profession and therefore there are no defined skills that establish a baseline set of skills or proficiency in order to be considered a photographer.

Photography is an Art, first and foremost, and a business second. Who is the judge of Art? Another artist? No! The consumer or client. This is why there are so many photography styles, methods, and options. The client chooses the artist, the artist does not choose the client. Clients weigh the value vs. the need and or want and then make decisions.

bashing another competitor or photographer for their marketing approach, skill, artistry, or what you perceive as the lack there of, just shows how you view others and the needs of prospective clients.

Answer this, what make you better than the people that choose to run adds on Craigs list?