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Analysts see bright spots in dark photo market

Camera shipments will decline in 2009, but SLRs and photo books are among the areas where there still is growth.

LAS VEGAS--The bad economy has hurt the photography business, but there are a few areas of growth amid the gloom.

Among the bright spots are digital SLR cameras, photo books, memory-keeping moms, and Web sites adapted for mobile phone use., concluded InfoTrends analysts sharing research results at the Photo Marketing Association (PMA) show here Wednesday.

Overall, though, the mood is grim.

"It sure feels different at this year's PMA. There's not so much booth space, not so much traffic. The energy level is down. This recession feels different from back in '01 (which was) somewhat contained to the tech sector," said InfoTrends President Jeff Hayes. "Now it has become an issue of a consumer confidence crisis and has become a lot more broadly based. The photo industry is feeling this."

Analyst Ed Lee forecasts that the North American compact camera market will shrink in 2009--about 7 percent if the economy shows some recovery by the fourth quarter or 10 percent if it takes until 2010. Annual growth should return next year, but not by much. "It looks like 2008 was the peak year for digital camera sales in North America," Lee said.

"Moms are much more photo-active than the average digital camera owning consumer. Moms often describe themselves as 'family memory keepers.'"
--David Haueter, analyst

And that makes life hard for camera makers and the retailers who sell them, with more companies pushed out of the market.

"You're going to see some further consolidation take place. Profit margins are going to be cut to the bone," Lee said.

OK, so what about those bright spots? Digital SLRs, for one, which are bulkier and more complicated than compact cameras but which offer better image quality and responsiveness. Penetration of these cameras is much lower than compact cameras, and people are still buying them, Lee said.

"The digital SLR market remains positive. We do expect we'll see growth in 2009, anywhere from 5 to 7 percent growth," Lee said, with about 3 million units sold in North America this year.

And of course, selling SLRs offers retailers more opportunities to sell accessories such as lenses, flashes, and filters.

"With digital SLRs, you've got to keep in mind the body is really only the start of the sale," Lee said. "Don't forget to ask your customers if they want fries with that order."

High-value customers include hobbyists, young adults, and the family memory keepers. More often than not, that last category means moms, who are the market to reach when it comes to the business of prints and photo books.

Moms take a lot more photos than the average person.
Moms take a lot more photos than the average person, according to research firm InfoTrends. InfoTrends

The average person in a recent InfoTrends survey prints 37 photos every 3 months. Moms with children under 7 years old print 58.6 in that period, and moms with children aged 7 to 11 print 77.7.

"Moms are much more photo-active than the average digital camera owning consumer. Moms often describe themselves as 'family memory keepers,' , said analyst David Haueter. And prints are somewhat recession-proof: "Break out the mac and cheese. Prints go great with comfort food and cocooning."

Overall, the print market should stay about level in coming years. But photo books and other means of showing photos are booming, Haueter said.

"We expect revenues from photo books, cards, and calendars to jump from $940 million in 2008 to $1.5 billion in 2010," he said. "We expect strong growth through end of our forecast period, which runs through 2013."

In addition, corporate photo printing--annual reports, catalogs, real estate brochures, and commemorative books, for example--is a relatively new market.

But software and Web sites for creating photo books is bad. InfoTrends research showed about 70 to 80 percent of people abandon the process partway through, Haueter said.