Photo prints? Everyone wants your business

Cheryl Contee has owned a digital camera for five years, and until last month, she always printed photos the same way: at home, using her Hewlett-Packard printer.

But on Mother's Day, just as she was about to print snapshots from a trip to California to show her grandmother later that day, Contee, who lives in Washington, discovered she was out of photo paper and low on toner. She didn't have time to get both things and print the photos, so she went to a digital printing kiosk at a CVS pharmacy down the street.

Using the kiosk, she edited, cropped and enhanced the color on some shots the way she would have done at home, then shopped while the photos were printing. She walked out the door a few minutes later, prints in hand for just 29 cents each.

"I thought it would be expensive and hard," Contee said of the kiosk, "but it wasn't at all." While she plans to buy a new printer soon and still produce some photographs at home, "the kiosk is definitely in my future, too."

When cameras used only film, consumers didn't have much of a choice about where to get their photos printed, unless they had a darkroom at home. Now, with 80 percent of cameras sold this year projected to be digital models, consumers have more options than ever about where, or even if, to print their snapshots.

One result is an all-out war among retailers, printer manufacturers and online companies like Snapfish for a piece of the $8.2 billion pie that the Photo Marketing Association International said consumers spent on printing photos last year. Each entity is trying to bill its services as the cheapest, easiest and, most important, the highest quality.

Until recently, digital-camera owners favored printing their own photos at home. About 90 percent said they printed their own photos, according to surveys by InfoTrends/CAP Ventures, a market researcher in Weymouth, Mass. But Kerry Flatley, a consultant with InfoTrends, said the share of those printing at retailers grew rapidly in the last two years--37 percent in 2004, up from 14 percent the year before.

"More retailers have the equipment, so now they're advertising," Flatley said. There are now 75,000 photo kiosks in the United States, she said, and that number is expected to increase to 121,000 by 2008.

What's more, she said, early adopters of digital cameras were mostly consumers adept at using technology who were often content to print at home. Now that the cameras have become mass-market gear, new owners are more likely to want ease and convenience.

Price is also a big factor. In recent months, retailers like Wal-Mart and Costco have cut their prices for digital prints. A standard 4-by-6-inch print from a digital camera currently costs 19 cents at Wal-Mart, 17 cents at Costco and 15 cents at Sam's Club, the warehouse club of Wal-Mart. By the end of this month, Costco plans to finish rolling out a service that allows its members to upload images from their computers to Costco's Web site and then pick up the prints at the store within the hour.

At the same time, printer manufacturers like HP are trying to

combat the perception that home printing is expensive and time-consuming.

HP sells packets of ink and photo paper that make the cost of 4-by-6-inch prints as low as 24 cents (not including the cost of the printer, of course). While Larry Lesley, a senior vice president at the company, conceded that the price was higher than some retailers charge, he said the "small incremental difference for the convenience, choice and control you get in the home is well worth it" for many customers, who sometimes need to print photos immediately. To get that speed before the arrival of digital cameras, he noted, people used to pay $1 apiece for Polaroid prints.

The price advantage that retailers hold over printing at home often disappears when it comes to larger prints, said Lowrie Beacham of Durham, N.C. He produces 5-by-7-inch and 8-by-10-inch prints on his HP printer because "the stores never advertise those prices in large print on their advertisements like they do the prices for 4-by-6." A 5-by-7 at Costco, for instance, costs 69 cents; it's $1.99 for 8-by-10.

But for people like Beacham who like to print at home, it's more than just about price. Bill Brown of Arlington, Va., said he liked to play around with his images, mainly to correct the color by adjusting brightness and contrast in Photoshop. "When I show my photos to co-workers, they can't believe that I printed them on a creaky desktop inkjet printer that I paid $120 for," Brown said.

Indeed, by printing at home, Lesley of HP said customers could exercise their creative juices by using software to stitch together panoramic shots, make a video or add music. Next for the company is easing the transfer of photos from camera cell phones.

"There is a sense of pride of creation about printing at home," Lesley said.

Beacham and Brown agree. Brown prints his own photo Christmas cards at home "although I know it costs me a fortune, because I like the challenge." Beacham said he was not creative, "so printing at home is my one chance to be."

Still, he is not totally wedded to home printing. When he wants to print a stack of 4-by-6 photos, he sends them to the online photo site Shutterfly, which charges 29 cents--or 19 cents prepaid--and mails them to him in a day or two.

Another online photo site, Snapfish, owned by HP, recently announced that it was lowering the price for printing a 4-by-6 digital photo to 12 cents (or 10 cents for prepaid plans).

Digital photos, of course, never have to see paper to be shared, or even tossed out. Beacham notes that he prints only about one of every 20 pictures he takes.

He is not alone. About 80 percent of digital pictures taken are never developed, Lesley of HP said. The overall number of prints made at home and in stores last year fell 4.5 percent to 27.4 billion, according to a survey by the Photo Marketing Association International.

So no matter how easy or cheap it is to print digital photos, some people seem content collecting many of their photos virtually.

"A hard drive and CDs take up less space than shoeboxes and photo albums," Beacham said.