Views from Phanfare CEO and Co-founder Andrew Erlichson

Link Why do we take photos and videos

David Pogue of the NY times tackled a subject near and dear to my heart recently: Why do we shoot photos and videos. I come out approximately where he did. That you do it for yourself, and the hope that maybe somebody might be interested in seeing the media in the future.

And it is because that inevitably the media is most valuable to the shooter that it makes sense that if you want to preserve it, you will have to pay. Personal photos and videos have a small audience, and hence advertising can not monetize their storage. To make money on advertising, people need to look at the media. If the media is only interesting to the author and a small group of friends and family, it has little advertising value.

This is something that Shutterfly, Snapfish and Kodak Easyshare Gallery know all too well. They store your media for free, depending on the purchase of prints and gifts to amortize the cost of storage of that media for perpetuity. But since most purchases of prints and gifts come right after the shooting, in the long term, they are left with this huge liability of photos and videos with no clear revenue stream associated with them.

Snapfish and Kodak both impose the rule that you must make at least one purchase per year for them to continue to store your stuff. I know the economics of this industry well enough to tell you that one purchase won’t pay for the average users’s lifetime of photos and videos.

I predict that longterm, the big 3 “print to share” sites will all impose fees on users or delete all their stuff; that is if they don’t go out of business all together. Long term, it is likely that prints and gifts will be a declining business with the electronic display and presentation of media being the area of greater interest. Hence, their primary business will be cannibalized by technology; fairly ironic given that those companies were founded to capitalize on the explosion of digital photography, which replaced analog photography.

  • Scott B

    Hi Andrew…
    Interesting theory here, particularly where you say “Personal photos and videos have a small audience, and hence advertising can not monetize their storage.” Doesn’t the popularity of flickr and its reach suggest the opposite? After all, there is a lot of traffic for some of the pictures — many which weren’t done by professionals. Obviously a huge portion of flickr gets very little traffic, as you suggest, but the nature of their product has allowed a huge community of photo sharing which does prompt a lot of traffic (at least more traffic than the same photos would garner on snapfish or kodak).

    I think your theory is true to an extent, but I think that flickr, and to some degree, facebook, have shown that internet social networking tools can increase the amount of traffic a given set of pictures can generate.

  • Brad

    But you have to store all of the images that people put up in order to get the .01% that gets any traffic at all. Most of it sits there just taking up storage space. Flickr does a pretty good job of forcing people to pay the $25 annual fee since the severely limited free account is virtually useless.

  • Andrew Erlichson

    Exactly right. You have to store all the stuff that gets very little traffic. It also depends on whether you store high resolution originals. And Phanfare is not designed to surface popular media and hence does not attract those who desire a big audience.

    But most tellingly, even flickr charges for storage because their reach can’t pay to store the bytes.

    This all gets better over time as storage costs drop, but it will be a long time before ads can pay to keep all the photos and videos you take throughout your life.

  • Darryl

    Also, as far as I know, Facebook doesn't store our original full-sized images, definitely doesn't let you download them back down, and strips the EXIF info. So they're storing much less data than a Phanfare, SmugMug or Flickr, with their multiple renditions of every photo (and for Phanfare/SmugMug, video).

    Consider too the precipitous drop in advertising rates (and therefore revenue) due to the recent economic downturn. While advertisers may stop spending on website advertising that has arguably negligible returns, will customers really decide to stop subscribing to a service that has all of their photos and videos safely backed up? I'm thinking no.

  • Darryl

    Also, as far as I know, Facebook doesn't store our original full-sized images, definitely doesn't let you download them back down, and strips the EXIF info. So they're storing much less data than a Phanfare, SmugMug or Flickr, with their multiple renditions of every photo (and for Phanfare/SmugMug, video).

    Consider too the precipitous drop in advertising rates (and therefore revenue) due to the recent economic downturn. While advertisers may stop spending on website advertising that has arguably negligible returns, will customers really decide to stop subscribing to a service that has all of their photos and videos safely backed up? I'm thinking no.

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