The Beginning of the End for Vertically Integrated Photo Players?
The announcement this week of the sale of The Photobox Group’s UK printing facility in London to The Precision Proco Group follows the floating of Moonpig/Greetz in January 2021, both of which have reduced the count of The Photobox Group’s printing facilities.
At a time when newer, app-based resellers continue to grow in the Photo Output markets in Western Europe, this begs the question: “Are we seeing a paradigm shift in the Photo Output sector?”
In the early 2000’s, we saw the rise of vertically integrated Photo companies, with in-house printing and one or more front-end website(s) riding the dot.com wave as e-commerce proliferated, especially in northwest Europe and the Nordics.
Over recent years, these vertically integrated players have consolidated, with The Photobox Group, Albelli and Picanova in particular acquiring strategic competitors.
The last six to seven years have seen the rise of “fleet of foot”, front-end, AI focussed Photo apps, with low overheads (all printing outsourced and, often, an intermediary between them and the white label Print Service Provider (PSP) to avoid the cost of in-house production staff).
These apps play into the hands of the existing white label Photo PSPs but are also generating work for PSPs that have not been Photo category players, but that have the equipment and capability to print and distribute personalised Photo products.
The Photo apps are not necessarily offering the depth of SKUs that larger, established Photo resellers do; however their strength is this limited catalogue and commensurate, lower cost base.
It is not all bad news for the more incumbent online Photo resellers, as some of the newer apps, especially for photobooks seem to have created a new stratum in the market – small, easy to order photobooks – that is not entirely cannibalising the core of the photobook sector: the 26-page plus A4 photobook.
We have also seen the impact of these apps on the photo prints sector, particularly on-site photo printing, both minilabs and instant print kiosks. The popularity of instant print cameras in the last decade has brought some digital natives to retail photo printing. However, when they realise that they can order (often silver halide) photo prints for as little as 10 Euro cents, including delivery charges, from an app or website, they do not all return to retail. This pattern has been exacerbated by the COVID pandemic events of the last 17 months.
With more Photo orders therefore churning through existing white label Photo PSPs, the lens now turns to the vertically integrated players, who have manufacturing and front-end cost bases. Will we start to see more activity such as The Photobox Group’s sale of its UK plant? This is quite likely, as it would allow these successful printer-resellers to focus on the front-end. (There is always the caveat that when one is a customer to a white label PSP, in peak times, there are multiple orders from multiple customers for that PSP to service and, if needs be, to prioritise).
Futuresource’s new 2021 Photo Output reports (Photobooks, Photo-Merchandise and Photo Prints) covering the top-6 markets in Western Europe drill down on the recent performance and future outlook for the Photo Output sector in these changing times, with the Western Europe top-6 markets’ combined Photo Output value set to rise by 16% from 2019 to 2025, hitting €3.6 billion by 2025.
Find out more about our latest Photo Output reports available here, or get in contact with ben.thrussell@futuresource-hq.com
About the author
Jeremy joined Futuresource Consulting in 2001. He holds a degree in French from Kings College, University of London. Jeremy is a member of the Professional AV team. He focuses on Signal Distribution, Meeting Room Control, AV Managed Services, Interactive Displays, Professional Lighting and Esports.
In previous Futuresource roles, Jeremy was part of the Imaging team covering consumer camera and photo output markets and, prior to this, a member of the Home Entertainment team, tracking the global pre-recorded media manufacturing and storage media sectors. Jeremy has managed two research and analysis teams during his years with Futuresource, as well a wide variety of syndicated and custom research projects.