The Wind is Shifting in Internet Photo Space

Seems Snapfish is changing their web photo model to enlist help from 3rd party developers, product manufacturers and imaging creatives. They plan to accomplish this through a new set of APIs coupled with the promise of revenue sharing (here). Of course, Snapfish will still manage all the orders, money and sales commissions… just like Amazon et al. These hungry cottage developers, designers and mail order gift manufacturers will add significant incremental “gloss” and capability to the existing Snapfish franchise. Don’t get me wrong, this is a significant step, one that finally offers motivated and innovative 3rd parties a concrete way to participate in today’s digital photo ecosystem…and it will definitely work…for Snapfish!

Although these APIs will probably start with the Snapfish branded site only, the pressure will immediately come from SnapFish’s mass merchant partners, Walmart and Walgreens, to feed their sites and retail “print to store” networks as well (they already are set up to receive orders from SnapFish.) Interesting move, but it may confuse and potentially upset brand sensitive retail internet merchandisers. Obviously, the next step would be to enable these APIs on Snapfish custom branded photo sites like Walmart and Walgeens, but Snapfish may try to entice partners to move to a Snapfish branded, or co-branded alternative. That way they can unify Walgreens and Walmart users (and images) as well. Way back in 2005, when Snapfish took Walmart from Fuji “at any price”, I predicted this. Rather than Snapfish adding value to the retail brands, networked “pick up in 1 hour” retailers would add value to the Snapfish brand (and by the way, consumables volume to HP.) It will be interesting to see how they play this with partners and whether their retailers remain totally focused on their own internet brand identities. However, in the final analysis, retailer fulfillment networks need production and sales volume and if Snapfish/HP becomes the “only game in town,” they really will have no choice.

But, it isn’t really that simple, and Snapfish will never be the only game in town! Social networks have already won that battle and even today, control the vast majority of all photo sharing done on the web. Facebook alone, the veritable “800 pound gorilla”  in web space, is responsible for something like 65% of all on-line photo sharing!

Facebook quickly capitalized on the knowledge that consumers absolutely love to share pictures. Most users don’t really write that much and this fact has already made personal photo sharing the “killer app” on social networks. Their upload statistics are truly astounding, and even though Facebook images are generally unsuitable for other photographic uses (printing, books, gifts), their storage space has to be growing exponentially. In an overarching photo ecosystem context, Facebook’s technical implementation is flawed…which, at least theoretically, leaves them vulnerable to a competitor offering a compelling case for…”social networked photo sharing done right!”

Obviously Facebook already recognizes this, and their recent acquisition of startup DivvyShot is a clear indication that they are looking for new ways to defend and extend their overwhelming dominance in the social network photo. Watch for them to begin to leverage their web photo franchise into retail territory as well!

Finally, there is a little company in Mountain View that we need to watch as well. While I have already written about Google and Google Buzz, suffice it to say that they have a real stake in this game, and already are sharply focused on a vision for “photo sharing done right!” Not to be left out of the acquisition frenzy, Google recently snapped up PicNik, a web based photo manipulation provider.

Nobody really needs (or wants) two separate and parallel web photo ecosystems…one for soft display social network sharing and the other for production of prints, books and gifts. As far as I am concerned there are really only two horses left in this race. Facebook with 450,000,000 users, a majority of all photo sharing on the internet and literally billions of stored images but with… photo done wrong, and Google, with tons of technology and resources, billions of hits and a vision for social networked photo done right…but with no current community of social network users.

Either one gets it right and the consumer will be the clear winner!

Now as to which one that will be, it’s too soon to tell. Fixing Facebook (and there are lots of creative ways to do this without giving away Petabytes of free storage) is probably best for photo, as it would avoid presenting today’s social network users with a very difficult choice…either keep your friends or keep your photos.

…but then, I would never dream of underestimating Google either!