With photo titans like Kodak and Fujifilm struggling to hold their grip in the industry from 2009-2011, many experts predicted that the photo printing industry was done. Their reasoning made sense on paper: nobody prints pictures anymore, and those that do are the older portion of the population. So as bad as the industry is, as technology continues to develop, it’s only going to get worse. It turns out that the industry needed to adapt.
While there are several photo printing websites that have since found success, we will focus on Shutterfly in this article as they have more financial data available for us to assess. It’s our estimate that Shutterfly currently owns around 50% of the web’s photo printing business. They bought out both Kodak and Fujifilm’s photo sharing businesses, and have seen steady growth in the years since.
In 2011, a year after Kodak finalized it’s bankruptcy and in the midst of the industry’s so called demise, Shutterfly posted over $400 million in sales. A year later, in 2012, their sales numbers grew an astonishing 35% to over $640 million. Experts instantly ate their words, and best forecasts called for another 13% growth for 2013. Well, they blew that out of the water again. Last year sales grew an astonishing 22% to $784 million. The end of 2013 marked 20 straight quarters of growth, with all but one quarter showing greater than 20% growth.
Last year’s growth wasn’t limited to just total sales. The average sale price increased, total number of customers increased, and the total purchasing customers increased. They did show slightly smaller revenue numbers, but this was a year that saw the company expand it’s brand, advertising reach, and develop apps that will drive revenue for 2014.
One could certainly make the argument that this simply signals the strength of one company in the industry, but we can argue the opposite. We were able to identify over a dozen other printers that saw similar growth on a smaller scale. The largest names in the brick and mortar industry saw photo printing revenue growth as well, we’re talking about Walmart and Walgreens.
As to the argument that Shutterfly’s monster share of the market could do more harm than good, we would argue that most industries have one name that leads growth. McDonald’s owns half the fast food market, Walmart own a 25% share in the grocery market and 12% share in retail, Apple owns 41% of the smart phone market, Samsung owns 30% of the TV market… Any strong industry has one retailer that is leading the pack, and pushing growth and innovation.
It’s undeniable that the photo printing industry has seen an overall revival, and we expect that growth to continue for years to come…