Imaging Industry Research with Rise Above Research

Gary Pageau of the Dead Pixels Society talks with the co-founders of the new imaging industry marketing research company, Rise Above Research. Ed Lee, founder and director, has more than 20 years of experience covering the consumer and professional digital photography and imaging markets as an industry analyst and market researcher.  David Haueter has 20 years of experience as an industry analyst, with stints at Gartner and Keypoint Intelligence -InfoTrends, primarily covering the photo output markets. 

In this interview, Lee and Haueter discuss the changes driving imaging device markets and photo output and gifting. 

Rise Above Research offers annual syndicated advisory services as well as custom consulting services that help clients understand market trends, identify opportunities, and develop strategies to grow their businesses.

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Transcript

Gary Pageau  0:13  
We're joined today by Ed Lee and David Haueter of Rise Above Research the imaging industry's newest marketing research firm, and one of the few left standing if that's the case. So, welcome Ed and David airy. So tell us a little bit about your journey to starting up this new firm.

Ed Lee  0:42  
And now that's a great question, Gary.

Gary Pageau  0:46  
about your background and experience. I didn't expect that question. So

Ed Lee  0:52  
my my background comes with about 20 years worth of experience in the market research industry, working for A couple of the major Digital Imaging Research firms in the US here, and even prior to that have roots in Xerox and Kodak on the product marketing side of things there.

Gary Pageau  1:15  
Okay. And David, in addition to being a sports car enthusiast, what's your background?

David Haueter  1:22  
Similar to Ed I, I've been a industry analyst for 20 years, most recently with keypoint intelligence before at nice started up and also Gardner before that. And I also have a background at a sharp electronics and Xerox, so kind of started on the office equipment side but then kind of moved into the photography side.

Gary Pageau  1:45  
So tell me a little bit about rise above research, what is the market segments that it's going to be serving?

Ed Lee  1:54  
The company is a market research and consulting company and we're focusing In on the digital imaging digital photography space, the areas that we do cover, we're looking at Digital capture in terms of photography, mobile imaging, as well as, you know, areas around what consumer behaviors are, as well as professional photographers. In. We are studying what's happening in the new imaging applications like augmented reality, virtual reality, as well as artificial intelligence and how that applies to imaging.

Gary Pageau  2:34  
Great. And, David, you're more on the output side of the business. Is that correct?

David Haueter  2:38  
We're going to offer two we're offering two services. One is on photo printing and one is on photo merchandise. So the photo printing as you can imagine, covers traditional photo prints like four by six, five by seven, etc. And on the merchandise side, where were looking at everything but really kind of focusing on books. cards, calendars and wall decor, but it's ever changing. And the good thing about Ed and I with just with just us is that we can be really flexible and you know, change direction pretty quickly if the market requires that.

Gary Pageau  3:16  
So, Ed, sounds to me like on the capture side, you're really talking about a space that is beyond the traditional DSLR, compact camera, camcorder, smartphone space. Can you tell us a little bit about some of the things you're discovering there?

Ed Lee  3:34  
Yeah, I mean, if we go back and look at the mic is photography and imaging to begin with, you know, it started with film, progressed to digital cameras, and moved on to the mobile imaging there. And the question now comes up in terms of where does the industry go from here? No mobile imaging is the king right now. And probably 90% of images that are being captured. Today around the world or on a mobile phone, smartphone, but looking forward, I don't see that as the ultimate next step for imaging. The question will be, you know, what is next behind mobile phones there? And I see something in the area of a wearable type of imaging device, headset or something to that wear eyeglasses,

Gary Pageau  4:25  
Snap Spectacles and things like that.

Ed Lee  4:27  
Yeah, yeah. And where now it's becoming a distant, more integral part of your body there. And

Gary Pageau  4:37  
so that's kind of interesting, because people have tried that there have been a few startups over the years who have tried that sort of thing. I think canons got one now they're trying to crowdsource or something. What What is the appeal of something like that?

Ed Lee  4:52  
One of the, I guess, one of the detriments with regards to smartphones is that it's, it's in your pocket. Whenever you want to use it. You got to pull it out. You got it. Look at it. And now your focus is not on what's around you, your focus is on that little screen that's in front of you. So if you're able to divorce yourself from that smartphone screen and have those images and that information in front of your eyes without having to take your eyes off of what else is around you, nice dad, as a as a next step for how do you how do you enhance the experience around doing with, you know, how does imaging help you?

Gary Pageau  5:32  
But obviously, there's going to be privacy concerns, there's going to be you know, a lot of technology that needs to come into play. So looking forward to a lot of exciting developments in that area, I'm sure coming up.

Ed Lee  5:43  
Absolutely. Yeah, privacy is going to be a big issue. And you know, those are things that the industry is going to have to address and deal with as the products and technologies and services roll out.

Gary Pageau  5:56  
And as exciting as all that new technology is really bread and butter of the industry, the profit center of the industry has traditionally been the services side, which is what you're going to focus on. Right, David? So what trends are you seeing in the output side of the business?

David Haueter  6:16  
Well, a lot of it is already happened to me where we've seen a big transition to mobile over the last several years. I think that's still happening. I think there's still people that don't really know exactly how to print from their phone, even though it's been you know, the, the ability to do that to do that. It's been around for such a long time. But also, you know, we're really going to be taking a look at how our current situation is affecting output. You know, there's a couple sides to it, there's a positive side where you think, you know, people have more time on their hands, they're home more, they can finally finish or start, you know, photobook project. For instance. We're hearing some good things from within the industry that that that is actually happening. Another thing we're also keeping an eye on is how the whole retail versus online mix is going to be impacted by COVID-19. With, for instance, you know, people may not want to go into a retail store as much as they may not want to touch a screen. If you walk up to a kiosk at a photo center, and it's got fingerprints all over it, you know, you're really gonna want to touch that. So it's gonna be interesting to see how that all plays out. And we're gonna keep a close eye on that.

Gary Pageau  7:34  
Yeah, that's one of the kind of points of data that we've been hearing about is, you know, with retail being basically shut down due to COVID-19. There's been a strong movement, especially among the independent retailers, mom and pops the labs to going online. They've basically been forced to May they they were dragging their feet, you know, and then their key spender kind of kicks him in the rear and moves them on. Line also to kind of embrace the idea that they don't have to produce everything themselves right now, sort of the point of a retail lab is, hey, we do everything here. But now they're connecting to some of the wholesale services, which is, again, growing their portfolio. So it's kind of kicked people in the rear, like I said before, to kind of push them over the hump. You know, the emergency has kind of created this sort of impetus.

Ed Lee  8:29  
And that's just not in the photo industry. It's across all kinds of retail businesses now.

Gary Pageau  8:36  
So add, one of the things of what's happening in the device space that there seems to be a lot of hand wringing about is the decline in traditional cameras, right. We saw with compact cameras being basically eaten alive by smartphones. And in recent years, there's been a lot of discussion about DSLRs and mirrorless. Being cannibalized by smartphones not sure if that's the case. How much is the recent decline in sales due to smartphones? Or is it due to things like COVID-19? where, you know, people maybe are watching their budgets a little more.

Ed Lee  9:17  
Yeah, declining this year really has been affected by the COVID virus there. I think, already for 2020, we were expecting that the decline of shipments was going to continue, but it wasn't going to be as dramatic. As we're seeing right now. We were forecasting. Overall, we're forecasting now overall about a 28% decline in in shipments of cameras in North America, with COVID taken into account, so we're hoping that as things open up again, that people are going to be feeling more comfortable going out and taking their cameras with them and taking photos and getting ready for the holiday season. If COVID continues into the holiday season, you could see, you know, a significant decline occurring still. But right now, as things are still rolling out, we're expecting and hoping that q4 will still be, you know, still be a good time of the year for the vendors and the retailers.

Gary Pageau  10:31  
Well, it seems to me that with, you know, the conventional wisdom was always, you know, you don't really need a DSLR anymore, unless you're doing a very specialized thing. Like you're maybe shooting kids sports, or you're really into portraiture or street photography, or something like that, or you're going on trips, right trips, vacations, right? That trip to Italy that you've always wanted to go on has been the big driver, and now with travel being printed shut down for looks at least like, you know, coming up to the year. How much you think travel is going to be impacting either camera purchases, which I think is gonna be significant also output.

Ed Lee  11:15  
I think the restriction on travel is actually going to have a bigger effect on the number of photos that are actually taken versus the devices that are sold there. Okay. I did an exercise, just recently trying to estimate how many photos were lost as a result of the 2020 Tokyo Olympics being postponed a year. Yeah. And the number I came up with and I was just trying to get to an order of magnitude was about a billion photos aren't going to be taken this year, because of one event was being postponed.

Gary Pageau  11:53  
Wow, that's crazy. And for comparison purposes, how many How many photos do you think are captured? You've recently put out a statement on that, right? Per Yeah.

Ed Lee  12:06  
Last year, we estimated about 1.3 trillion photos were captured globally. And because again, the effects of COVID we're looking at about a 15% decline in photo capture, and projecting about a 1.1 trillion photo figure for 2020.

Gary Pageau  12:27  
And then the Oh, I'm sorry, go ahead.

Ed Lee  12:29  
I was gonna say, and even you know, even though COVID is keeping people inside, they're still taking pictures. They're taking pictures of different things, right activities that are happening in the house of Mayor house. There's, you know, immediate surroundings and things like that.

Gary Pageau  12:44  
And obviously, with at the bare minimum, 1 billion fewer pictures taken, you know, probably closer to a quarter you know, I don't know, probably billions and billions of pictures not being taken as pure printing opportunities. Are you seeing that day But

David Haueter  13:02  
yeah, definitely, you know, just with like you said fewer vacations, fewer events to go to the places that people would typically take pictures and then print down. There's theory thing theory that was happening for sure. We are hoping that, you know, people may be doing staycations you know, things like that, where they're doing things around the house more and hopefully, they're still taking pictures and chronicling those events, and they'll still want to, you know, make Princeton you know, do a photo book of the year or photo album, something like that.

Gary Pageau  13:37  
Also home decor. I mean, I've been hearing that that's a trend with this new cocooning that's happening, people are looking at their walls thinking, well, if I can't go to vacation, I can always put one on my wall. So

David Haueter  13:50  
yeah, and there is, like I said before, there is that opportunity where people will have more time on their hands and they maybe want to finish projects that they maybe never got around to and One thing we've seen over the years is that people tend to know that they should print photos and they'd like to, but they just don't have time to do it and go through all their photos. So maybe they have the time now. The whole unemployment thing could come into play to where, you know, people may be more careful with their money about what they spend it on, and like, um, you know, I can look at photos on my phone, I'm not gonna bother making a $40 photo book. But on the other hand, product like a photo book makes a very meaningful gift that probably is just as meaningful as other more expensive gifts. So there is opportunity for someone to buy a photo book as a gift instead of something else that you know, might be more expensive. So there's kind of pluses and minuses on both sides of it right now.

Gary Pageau  14:47  
Sure. Sure. I get that.

Ed Lee  14:48  
Yeah. And, and Gary, one of one of the themes that we've been promoting recently here is that there's a lot of photos that are sitting stuck on drives in the cloud, on cameras on phones that are worth going back and reviewing and seeing if there are any special photos that deserve to be printed or made in photo product. We put out an infographic that shows that in the 2000 10s, you know, globally 8.6 trillion photos are captured in that decade. Right? Think about that a decade is a long time. And in which case, you know, you look at a somebody who's 20 years old, that's half their lifetime. And somebody even 30 years old, that's a third of their lifetime. He looked back 10 years ago, what were you doing? You know, there's in that 10 year span, there's got to be some photos today, right are special memories that maybe weren't even special memories at that time, but now You look back now and you're going, Wow, you know, that, you know, baseball game where my, my son got that home run there and back then it was a cool, you know, but now it's even more special since he's, you know, in his 20s or something like that. Right.

Gary Pageau  16:15  
Well, also, I think there's, you've touched on an interesting point because, you know, in those past years, that past decade, for example, there may not even have been some of those print products even available. Right? I mean, look at you know, a few 1015 years ago, you didn't really have the opportunity to make a metal print as affordably and as high quality as you do. No, I mean, I, I was going through some my old Canvas prints that I made, you know, I think in the early 2000s, I think they were like Shutterfly. They sent me a code to do some samples and I made some, and it was horrible. Part of it was the printing technology in the thousands. There just was just Not what it is today. Right? And now when you look at it, it's like maybe it's time to go back and revisit some of those chairs pictures that maybe you did have printed. Yeah, we can print them better the media is has greater longevity, greater permanence. Definitely better color than it ever did. So, you know, that's a message I think the industry could revisit.

Ed Lee  17:23  
Yeah, so the message being, you know, don't just focus on trying to get people to print what they just took photos of just recently, right? Have them think about, you know, what are their important photos from even the past decade, and go back and find those photos, print a few of those photos and save those photos.

Gary Pageau  17:44  
I think one of the things that the industry kind of rustles with is monetization models, right? Because the traditional industry has always been built around this model of, you know, capture, store output, sort of In a model, right, and we're gonna make money on the output side. And then as, as other soft display technologies have come into play, you know, websites and now apps, social media networks, they've really found ways to monetize imaging without that output step. And I think the traditional industry has really been left out of that discussion completely. Right. I mean, I mean, if you think about it, you know, Instagram is probably the most used photo app right now. Maybe you guys have better technology or better insight into that, then I would say that's probably the number one one out there. Yeah, Snapchat is probably here, too. And neither one of those is a Model Driven by anything traditional. What do you think the place is in the quote unquote, traditional industry, whatever it is, in that future of that space, where it seems all the growth is because what I'm seeing is There isn't a lot of VC money coming flying into a traditional output model, they're gonna dump money into a some weird sharing app, or, you know, something like that.

Ed Lee  19:13  
Yeah, I think the VCs are looking for a quick way in and a quick way out and turn over their money and in multiples there. And you're not going to find that, unfortunately, in the traditional photo printing space at this point, which is a fairly mature industry, but I also think that the 10 or 20 years down the road when you start trying to find some of those instagram snapchat photos. Good luck. Yeah, at least if you print them out, you will have the hardcopy version of them whether or not you can find them digital file. Regardless.

David Haueter  19:51  
It's not really going to change unless consumer attitudes change. That's the hard part is getting people to understand The value of print, you know, the intangible aspect of it, and that we've been saying this for a decade or two is that, you know, if you want to go look for pictures from your 2000 vacation, it's a lot easier to find them on a photo book or on a photo album on your shelf than to try to go back and find them on your computer or your your phone somewhere. But I wish the industry would do a better job of educating people on that they haven't really done much at all on that line. The only one that I've seen that's actually done a pretty good job of it as mpex they were sending out emails, kind of, you know, encouraging people to print photos and how it's so nice to hold a printed photo in your hand or a product in your hand. And I'm kind of surprised that more of the bigger vendors haven't really done anything on that line at all. Damn, really pushed it at all.

Gary Pageau  20:50  
No, it's interesting. You said because like, you know, I mean, I'm sure you know, like you I've got a Shutterfly account going back 20 some years And you know, they've now send me an email almost every day, hey, these are your pictures from 15 years ago, here, but they don't take the next step of like, pre creating a book for me, or something like that. I mean, Google tried a little bit about that, hey, we created a book for you, but they just recently cancelled that, that type of service. So I just, I'm interested at in your view, and like where AI could take this to the next level, maybe that's the next step that needs to take place is some sort of intelligent assistance to say, hey, these are great pictures. And here's a story we've created for you out of your this important moment.

Ed Lee  21:43  
Right? Yeah, now AI is a tool and a tool, you know, meant to be employed and use there and I think AI is purpose and or at least one of its objective is to analyze photos and categorize them in many ways. help you organize some of your memories there. And from there, then you can start moving to the next step of saying, you know what's important. One of the things that we've talked about in the past, especially when it comes to a photo print now, four by six photo print is, you know, how do you how do you increase the value of a four by six photo grant, it's really hard because it's only a piece of paper, right? I think that people pay more for a piece of paper, it's difficult. But ultimately, we came down to the conclusion that in order to increase the value of the print, you have to make it more relevant. Right? So you have to make more relevant to that person's life at that time or the person's life today. And how do you make it more relevant, you know, and you add information, you extract information from the the print or the file there

Gary Pageau  22:54  
while maintaining privacy, right, because that's the other side of it is I mean, AI is great and you know, But there's also some concerns there, right of how creepy can you get? Right? Right? Right? Yeah, go ahead.

Ed Lee  23:10  
Losing control of the AI headset, it comes down to if it's a personal AI or if it's a, you know, be a cloud AI. Those are Yeah, definitely two things to think about there. But you know, in the instance of a photo Granny, it'd be great if you pick up a four by six prints, scan it, and come up and tell you you know, additional information about it. And I would love it if it would tell me hey, here's the file name, the digital file name of this photo that you have in front of you. Now you have these have a chance of finding that right but even something as simple you know, as metadata for the time and date location of where something was taken, that adds relevance to, you know, the picture there and helps to create a story I think more and more you hear a lot about storytelling and the fact that people want to tell stories. And that's probably one of the reasons why you'd see a big increase in video capture and be logging and things like that and are interested in telling stories. And you can certainly do that with your photos. It's just a matter of how do you get them organized and put that story together.

Gary Pageau  24:26  
You mentioned something before I want to touch on before we kind of move to wrap this up. I'm vlogging, the V logging or vlogging or however you want to phrase that, it seems to me like that's sort of something that the camera companies have tried to make a feature of their newer cameras, right they flip out screens and it seems like Sony and Panasonic in particular have come out with vlogging specific cameras. They have better audio capability. They have wider lenses so you can when you're doing the vlog thing. Yeah, Here I'm showing my age, the vlog thing these kids today and they're vlogging is what is your insight into that market? Is There Really? Are there really that many people vlogging? Who Who that they can't just use their iPhone or their Samsung Galaxy for that?

Ed Lee  25:25  
Yeah, that that's a big question in terms of how many people are out there blogging and I have yet to find that answer. I don't think anybody actually has the answer to that question. What you do have is you have a lot of aspiring bloggers. So what they're seeing is the influencers and the people that they follow, and they want to be like them. So in that instance, they are going out they are trying to act like them look like them by the same equipment that they're using. And yes, the the smartphones are perfectly acceptable. for logging there, but if you are looking for a higher level of quality where you can, in many cases, you know, swap out the lens and you can go from wide angle to telephoto or something like that depending on what your your messages, then you still see a lot of the high end point two cameras as well as the chin changeable lens cameras being used for vlogging.

Gary Pageau  26:29  
It just seems to me like the imaging literacy of today's Gen Z and on top is amazing. Just the ability that that generation has to communicate visually, either through eye beams or through technology. It's just fascinating. It's just it's an interesting cultural cultural point. I mean, I remember when I used to have to explain to people what a pixel was.

Ed Lee  26:59  
Well, what what you're describing there, though, Gary is the fact that these, like I say, Gen Gen Z. Gen Xers they grew up with digital imaging. Right? And that's just part of, you know, their experience growing up. They don't know world. Before digital imaging, they're right. And actually, there's a quote that I referred to that actually comes from snap there, I think is really appropriate there. And they talk about where, where the quote goes, the camera is the new keyboard, the new language and how you communicate with each other and access the digital world. And I think in many cases, yeah, you're now talking about the image capture as a form of communication versus a way just to preserve memories.

Gary Pageau  27:49  
You know, it's interesting you said because I remember, gosh, it was in the early 90s. I went to a conference that I think the the The National Press Association was putting on about photojournalism and digital was actually just starting to come into play. And there were so much discussion there about what you could and couldn't do with a photograph digitally in a journalism context, right? Like, you know, could you even edit a picture in a way that you couldn't do in a conventional darkroom? Right. If you couldn't burn and dodge and crop, you basically shouldn't do it for a news article, because the the belief was, you know, people will lose faith and reality if they could look at a news picture. And it's, and it's they can't believe it actually happened, that it's not actually news that it had been manipulated sometimes, as forward now 20 years later. And you've got manipulation on a wide scale. You can't even believe what anybody's Instagram feed jobs.

Ed Lee  28:57  
Yeah, right. Right. Oh, well, bad. Back in the days of film, I mean, literally what you saw essentially, is what you got. Okay, when it came to the film capture in the print, and looking forward to digital today, what you see today is what the digital computational photography algorithm wanted you to get, right? Not a lot of control over that at this point in time there. So it doesn't even have to reflect reality anymore.

David Haueter  29:28  
Right? On the positive side, you know, there could be some opportunity there for things like wall decor, like a metal print, as we talked about, you know, if someone looks at a photo they took in it's you know, so so as they took it, but then they add some cool filters to it and all sudden it's become this beautiful photo that they want to make a product out of.

Gary Pageau  29:47  
Oh, exactly. And that's I'm not saying it's, I'm not criticizing it as a bad thing. I'm just, I'm just observing the change in the market and that you have people who realize that they can improve a picture with software and Get get what they want out of that picture. Maybe it was not a great picture. And but they realize it has potential to be a great picture with software. And then it's now what I call wall worthy, right? It's it's worthy of being on your wall or worthy of being printed for a memory. And it doesn't necessarily have to be the exact picture as you captured it. So listen, gentlemen, we are kind of running out of time as I know, you're both very busy. Can you kind of give our readers a way to read the best ways to reach you?

Ed Lee  30:34  
Yeah, I would recommend that they go to our website. It is just RiseAboveResearch.com and check us out there. We've got a new section where we listing our press releases, our blogs, and our Twitter feeds as well.

David Haueter  30:52  
There's also contact information on their website as well if you want to reach out to us with a question or contact or anything.

Gary Pageau  30:59  
Well, that's great. Well, listen to And thank you very much for your time and your expertise looking forward to talking to you soon and working more with you in the future.

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