I hate to bring up the “R” word but you can’t help but be bombarded with the impression the media is fostering out there. While there’s no doubt that the so-called “housing crisis” has caused much of the furor, along with record high oil prices, and the devaluation of the dollar, and the politics and polices that make some of this inevitable, there’s also a good bit of panic reporting going on. I don’t try to keep my head in the sand, but having gone through this before I can attest to the fact that this is as much a state of mind as it is a reality. The last time the “R” word raised its ugly head was the early nineties. If you look at some of the root causes of that recession they might seem familiar: worry about inflation; the S&L crisis (also known as a credit crunch); and the Gulf War and its effects on consumer confidence (read: oil prices).Oh, and another Bush in the White House.
At the time I worked on a competitor of this august journal and we splashed the pages with strategies from various leading figures in the industry about how we could get through this without excessive pain. One of the chief problems facing the industry then was the fact that folks were cutting back on both hardware and D&P (developing and printing, for those unfamiliar with the analog cash cow of the time), a double edged sword that hurt activity across the board. Early on some industry types boldly predicted that photography was “recession proof” and that people would continue to take pictures and buy cameras. They did, in fact, though there were a number of casualties in the process. And there was no question that everyone shared the burden and hardships of the times.
But we were working in a very different industry then. For one, there were many more photo specialty dealers, making the distribution pattern of goods and services much more dispersed than today. True, some shops closed, but that was a localized phenomenon, and in many cases they were picked up by other dealers who made them drops or satellite stores. There were also a number of finishing labs that continually vied for dealer and the vast mail order business. We all know what happened to that end of the trade. And 35mm rode high among many picture takers, a run that was disrupted somewhat by the eight year intrusion of APS, introduced in 1996, already in the heady boom times, and the then venerable 110 cameras, which first appeared in the seventies. In short, the industry was mature, finishing and film drove lots of sales and there was no real option aside from “traditional” photography for those seeking to capture the precious moments in their lives. So whatever happened to that somewhat monolithic structure affected everyone.
I don’t have to spell out the vast shift in both technology and goods distribution to consumers that has taken place in the years since the last “R” state of mind. In fact, the business is driven by technological advances that keep on coming, and today’s “mature” is tomorrow’s obsolescence. If something becomes “monolithic” it is a brief, and moving target.
Options Do Abound
What we do have is a growing and ever more sophisticated infrastructure that does not rely on people getting in their cars to drop off their film or buy their camera and accessories. We have shopping “bots” that let consumers do instant pricing comparisons and online advice about everything having to do with picture taking, from online courses to 15,000 word essays about the latest point and shoot digicam that won’t be on the shelves in three months time. And the growth of online “photofinishing” keeps going up, not down, as folks become more comfortable with the process and finishers get better at fulfilling orders. And digital allows for so many more options of what consumers can do with their images, including the old standbys like greeting cards to creating the latest hot items like cloth bound books of their last trip to Yosemite.
The industries that will suffer most from what’s occurring are those that have not foreseen the changes in demand and technology, like makers of gas guzzler cars. I am not sure if it was obstinacy, ignorance or being totally opaque that drove American car makers to their present dismal state. But not paying attention to events and economics will always lead to disruption, especially when the promise of something better is offered or right over the horizon. Imagine trying to sell an SUV that gets 16 miles per gallon these days, and you can understand why this state of affairs will be devastating to some sectors of our economy.
I am not going to say that the photo industry is recession proof, despite its cutting edge technology and the solid growth in infrastructure investment. Much will depend on events in the coming months and how deep this recession impression spreads. It will also depend on how the mass consumer stores view photography and its contribution to their bottom line. One of the cautionary notes about the centralization of distribution of photo goods and services is the habit of some of these stores to flee those items that do not pay dividends, and they can drop them quicker than you can say “smile.” The problem is that there is no safety net for the potential fallout, given the cargo container cost savings and mentality of many large photo manufacturers. The only balance might be that Internet sales operations could take up the slack, but buying a $1,200 DSLR without wrapping hands around the shutter release is something quite a few consumers are loath to do.
Slow & Steady
Much of this tale will be told in the fourth quarter results and how inflation spreads. In the last few years, and if I remember correctly during the early nineties, manufacturers took a hit and in large part swallowed the bitter pill of lower profitability, just to keep their lines running. There’s no question that European goods will show the biggest price jumps after the first of the year or when inventories start dropping. Right now the yen has stayed on par, so we might not see much in the way of hard goods price jumps from those shores. However, what the corporate folks call COGS (cost of good and services) will inevitably rise. That might start creating either a profit squeeze or inevitable price increases that will make some consumers pause in getting the latest, greatest camera or lens, as they seem to be doing now, and have been doing in the past years. Some photographers are on their third or fourth digital camera, with repeat buyers and step-ups being the engine that drives this market. But times like these give such buyers pause, even those who might not be feeling the pinch. Their caution might spell hardship and delay the ongoing push for even more technological changes.
The photo industry has always showed resilience in the face of such matters. The fact is that photography is part of the fabric of life, something that we take for granted as part of how we relate to one another, retain precious memories and bind together families and friends. But digital allows for some “delay of satisfaction”, if you will, in that images captured today can reside on cards and drives for quite a while before people see the need to print them. And making that image captured on a two-year-old 6 megapixel camera rather than the latest 10 megapixel wonder is not a necessity of life.
The challenge we all may face is understanding what may come, and unlike the American car industry’s ostrich-like behavior, understand where the potential for growth might be. In large part that means keeping to our core values. It could be that we need to reinvigorate the message that photography is an important part of life, and that today’s photo industry is better at helping keep those memories, in more ways, than any time in the past. That combination—the perception of innovation and real benefits from the changes made and to come, tied to the siren call of photography as both memory keeper and creative outlet—is pretty hard to beat. yy
