If the announcement today that Snapfish will be dramatically lowering prices on prints isn’t a harbinger of a business model’s doom, I don’t know what is.
Snapfish, Ofoto, and Shutterfly have been playing a sucker’s game, trying to generate revenue from prints of digital images. The not-so-secret secret — most people don’t want prints of most images. But they were so locked into a model of “paper”, of “rolls of film,” — it’s getting about as antiquated as typewriter ribbons.
On a sales call with a potential client, I tried to impress upon her the need to fundamentally reconsider how her company approaches what they do, and I used the analogy of Snapfish/Ofoto/Shutterfly and Flickr. The former were stuck in pre-Web, pre-networked-world ways of thinking about people, things, and relationships. The latter is built, ground-up, *of* the Web, and recognizes that the “value-add” (as business types like to call) lies not in the production of things (which inevitably get commoditized and provide negligible margins), but in the provision of services that provide an experience you simply can’t get anywhere else.