Death Throes of a Business Model

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.

One thought on “Death Throes of a Business Model

  1. As much as I would like to agree with you, printing affords experiences you simply cannot get online. Our family has a bit of a ritual where when we get together we provide copies of the last time we get together or when some took a trip others didn’t. We take turns huddling over prints, telling stories only captured by our memories for next time we dust them off.

    Harkening back to then tedious slideshows in grandpa’s den, lately I plug my powerbook into the flat panel for a different kind of in-room experience (have yet to employ a backchannel, perhaps for the best).

    All part of my family marketing effort for Flickr. But I can’t get grandma on board until they offer printing too — a commodity service they could easily do through partnership, were supposed to by February and since then we haven’t heard a yoodle.

    Sure I can email a photo from my cameraphone to a Flickr photostream, but to really add value I need to send it on a postcard to grandma.

    The post-Web networks the world into it.