I find it almost impossible to take good photos of my children so I thought I would leave it to the professionals and went to see an independent photographer for the first time. I visited a photographer in North London and it was not an experience I would care to repeat anytime soon; the studio was dirty, the photos were grossly overpriced and the whole process was slow and manual.
I came away thinking that it is high time that photographers evolved their business model to provide better value and service for the customer while at the same time improving their long-term profitability.
As ever when I analyse a business model I am looking for Blue Oceans by analysing value curves and finding gaps in the current offerings.
Developing a new value curve
A high level summary of going to a photographer:
- Time consuming. Not only do you have to take time to visit the studio for the photo shoot you have to sit through the viewing after the photos have been edited.
- Expensive. Paying £900 for a small canvas that I can purchase independently for £50 seems like a complete rip-off.
- Limited. As digital rights are not usually provided I am forced to chose only the products the photographer offers.
To develop a blue ocean and a new value curve I ask myself the four questions on the graphic on the right as a way to stimulate new ideas:
- Level of service – clean, efficient and professional but not flashy.
- Range of products – fewer in-house products with the option to utilise 3rd party services to extend product offering.
- Level of pricing – cheaper, more affordable pricing while still at high profit levels.
- Speed of getting your photos – photos provided within a few hours.
- Cost of the photo shoot – no charge for the photo session.
- Digital access rights – every photo provided to the customer via secure website.
High level value proposition of the new photography model
Using the ideas from the four questions above I can now articulate the proposition for the new blue ocean for photography.
The studios would be clean, crisp and modern but not flashy, this is not a premium offering. Studios would be located in out of town retail outlets in order to negate the high rents associated with high street locations. The reason for this is that going to see a photographer is not an impulse purchase so having clients travel to the studio will not reduce the attractiveness of the offering.
Clients would pay £300 for the photoshoot which would give them full access to the digital rights for all the un-edited photos. This is a big shift from the current model that does not provide digital rights. The customer can then use their photos in whatever way they see fit.
All the photos would be uploaded to a secure website immediately after the photoshoot, so that subject to upload speeds, the photos would be ready for the customer to download when they return home. The photos could be shared with friends of family allowing the photographers brand to be shared virally.
Value-added services would also be provided like existing photographers such as photo editing, printing, canvasses etc. These value-added services would be at lower profit margins that existing photographers in order to encourage a larger number of sales. However third party services would allow customers to extend the use of their photos, for example to create personalised merchandise, websites, specialised printing.
A blue ocean in photography
Using my ideas that were generated from the four questions I have roughly modelled Richard Kerber, Venture Photography and a my proposed new model in the following value curve.
Modelling Photographers On A Value Curve
High level financials
The new model changes the profit profile of photographers. Currently there is a small loss leader fee for the photoshoot and then a huge profit on a small number of customer purchases. However it is very likely that some customers will only buy one photo or some will not buy any.
In the new model there is a large profit even on the base level packages. Up-selling, of prints or other services, will increase profits further.
Assuming that a photographer can see ten clients per day:
Old model = £30 photo shoot fee x 10 = £300
New model = £300 digital rights x 10 = £3,000
Even though the margins on the value added services are higher for the old model the probability of selling them are much lower. These figures show that even with no value added services the new model is making £3,000 per day in revenue.