This industry classification includes establishments primarily engaged in developing film, making photographic prints and enlargements, or retouching photographs for businesses or for the general public.
812921 (Photo Finishing Laboratories (except One-Hour))
812922 (One-Hour Photo Finishing)
The photo finishing laboratories industry group includes establishments whose core business is developing and printing film (except for commercial motion picture film); duplicating, enlarging, or retouching photographs; developing and processing home movies; and providing transfer and other film photography services related to digital imaging, photo CD, and other forms of electronic photography. Many retail stores, discount stores, drugstores, supermarkets, camera stores, photography studios, and other businesses also offer commercial photofinishing services, whether through onsite (or "captive") labs or through commercial wholesale laboratories; such ancillary photofinishing services are the primary competition of the photofinishing laboratory businesses that fall within this category.
According to the 1997 Economic Census, the number of photofinishing laboratories showed a slow but steady decline throughout the 1990s. From 1992 to 1997, the number of labs in the United States declined by 10 percent to 7,055 establishments. Conversely, annual receipts rose steadily from $4.4 billion to $7.7 billion. Consolidation within the industry was largely attributable to a growing trend for the public to have their rolls processed by wholesale and mail order labs. As discount stores and supermarkets continued to equip themselves with minilabs, dominance by central labs was expected to disappear by the year 2000, when the number of minilabs finally would likely outnumber central labs.
In the 1990s, photofinishing laboratories relied primarily on automated equipment that reliably produced quick results. Photographic laboratories could be classified as minilab outlets, mail order laboratories, or wholesale laboratories.
Minilabs Outlets. Photofinishing laboratories featuring onsite minilabs could be independent or affiliated with photofinishing chains, and physically autonomous or situated within larger businesses. Minilab systems, which consisted of compact automated photoprocessing equipment, often required less than 1,000 square feet of floor space. Minilab outlets specialized in fast photofinishing (with photographs processed in as little as 30 minutes to an hour) and commanded relatively high photoprocessing rates. Leading minilab chains included Moto Photo; CPI Photo Finish; Fox Photo 1-Hr Labs; and Fotomat Express.
Mail Order Laboratories. Mail order laboratories, often with nationwide markets, generally provided amateur photographer customers with envelopes and instruction forms for mailing in photoprocessing orders. Mail order laboratories generally relied on repeat orders from established customer bases, often enclosing additional mailing envelopes for customer use when returning photoprocessing orders. Some mail order laboratories distributed mailing envelopes through camera stores or methods such as direct mail campaigns and newspaper inserts. Some mail order laboratories sold "prepaid" mailers through outlets such as camera stores. Mail order laboratories generally offered convenience (orders could be sent from anywhere and received at any mailing address) and relatively low prices. However, some mail order laboratories were premium operations emphasizing customized services and rigorous quality control. Photoprocessing through mail order laboratories generally took one to two weeks. Leading mail order laboratories included Clark Color Labs; Custom Quality Studio; Kodalux (formed through the merger of the former Kodak photofinishing laboratories and Fuqua Industries); Mystic Color Lab; PhotoWorks (formerly Seattle Film Works); and Skrudland Photo.
Wholesale Laboratories. Wholesale laboratories, often with nationwide markets, generally processed commercial orders and/or orders dropped off by amateur photographers at supermarkets, discount stores, drugstores, and other locations. Wholesale laboratories often operated anonymously behind the imprimatur of such retailers. Drop-off boxes provided for amateur photographers were often very simple affairs; in the early 1990s, however, IBM manufactured an automated drop box developed by Delphi Technologies, whereby membership card or credit card customers could drop in photoprocessing orders and key in instructions through computer screens. Wholesale laboratories, which processed thousands of rolls of film daily, generally offered less-expensive rates than minilab outlets and a turnaround of one day to one week. Leading wholesale photofinishing laboratories included Allprints Quality Photo Services, Dean's Photo Service, Guardian, Fuji TruColor (established in 1993 by Fuji Photo Film USA), Qualex, TruColor Photo, True Color, and United Photo.
The primary association related to commercial photofinishing and the photography industry as a whole was the 16,000-member Photo Marketing Association (PMA), which was established in 1924. The PMA, previously known as the Master Photo Dealers' and Finishers' Association, was formed by the merger of the Master Photo Finishers of America (founded in 1924) and the National Photographic Dealers Association (founded in 1933). The PMA sponsors several important industry publications and maintains a photofinishing and photography retailing reference library and hall of fame at its Jackson, Mississippi, headquarters.
According to the Photo Marketing Association's Industry Trends Report 1995-96, photo processing held the largest share of the revenue in the amateur market with 43.1 percent. Within the amateur market, 710 million rolls of film were developed in 1995. Total rolls were down slightly from the 1994 figure of 716 million, but higher than the 1993 total of 694. Sales in the amateur market continued to remain fairly stagnant since 1988. In that year sales totaled $5 billion, rising by $200 million every year until 1991. From 1992 to 1994 sales remained at $5.5 billion every year, and dropped slightly to $5.4 million in 1996.
Drugstores continued to lead the market of photofinishing with 23.8 percent of total sales and 24.8 percent of total rolls processed in 1995. Drugstore share was down slightly from 24.5 percent in 1994 as discount sores continue to gain more share but drugstores continued to lead. Stand-alone minilabs had 22 percent of the photo-finishing market in 1995, also down from 1994. However, minilab statistics do not include minilab equipment used in other stores. Only 40.5 percent of minilab equipment was used in stand-alone minilabs. Almost 21 percent were in discount stores, 17 percent in camera stores, 13 percent in drugstores, and 7 percent in supermarkets. Discount stores held 21.9 percent of the total market in 1995, one of only two retail channels to show growth from 1994 when it had 18.8 percent of photofinishing sales. Supermarkets accounted for 12.6 percent, the other retail channel to grow from 1994 when it held 11.8 percent. Mail order held 5.4 percent, down slightly from 5.6 in 1994. Other outlets accounted for the remaining 3.2 percent of 1995 photofinishing sales. According to the PMA, in 1997, 65.1 percent of photoprocessing was done by wholesale, captive, or mail order labs; the remainder was done by retail labs.
Minilab equipment has become increasingly common in the photofinishing industry, accounting for 33.5 percent of the amateur market photofinishing dollar sales in 1986, 40.3 percent of dollar sales in 1988, 43.4 percent of dollar sales in 1990, 44 percent of the amateur market photofinishing dollar sales in 1992, and 44.4 percent in 1995. The estimated number of minilabs nationwide increased from 5,200 laboratories in 1984 to 11,900 laboratories in 1986 and 15,300 laboratories in 1988. After that year, growth in the number of minilabs leveled off to a degree. In 1991, the estimated number of minilabs nationwide was 17,200, and grew by only about 150 per year to 17,500 in 1993. But in 1994, minilabs began to grow quickly again, shooting up to 18,900 in that year and 20,500 in 1995.
Within the various film formats, 35mm film increasingly dominated the market, accounting for 57 percent of exposures in 1984, 65 percent of exposures in 1986, 75.4 percent of exposures in 1988, 83.1 percent of exposures in 1990, and 88 percent of exposures in 1992. With the introduction of the disposable camera, 35mm dropped slightly to 80.5 percent of exposures in 1995, with disposable cameras filling in with 6.9 percent of exposures. Conversely, 110/126 film accounted for 18 percent of exposures in 1984, 17.6 percent of exposures in 1986,15.1 percent of exposures in 1988, 12.3 percent of exposures in 1990, 9.6 percent of exposures in 1992, and only 6.5 percent of exposures in 1995. Disc camera film dropped off quickly as the novelty and excitement for the product dropped off. Disc accounted for 22 percent of exposures in 1984, 14.5 percent of exposures in 1986, 7.4 percent of exposures in 1988, 3.8 percent of exposures in 1990, only 1.6 percent of exposures in 1992, and nearly disappeared in 1995 with only .8 percent of exposures. The rest of exposures in 1995 were taken by instant film with 2.7 percent, and slide film with 2.6 percent of exposures.
Camera stores and stand-alone minilabs had strong commercial sales increases in 1995, especially from commercial sources such as graphic arts and advertising. With 35mm's slight drop in share (its first ever), large format film types from these commercial sources helped fill in the gap along with disposable cameras. As Advanced Photo films, introduced in April 1996, take on more of the market (it took an estimated 7 to 8 percent of the share in 1997), it will also take some of the 35mm share.
While roll volume decreased by just under 1 percent, total exposures fell even more with a 3 percent decline. The total number of exposures per roll sold decreased in 1995, bringing about the decline in total exposures. Enlargement volume as a percentage of total photofinishing sales also continued to decline to 5.4 percent, down from the high of 7.5 percent in 1991. Although volume sales are increasing — mostly through labs developing online ordering services — pricing competitions keep the total percentage of revenues down.
In 1991, the end of a photofinishing retail era was marked with the acquisition by CPI Corporation of Fox Photo, a pioneer in photofinishing retail "kiosks." This acquisition added more than 250 retail sites and 50 minilabs outlets to CPI's base of approximately 1,360 photofinishing retail sites, including almost 1,000 outlets situated within Sears stores. In the early 1990s, Fuji Photo Film U.S.A. and its sister company Fujifilm Photofinishing U.S.A. acquired or gained controlling interest in Allprints Quality Photo Services, Dean's Photo Service, McJohn Inc., Northern Photo, and TruColor Photo, all wholesale photofinishing laboratories. The Photo Marketing Association's Industry Trends Report 1992-93 indicated that "continued consolidation among central labs produced double-digit dollar expansion for those firms."
CPI Photo placed first in the industry with 2000 sales of $319.1 million, and 8,178 employees. Other industry leaders include PhotoWorks (formerly Seattle Film Works) with 1999 sales of $89.6 million and 690 employees, and Moto Photo with 999 sales of $36.6 million and 478 employees.
In 1982, there were approximately 71,700 photofinishing laboratory employees nationwide. By 1987, this figure increased to 82,500. In 1992, however, the number had dropped to 69,300, and by 1994, there were only 57,000 jobs as photographic processors. By 1997, this number had rebounded to 71,991 employees, 15,123 of whom worked in one-hour photofinishing labs. In 1995, the states with the greatest number of photofinishing laboratory employees were California (12,671 employees, or 17.1 percent of the national total), New York (6,461 employees), and Texas (5,079 employees).
In 1982, the total national photofinishing laboratories payroll was $813.8 million. By 1987, the total payroll had increased to $1.12 billion. And in 1993, payroll had increased again to $1.28 billion. The states with the highest total photofinishing laboratories payroll were California ($177.3 million) and New York ($106.8 million). In 1992, the national average payroll per establishment was $154,531 (compared to $314,133 per establishment for service industries as a whole); the average payroll per photofinishing lab employee was $17,330 (compared to $23,335 per employee for the service industries as a whole). The states with the highest average payroll per employee were Maine ($20,145) and New York ($16,533). The average payroll per employee was lower in Texas ($14,491) and California ($13,922); and among the states with the lowest average payroll per employee were Arizona ($10,504), Tennessee ($10,535), and Vermont ($10,710).
Internationally, film sales per household are highest in Germany (165.0 million units, or 6.5 units per household), Austria (15.8 million units, or 5.6 units per household), and France (106.4 million units, or 5.5 units per household). In 1992, photo processing accounted for 53 percent of $3.7 billion in photographic expenditures in Germany; 47 percent of $1.56 billion in amateur photographic expenditures in Australia; 42.9 percent of photographic expenditures in Canada; and 40 percent of $58 million in photographic expenditures in the United Kingdom.
Microlabs are scaled-down photofinishing laboratories that are less expensive than minilabs — and they require as little as 7 square feet of floor space for equipment and 18 square feet of total working space. Systems such as the Fuji Mini 27 and the Konica Nice Print are also waterless, and thus do not require special plumbing. In the early 1990s, Photogo launched a chain of microlabs based on the P135 system in the United States, Europe, and the Far East. The microlabs' features have encouraged retailers and other businesses to set up in-store photofinishing booths.
The emergence of computer-based digital imaging technology and photo CDs are particularly suited for media, publishing, and other commercial uses that rely on fast electronic processing, transmission, and reproduction. While digital imaging is not expected to replace film photography, photofinishing laboratories have increasingly offered digital imaging and photo CD services.
Some of the biggest retail photo labs across the country, including Wolf Cameras and Konica Photo Services USA, Inc., were developing digital imaging in the form of photos over the Internet. In the mid 1990s, these labs would process the film normally, and if desired, would scan the pictures into digital format and place them on a Web site. The customer was given a highly secure access code and password. From a home computer the customer could view, download, and manipulate the photos, even giving access codes to friends and family who could order reprints online. Early statistics showed that customers ordered five times as many reprints and enlargements over the Internet than through standard procedures.
Local environmental regulations, which were often the most strict, were sometimes enforced through the processing of annual permits for photofinishing laboratories. Photofinishers have made efforts to recycle chemical drums, toner cartridges, single-use cameras, film cartridges, film canisters, and film spools. They have attempted to reduce the use of toxic chemicals such as photoreceptors, recover the silver used in photoprocessing, and to reduce or capture waste effluent.
International Photo Processing Industry Report 1996-97. Bonita Springs, FL: Photofinishing News, Inc.
International Photo Processing Industry Report 1997-98. Bonita Springs, FL: Photofinishing News, Inc.
Omura, Glenn. Minilabs: Strategies for the Future. Jackson, MS: Photo Marketing Association, 1994.
Photo Marketing Association International. The 1995-96 PMA Industry Trends Report: U.S. Markets Report, Jackson, MS:1997.
Photo Marketing Association International. The 1996-97 PMA Industry Trends Report: U.S. Markets Report, Jackson, MS:1998.
U.S. Department of Commerce. County Business Patterns 1994. Washington: GPO, 1995.
U.S. Department of Commerce, Bureau of the Census. Census of Service Industries 1992. Washington: GPO, 1997.
——. Economic Census, Other Services (Except Public Administration). Washington: GPO, 1999.
Comment about this article, ask questions, or add new information about this topic: