Photo print and media market outlook, with Ina Hilker, Felix-Schoeller Group

Gary Pageau of the Dead Pixels Society talks with Ina Hilker, head of market intelligence, Felix-Schoeller Group.  Hilker was the author of a new free report, "Photo Printing Market Trends," from Felix-Schoeller. In this interview, Hilker discusses the impact of COVID-19 on the photo printing market, considerations for the application of different printing technologies, and the outlook for the post-pandemic future.

To download the report, click here.

The Felix Schoeller Group, headquartered in Osnabrück, Germany, is a globally active family-owned company founded in 1895. With more than 3,703 employees at 19 locations in 11 countries, we develop, produce and market specialty papers for photographic applications, for digital printing systems, for the packaging market, for self-adhesive applications and for the furniture, wood-based panel, and wallpaper industries. 

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Transcript

Erin Manning  0:01  
Welcome to the Dead Pixels Society podcast, the photo imaging industry's leading news source. here's your host, Gary Pageau.

Gary Pageau  0:10  
The Dead Pixel Society podcast is brought to you by Mediaclip, Photo Finale and Advertek Printing. Hello again and welcome to the Dead Pixel Society podcast. I'm your host Gary Pageau and today we're joined by Ina Hilker, the head of merchant intelligence for Felix Schoeller over in Germany. Hi Ina, how are you today?

Ina Hilker  0:31  
Hi and good morning Gary. I'm very well thank you. For the people

Gary Pageau  0:36  
weren't familiar with Felix Schoeller? Can you tell us a little bit about the company long standing history in the industry.

Ina Hilker  0:42  
Felix Schoeller is a leading manufacturer of high quality specialty papers we have around 3800 people in 12 production sites around the world. And we manufacture around 400 to 450,000 tons of paper every year. One of our major markets is photo media or media for photo applications, small format as well as large format media. And we are one of the few remaining paper minutes worldwide supplying photographic base paper for traditional silver halide coatings. We are in other paper markets, too. We supply specialty paper for the furniture and flooring industry we have nonwovens for wall decoration. We have sublimation paper for gift products and textile markets, among others. 

Gary Pageau  1:42  
And those markets are becoming more and more photo if you will, the wall decor and the gifting sublimation are kind of coming into contact with photo more and more.

Ina Hilker  1:50  
Yeah, we are seeing interesting overlaps there too. And it is interesting for us because we have a long history in photo markets. And now we see our so called new products also moving more into the photographic space. Interesting.

Gary Pageau  2:07  
So most people don't realize is many of the branded silver halide papers over the years referee made with Felix solar base media as part of the formula there. So you've been a long standing component of the photographic industry without a lot of people even being aware of it.

Ina Hilker  2:24  
Oh yeah, that's true. And for a long time, we were very proud to say that every second paper photograph in the world was made on foot Felix Schoeller paper in the good old silver halide days. This has changed, obviously. But yeah, for a long while we we were proud that we had every second photo on our paper. The reason

Gary Pageau  2:48  
why I want to have you on is Felix Schoeller recently released a report to the industry which I wanted to discuss with you the high points of it. Because it's the kind of report that shows market trends in photo printing media, you are the author of the report, how did you come up with the information,

Ina Hilker  3:08  
several sources we used for this information. We have been analyzing photo markets for many, many years. And we have a very good relationship with our customers. And we talk to our customers on a regular base. So one thing we did is that we build a survey and we asked a large number of our customers around the world, what kind of trends they see in photo printing, in particular with regard to technology changes. We also work with industry consultants, of course and we collect information from from independent consultants. And then also we talk to other players in the market like equipment manufacturers, printer manufacturers, software suppliers, we also talk to for the distributors. So these are the sources we use for our information.

Gary Pageau  4:11  
So you're getting information not only on people who may be using your product, but using a mix of other products. So it's a pretty global look at the market, not just from a Felix Schoeller viewpoint.

Ina Hilker  4:22  
No, exactly.

Gary Pageau  4:24  
So let's talk a little bit about that. The report starts out with the impact on photo printing that the COVID-19 had on it. And it really doesn't seem very optimistic. You will I mean, it seemed like in 2019 to 2020 there was an overall total market decrease, but it looks like that silver halide took the biggest hit. Yeah

Ina Hilker  4:48  
2020 was a very difficult year obviously it's it's it's a no brainer. With regard to photo printing. We saw different effects. Professional markets like school photography, event photography were hit very hard, I mean it without events, there's no event photography, obviously, photo retail printing, so onsite printing of photo gift products and follow photocard for the prince was hit. Also because of the lockdowns, stores were closed for a time in Europe in the United States. In Europe stores were able to reopen after a while, but they blocked off their instant print kiosk because they were afraid that people would catch COVID from touching the print device, this market segment was was hit also, on the other hand, we saw that products like wall decoration were very much in infocus. Last year, because people had time at home, they looked through the pictures, they found beautiful pictures and had product made eventually because they had time to do it. The same goes for photo books and calendars, we saw some growth in that category. But in the end, the problems in the professional segment and in for the retail printing were bigger than the than the growth we saw in these other categories. So the growth in Wall decoration and photo merchandise made up for some of the losses but not for all of it.

Gary Pageau  6:34  
That's one of the things that most people generally speaking in the marketplace don't realize is the the school and events market were among the largest market segments in terms of consumption of paper than than the lot of the other segments. So when that segment got hit, it has impacted the overall market. Although for the most part, when you talk to, you know, independent retailers, or some of the online companies like that, like that, who were moved into wall decor and did some innovative marketing, they they were able to withstand the hit. One of the things that I saw in the report was that toner actually increased a little bit toner based printing technologies. One of the trends we think we're seeing with COVID is that it that it accelerated ships, it accelerated, moved online and accelerated some moves to directed at all for Image Capture for events and schools and things like that. Do you think that's what's happened here is that COVID has made the decline in silver halide more aggressive, and the increase in things like toner greater.

Ina Hilker  7:41  
In the end, yes, that's, we believe that this is what happened. Silver highlights, first of all professional was the right professional is a strong segment still for silver highlight, and that was hit heavily. And at the same time, people also discovered that with with silver halide and the chemistry you are running, you need a certain turnover to keep your chemistry being okay. And also to keep the cost advantages you have with silver highlights if silver highlight needs a lot of volume to be cost effective. And these advantages are going away with the declining volumes. And because we saw these big declines last year, it's getting more obvious that what what the problems are with silver halide, and people move to other technologies faster now.

Gary Pageau  8:45  
So we're seeing increases in dye sublimation for gifting products and things like that thermal for kiosks, which I remember when people turn up their nose, that thermal and kios is like that will never work. And now you see what's being produced in kiosks and they're excellent prints. There's no reason why they can't be side by side with silver halide. And then we also see high productivity toner based systems an inkjet kind of coming to the forefront from the field of solar viewpoint. Do you think the switch has happened that that silver halide has been technically replaced? It just doesn't know it yet?

Ina Hilker  9:22  
No, I wouldn't put it that strong. I mean, this transition away from silver halide to other technologies has been going on for for a long wide. So

Gary Pageau  9:31  
the trend we're seeing with silver halide being impacted is really something that's been happening for a while both from a technology standpoint, and from a lab preference standpoint, like like you were saying there was, you know, the chemicals you have to keep in balance. There's darkroom considerations, it's much more challenging to handle the product and now that you have technologies like inkjet and toner that can compete.

Ina Hilker  9:55  
Yeah, this is very true silver halide is a very Good technology in high volume applications and it has its justification why it is used in central photofinishing if you have medium to smaller volumes, it is clumsy to handle your chemicals there are more advantages with these other so called dry printing technologies where you switch on the power in the morning and your your device is up and running. Well what we have seen quite clearly in in our market research is that product and volume are driving the technologies print service providers are choosing for the printer. So if you are in a smaller volume category inkjet or some printing is your preferred method of choice. If you are in the high volume category like four by six printing in a central environment your technology is is silver highlight because there are it's worthwhile to work with the chemicals are in the long term inkjet or liquid toner devices because these print devices offer a much higher speed and capacity. The other

Gary Pageau  11:19  
thing that it offers is greater flexibility in terms of products you can offer

Ina Hilker  11:23  
Oh yeah, for sure. For sure. I mean, duplex printing with su highlight is very difficult, I mean you can do it. As such, you print and glue the paper together with with toner based printing or inkjet, you have the opportunity to do duplex printing for for books for example, lets you

Gary Pageau  11:45  
can do things like gifts, Canvas enlargements, you know, things like that, that are you can generate many more products off a single image, then you could previously because in the old days, as you and I both remember the days of film, it was basically a one to one thing there was one image and you took basically they printed one picture off of it right a four by six. And now consumers may have many more pictures, you know, probably five or 10,000 pictures a year they're taking. And out of those. There's a few great ones, which they can make many things out of which I think is the shift for the industry is to go from a one to one idea to a lot of things from a few images idea at a at a higher margin and productivity. Yeah,

Ina Hilker  12:27  
absolutely. And then, with these other print technologies, you have the advantage that these these technologies offer a much wider range of substrates like, like Canvas, vinyls, you name it, you can nonwoven products, for example. And these are substrates, you cannot print with silver halide technology. But you can with inkjet or toner base printing devices,

Gary Pageau  13:00  
there was a point in here where you talk about why people made the changes from one tape and media to digital media, right? Where were you talking about this, I believe is on page six, where you're talking about people are looking for new opportunities, but they're also being quote unquote forced to change. So part of this is a growth opportunity, but also an opportunity that maybe my equipment isn't going to be around much longer. Yeah,

Unknown Speaker  13:26  
in in our survey, we actually saw that people started transitioning to other technologies A long time ago already, let's say 10-12 years ago. And these people in the beginning of this technology transition in general saw opportunity in these new printing technologies, they saw that they couldn't use dry technology for photo gift products and wall decoration for example. Over time, these people, of course, transitioned to different technologies, while others were staying with silver halide and these people staying with silver halide, they start changing over to new technologies. Now they have started in the past years, they're very, very late. And they are driven by the fear that silver halide technology in the long run will not be available anymore. And it's not just the printer it's also also the chemicals for example and they start having the feeling and also the paper, they start changing over to other technologies out of fear that either one of their components or the whole system is not available anymore in let's say 10 years or whenever whenever

Gary Pageau  14:50  
is used to be able to amortize you know have a printer or a film processor or a paper processor over decades. Getting going. And it's, it's golden, you know and nowadays because of COVID You know, we're also looking at shipping problems with you know, containers off the coast of California with paper not being able to arrive. And there's a lot of concerns with that. Moving on from those types of concerns. I also found interesting this one chart, I believe is on page seven, where you talk about the type of printing technology for different types of applications, photo merchandise, wall decor, school and kindergarten photography, consumer for photo printing, do you think that's where the choices are going to be made is I'm going to choose toner base more because I'm more into the photo merchandise world and I you know, if I'm more into wall decor and posters, and higher end albums, I may choose inkjet is that where the delineation is taking places is the type of markets you're serving?

Ina Hilker  15:53  
Yeah, I tried to explain that a little earlier already. It is like it's the type of product and the volume behind the products you're offering is what defines the technology you are using all these technology have their merits, but they are strong for different input for different features like tuna and silver highlight both offer very, very, very good quality, and also high speed printing. And in the case of silver halide, it's also low cost combined with high speed printing. inkjet, on the other hand, offers a wide range of different substrates and surfaces, you have glossy you have met, you have metallic, all sorts of things, you have Canvas, all sorts of different substrates if if we look outside printing on paper, which is the Philip Schiller interest, of course, with inkjet, you can print on wood, you can print on glass, and you have a much larger product range you look at so if you want to go into war decoration, and you would like to offer the whole range of products, inkjet is your technology of choice. If you are a small photo retailer and you offer onsite printing for four by six prints, you want to look at inkjet or thermal because you have small printing devices, you can scale these printers, if you need more capacity, you just buy a second one and you do not have to change everything in in your print shop. So it is product and volume that defines the technologies you want to use in for your printing

Gary Pageau  17:47  
and also portability to I mean, that's one thing so you're not really mentioning here, but I think it's pretty important if you're putting in some of these digital printers, especially in a retail store, right? I'm talking about, you know, a pro shop, you can reconfigure your store and move things around much more easily than you could with a wet lab back in the day. It's just gets the retailer much more flexibility or even the ability to to print at events or remotely or do things like that, which you know, you can't couldn't take a wet lab to a wedding reception and make prints there.

Ina Hilker  18:17  
Yeah, that's that's a great point, Gary. Absolutely. And in particular, with regard to event photo, we can see that these event photographers it's like they love the small inkjet printer devices you carry along. at graduation of my two kids, we had these event photographers with small inkjet printers and we could buy the prints immediately why we were celebrating their graduation.

Gary Pageau  18:47  
And if you have they make it easy and affordable. You're more likely to do that than to pitch you up a week later with an email that says hey, go to a gallery and find pictures not that there's not a market for that. But I think there is an advantage to in the moment picture providing for those kinds of things like wedding receptions, graduations, theme parks, all of these places where when people are engaged in the activity, they want something to take with

Ina Hilker  19:13  
them. Yeah, definitely it it. It makes buying these products easier. And you're absolutely right there is a market for all of these prints a week later and I go to an online gallery but a large bunch of people is happy when they can buy these prints at the event and take it home immediately and and also if you buy it immediately. Sometimes you still can go to this gallery A week later and reorder, or whatever it is just it makes things more flexible and offers more options for for the printer and also for the buyer.

Gary Pageau  19:52  
One of the other items that's in the report is you talk a little bit about future growth that the market is going to recover. After the impact of COVID-19, and it will grow through the next few years. Can you talk a little bit about that? Because that's really more of the positive side I think we want to go towards is that is the positive outlook for the industry. Yeah,

Ina Hilker  20:14  
that's what we all hope that we will see some recovery after this bad year 2020. Let me start by saying that, unfortunately, with all the lockdowns we were still seeing this year, this recovery is is a little delayed. So from what we have seen in the first six months of this year, some markets were still slow and difficult, but things start to pick up now. Even in Germany's schools are back to a regular schedule now and not locked down. So school photographers can go out and take pictures again. So we all hope that we are we are turning the the industry now the corner now with regard to growth, and then yes, actually, before COVID, the trend for photo printing was not bad for merchandise, of course, has been the driver of growth in the industry for for many, many years. And this is across the world. But there's still a lot of potential in in photo merchandise in particular, outside of the established markets in Western Europe and in North America. But also the trend for for single photo prints four by six was was not bad before COVID. It was not great. But we were not seeing these big declines. We saw in the early 2000 years, this decline was in low single digits, I would say. And in many markets, it was obvious that smartphone apps were support supporting four by six printing as well as foreign merchandise like in Europe, we have this famous free print app or Lala app where you order your your prints with a click from from your smartphone. And you could see that this was supporting, printing off of four by six prints already. So the trend was not bad, bad. And from our point of view, there is no reason why we wouldn't go back to these more positive trends when we come out of this pandemic.

Gary Pageau  22:45  
Yeah, and I think one of the things that's interesting is you have a note here in the one of the pages about the projection of growth. And you know, thermal, seems to be going to be growing in double digits. toner-based about 6% inkjet 2% of that's coming from a fairly large base, but still silver halide, even though it will decline is still bigger than thermal. I mean, it's still a big segment of the market is silver halide.

Ina Hilker  23:10  
Yeah, that's just what a lot of people don't know, I don't want to see anymore these days. silver-halide is still a big part of this market. It is a substantial volume. And this will continue for many years in central processing. And this is I know this is a very European thing. silver halide is still the dominant printing technologies. This is something we shouldn't forget a lot of markets and including North America have shifted away from central processing. I mean there are a couple of very strong central photo labs in the US. I know this and they also run a substantial volume of silver halide paper but in Europe, central processing is a lot stronger than in any other region in this world. And well this is basically silver halide printing.

Gary Pageau  24:13  
So to get a copy of this report, we've set up a special bitly link, which we'll put in the show notes, but it's a www.bit.ly/FelixSchoellerphotoprintedreport. And for more information on Felix Schoeller, as a company you know, where do you want people to go?

Ina Hilker  24:29  
Yeah, if you want to learn more about our products and services, please go to our website www.Felix-Shoeller.com. And if you like to discuss the results of our survey or want to learn more about the report, my email is that in the report, so please contact me directly. I'm happy to discuss market trends with anybody who's interested.

Gary Pageau  24:57  
Well thank you enough for your time, and your Information and I hope you have a great fall season.

Ina Hilker  25:04  
Thank you very much lovely to speak with you and thanks for having me.

Erin Manning  25:10  
Thank you for listening to the Dead Pixels Society podcast. Read more great stories and sign up for the newsletter at www.thedeadpixelssociety.com

Transcribed by https://otter.ai