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Web 3.0 and Shutterfly

Posted on Wednesday, May 30th 2007

We have already discussed an overview of the photo sharing industry and looked closely at the leaders: Flickr, Photobucket and Kodak Gallery. Here we will take a look at Shutterfly’s offering from a Web 3.0 perspective.

Jim Clark launched Shutterfly on December 13, 1999. On the same day Clark’s partner from Netscape, Jim Barksdale, launched Ofoto. Shutterfly is headquartered at Redwood Shores, California and offers storing, sharing, enhancing and printing of photos, as well as photo merchandise. Shutterfly has over 900 million photographs in its archive and was awarded the Field Test Winner Award for photo book by Money Magazine in 2006.

Context
If you are looking for personalized photo products and customized photo prints, then Shutterfly is the right place for you. The site enables you to make wonderful photo items like wallet, Havana box, photo book, tie, jewelry, tote bag, key rings, etc. In most respects Shutterfly is very similar to Kodak Gallery.

Content
Shutterfly allows its users to upload photos and create album or collages with its free software, Shutterfly Studio, and transform digital pictures into 35mm-quality prints and share them with friends and family. Shutterfly allows uploading of photos one by one or in batches through its Picture Assistant browser. The site has excellent editing tools to make changes in uploaded photos and albums. All the editing, storing and sharing features are free, while they make money from the printing and other photo merchandise sales.

Community
Like Kodak Gallery, Shutterfly allows photo sharing within closed user groups. You can invite your friends or family members as your contact or create groups to share your photos with them online.

Shutterfly supports importing contacts through Outlook, Palm Desktop, Outlook Express, Address Book, Entourage and Eudora. Extremely helpful, something all the rest of the sites need to put in place ASAP.

I would like to see more feedback features like Ratings (like Flickr) or Guestbooks (like Kodak).

Commerce
Shutterfly sells a host of photo products like photo books, calendars, keepsake boxes, luggage tags, photo frames, desk organizers, etc. besides the basic printing service.

Shutterfly Pro Gallery members can sell their uploaded photos or photo products at their desired price through the site. The site charges 15% commission on these transactions. I really like this feature, but given the fact that the community features are lacking, and the site is mainly a closed-end walled-garden, where only friends and family interact, I am not sure how successful the feature is for them. For Flickr, it makes a great deal more sense.

You can also buy a backup CD of all your photos. The charges for CD range between $9.99- $39.99.

Personalization
Personalization comes in the form of personalized merchandise derived out of the photos, and thus, is similar to other photo sites.

Vertical Search
Not as compelling as Flickr.

Business Model
Shutterfly earns revenues through prints, photo merchandise, as well as subscription fees for its Pro and Premium accounts, and commissions from products sold through member networks.

Web 3.0 Rating: Context: A+; Content: B; Community: A+; Commerce: A+; Personalization: A+; Vertical Search: B; Overall Rating: A

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Comments

Have you looked at the sites in the premium category? e.g., Phanfare, Smugmug

Matt Wednesday, May 30, 2007 at 9:54 AM PT

I have looked at Smugmug. Why do you call it a Premium category? Sramana

Sramana Mitra Wednesday, May 30, 2007 at 11:37 AM PT

You have done some good research with these summaries but I believe Kodak is smaller in terms of revenue…. so not sure how you call them as the leader. Also some of the data you have quoted seems to be atleast a year old….

Btw, I believe smugmug could be referred to as premium in earlier comment ‘coz they charge for storage as their business model and offer lots of value add for it compared to other sites which are all free….

Raghu Thursday, May 31, 2007 at 12:31 AM PT

[…] have a significant play in this segment either. There are potential acquisition targets like Shutterfly (SFLY), which is public, and numerous other private […]

Sramana Mitra on Strategy » Blog Archive » Microsoft's Online Strategy Thursday, May 31, 2007 at 6:27 AM PT

As the previous poster indicated, I refer to it as a premium category because unlike the free sites that monetize based on print-revenue, these sites monetize on a subscription but in return provide a higher-quality sharing experience. They are ad-free, including internal ads requesting prints/gift purchases, and provide more elegant online presentations. Smugmug also lets you highly customize your site while Phanfare also lets you post videos and add music to your slideshows.

Matt Thursday, May 31, 2007 at 4:13 PM PT

Flickr also charges …

Sramana Mitra Thursday, May 31, 2007 at 5:45 PM PT

[…] This acquisition pretty much seals News Corp’s position in the Online Photo Sharing vertical. The only thing it may choose to do further, is to enhance the “Commerce” capabilities around Photo Printing and Personalized Photo Merchandise, which have established large businesses for Kodak Gallery and Shutterfly. […]

Sramana Mitra on Strategy » Blog Archive » News Corp's Vertical Posturing Tuesday, June 5, 2007 at 6:37 AM PT

[…] my web 3.0 analysis of Shutterfly, I had mentioned how I would like to see more feedback features like Ratings (like Flickr) or Guestbooks (like Kodak). Their Shutterfly Gallery launched this quarter, about which Jeff had mentioned in his interview, is […]

Still Bullish on Shutterfly - Sramana Mitra on Strategy Friday, May 2, 2008 at 7:24 AM PT