PMA Marketing Research Department Press Release 05/02/04

New PMA report forecasts digital images will generate one-third of printing activity by 2006

The PMA Marketing Research Department released a new report, Photo Industry 2004: Review and Forecast. This 13-page report offers a summary of film, photofinishing, and camera sales through 2003, with forecasts for the current year. It also includes information on consumer printing activity from digital images and examines how economic factors may impact the industry this year.

Among the key points of the report are:

- At the end of 2003, 31 percent of U.S. households owned a digital camera, with penetration projected to exceed 42 percent by the end of 2004. The past year was a pivotal one for the industry, with digital camera sales volume overtaking traditional camera sales for the first time in 2003.

- In 2003, 11.6 percent of all amateur photographic prints were made from digital images, projected to rise to 17.7 percent of all images in 2004 and 34.2 percent in 2006. The total number of prints made will hold steady at more than 30 billion annually, as rising digital printing activity offsets declining film processing sales.

- Nearly 22 percent of digital printing activity during 2003 occurred in a retail environment. During 2004, more than one-third of digital prints are projected to be made at retail outlets, and in 2006, retailers will make 60 percent of digital prints.

- Film sales in 2003 declined by 8 percent in terms of volume, and are projected to fall by another 6 percent in 2004. Film processing sales have fallen at a similar pace.

- A bright spot in the traditional photographic market has been the continued growth of one-time-use camera sales, which increased by 7 percent in 2003 and are projected to rise by another 5 percent in 2004. It is important to note, however, the rate of sales growth is slowing.

- The 2004 outlook for economic growth is relatively favorable, with GDP expected to rise by 4 to 5 percent during each quarter. These increases would follow growth of 8.2 percent in the 2003 third quarter and an estimated 4.5 percent during the fourth quarter.

- Consumer confidence experienced a slight rebound in late 2003, rising to a level not experienced since the first quarter of 2001. The job market will likely play a significant role in determining whether or not confidence will continue to rise and consumers increase their discretionary spending.

Photo Industry 2004 is available for free download from the Marketing Research area of the PMA website at www.pmai.org, or through a fax-on-demand service. To receive a faxed copy of the report, dial (800) 536-8677 and follow the prompts. The ID code is 8222.