The State of the Professional Photographic Services Australia
The 2018 Ibis World report for Professional Photographic Services Australia has just been released (Report M6991). This report is very comprehensive and provides a snapshot of the industry as it currently is and its outlook for the future. It provides a snapshot of the state of Professional Photographic Services Australia.
Information such as this is essential for any business owner in being able to remain a viable business in today’s economy. Much of what is reported is generally sensed within the photographic community. The report provides concrete economic data and medium-term forecasts for the industry which photographic professionals could take into consideration in the development of their business.
Key factors for success
Photographers who offer extra services such as digital services and video are more likely to attract potential clients. Photographers in urban area with age profiles most likely to marry are more likely to attract customers.
Niche operators who specialise in areas such as newborn are more likely to attract customers. Photographers who have specialist equipment such as lighting and digital editing are more likely to attract customers.
The business is heavily weighted toward wages are the most significant cost factor. Small operators have higher labour costs and slimmer margins. Profit has declined recently. Photographers who specialise in wedding and school photography enjoy higher profit margins.
Photography businesses require high-value equipment such as digital equipment and associated devices such as lighting, studio flash, props, backgrounds. Although costs ave fallen in recent years, so has revenue.
Some photographers rent equipment and studies and this adds to the overall cost structure to run a photography business.
In sum, profit for photography services is in the region of 8.5% compared to average costs and revenue for all industries in which the average is 14.6%.
Basis of Competition
Competition is very high in this industry due to low entry costs. Competition is expected to remain very high for the next five years. There is falling demand for services so this will keep competitiveness high.
Price is the most crucial point for competition in the industry. Technology is reducing costs and potential customers look to keep their spending low on theses services. Quality of service will be an important differentiator in this market. Studies need to provide superior service and images which will differentiate them from amateur competitors and home photography.
External competition comes from the general public with increased access to photo digital technology. High quality images are available via many electronic devices.
Barriers to Entry
Barriers to entry are low and will remain low. There are no formal qualifications to enter the industry, though high-end photographers generally have some form of photographic training commensurate with the area they operate in.
Another barrier to entry is market saturation and geographic location. Urban areas are oversaturated. Locations such as regional areas where saturation is low, offers an opportunity of photographic businesses to establish themselves. Adding to this a niche photographic area is an advantage. The market is highly fragmented and no one business is dominant.
Low level of capital intensity. Initial expenses to buy high-level equipment may be required, however, wages account for the largest portion of expenses. Labour-intensive processes such as taking and editing of images has contributed to this.
The level of revenue volatility is low. Variations in discretionary income will affect photography services revenue. When consumer spending is low, photographic service spending is low. Therefore, photographer income will fluctuate according to economic conditions.
Regulation and Policy
Photographic services experiences a low level of industry regulation. The major influence is regulation in relation to copyright laws. The industry is also subject to surveillance laws.
A simple summary is photography services is expected to see slow growth over the next five years. There is a low barrier to entry and high levels of competition due to the entry of new photographers and amateur photographers to the industry. Wedding and school photography remain strong areas in terms of revenue, though very competitive. Niche areas in photography tend to do well.
© Fine Photography 2018