Recently I’ve been thinking about paid photos. In theme parks such as Disneyland, certain rides (splash mountain, etc) have a camera that automatically takes a picture of you during the ride. Disney also has several paid photographers walking around the park to take photos at certain points.
For Disney, these photos probably aren’t a huge money maker. I can’t imagine that the cost of the photos pays for much more than the wages of the photographers, or even drives park revenue in a noticeable way.
What are the photos actually worth to the company?
The photos are interesting because of due to the multiple reasons for selling them. Currently, Disney is raking in huge margins. A relic of the pre iPhone age, a printed 5 by 7 inch photo can be around twenty dollars, which is an incredibly high price. To me, photos are an elastic good in that I’m not willing to pay that high of a price for a photo, even if the photo does capture an excellent memory.1 Similarly, instead of having a professional Disney photographers take my photo, I’ve achieved similar results by asking a stranger to take my photo. To me, the difference is neglible. 2
However, there is some inherent value to the photo as well. If there is a photo prominently displayed in the household, it’s 1. great marketing but 2. helps to remind the family of the great memories they had.
However, the photo is not without value. Photos displayed are often great marketing tools, both by creating a halo effect by reminding the family of the great time they had, but also sparking conversations if people come to visit. Companies spend their whole marketing budgets on gaining mindshare; photos are an incredibly easy way to do so.
Proposal
My thesis is this: Photos are an elastic good, and the high price are sunk costs from a previous generation. Photos should instead be seen as a marketing tool instead of a revenue generator. By lowering the price to something nominal (five dollars, say) more photos will be bought. The photos will then explode into homes everywhere, raising brand awareness.
For smaller companies, the question becomes more complicated. The photos sold could very well make up a significant portion of revenue. In this case, the decision would have to be made on a case by case basis. Photos could very well be an elastic good, and lowering the price could result in an overall increase in revenue. On the other hand, photos could also be inelastic for a smaller company3, where decreasing price would decrease revenue as well.
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Indeed, there is nothing worse coming off a ride, seeing an excellent photo and then feeling your stomach drop after seeing the high price of that photo. ↩︎
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Indeed, I’ve often come off of rides that takes the photo while riding, and have seen people taking photos of the screen the photo is displayed upon. ↩︎
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Due to a use of props, say. The company has a built in advantage to their photos that consumers are unable to replicate. ↩︎