Wednesday, July 09, 2008

CafePress acquires Imagekind - what next?

I woke up this morning to find that CafePress has acquired Imagekind. Below you'll find links to the announcements on their respective blogs and my initial thoughts - set out as pros, cons, observations and queries. While reading all of this just keep in mind the relative size of the memberships - CafePress has 6.5 million members and Imagekind has 50,000 members - and I'm one of them.

Here are the two relevant posts on the Imagekind Blog:

This is what is says on the brand new CafePress blog.

CafePress has acquired Imagekind, in the non-hostile and entirely excited way that companies combine when there’s a natural synergy that’s to the benefit of everyone involved – most especially the customers.

Imagekind is a lot like CafePress – on-demand printing, individual artists selling their designs online, a vibrant community, the democratization of commerce. But Imagekind specializes in fine art printing and framing, allowing consumers the ability to order and make museum-quality giclee prints
CafePress Blog - Buying into the art market… welcome, Imagekind
The key points are:
  • no change is envisaged in the immediate future while the two companies learn more about one another
  • CafePress think Imagekind has built a very good product - and that there is potential synergy to be tapped into. This is mergers and aquisitions business code for "there will be changes in the future".
My initial thoughts on all of this are as follows:

Pros
  • In a 'fear of a recession' oriented economy, linking up with a really dominant force in the marketplace is probably a very good thing for all Imagekind members (compared to some of the alternatives)
  • Potentially it's a very big bonus for all CafePress members if Imagekind is to deliver a 'fine art' oriented quality print facility for CafePress
  • Potentially it's a bonus for all Imagekind members if our work now becomes visible to CafePress members/audience who want to purchase the sort of work we produce. (Emphasis on the word 'if' - see the comment at the end for the reason why)
Observations and queries
  • This is a fairly big change in orientation as to the market place. I personally don't think that the people who shell out large sums for quality fine art prints are the same as those who buy fridge magnets and T shirts for the dog - and vice versa.
  • The interesting question is how the 80:20 rules works at Imagekind. Is the bulk of the Imagekind turnover coming from a few people with high value items or lots of people selling low value items?
  • I wonder whether this means vendor shops for Imagekind products via CafePress infrastructure?
  • CafePress already has an arrangement to market its products via Squidoo. My guess is that Imagekind prints will be available via Squidoo before the end of the year. My bet is it'll happen in less than 90 days.
Cons
  • The existing artwork by 50,000 Imagekind members - which is difficult enough to find as it is - could get totally swamped, if not obliterated, by all the new artwork coming in from upto 6.5 million CafePress people.
  • Vendors with images on Imagekind are likely in future be able to offer fridge magnets, coffee cups and sweatshirts for their images - if that's what appeals to you. My guess is that those selling fine art prints at higher price levels will disappear from the site.
What this change does not do

This change does NOT address the issue of Imagekind's failure to clearly separate out artwork which is originally hand-made from technological art produced via a camera or digital wizardry - which is one of the aspects of Imagekind which I've become very much less than happy about. This indicates both a failure to understand the nature of the customer and a tendency to favour photographs and digital art and/or a lack of capacity to develop the database and website design which support the operation

In my opinion, the only way to keep everybody happy is to radically improve the current search facility available on Imagekind - which has always been its major weakness, even with the latest improvements.

There again, who am I kidding? Look at the numbers - this is a takeover not a merger and the priority in all of this will be to keep CafePress members happy.

In conclusion, I'm largely neutral on this at the moment - but I'll be watching with some interest to see how it plays out in the next few months. I predict major changes will be sorted in time for marketing products in the lead-up to Christmas.

Links:

5 comments:

Barney Davey said...

Hi Katherine,

I saw the press release a couple of days ago and have been pondering my own blog regarding the acquistion of Image Kind by Cafe Press. You bring up some very good points on both pro and con of this new deal.

The biggest benefactors of this arrangement are most likely the shareholders and investors in Image Kind. From my perspective, after what seemed to be a promising start, IK seemed to stall out a bit on it's potential. I was never sure whether it was a lack of vision or cash, or a little of both. Not that it was doing a really bad job, more that it seemed to not be progressing towards taking the dominant role it initially portended.

What Cafe Press' management does with IK is the key to whether IK's 50,000 artists benefit from the deal. Is there a vision to create something powerful by bringing the two companies together? Will the new entity be able to mount a serious challenge and offer artists a true competitor to Art.com? Is there some visionary thinking that will allow the new entity to capitalize on technological developments? Is there enough input from artists as opposed to techies to address items such as those you mention?

This latest development signals the changes that have roiled the art print market are far from over. I'm betting that by the year's end timeframe you mention for this deal to be sorted out that announcements from other quarters in the art and picture framing market will be grabbing the attention of visual artists, art publishers and art industry professionals everywhere.

Katherine Tyrrell said...

You make some sound additional points Barney - I didn't see the value of the deal (my jaw dropped!) until after I'd published this post.

I agree about the stall - I've gone lukewarm on Imagekind of late. I still think they have the best set-up but I don't like the direction they've been taking prior to the latest announcement - too many photos and not enough artwork.

Over here in the UK we're having some very major shifts in spending - and I'm expecting that to have a big knock-on effect on some of the major high street (non-art) chains. We've already had some very worrying results posted by some of the major companies

One can only speculate at this point about how the economic shake-out and recession will affect online traders - but my take on it is that there are too many outfits that look a bit too similar in the marketplace at present - particularly in relation to photographs.

I'd like to see some really serious competition for art.com - in relation to giclee versions of hand-made original art - but first people have to be able to find the art!

I'm intrigued by your last paragraph!

Linda Armstrong said...

Great post, and great comments, too! I agree. I stopped visiting Imagekind about a year ago. It seemed dead in the water.

There are, indeed, many overlapping services and the economy is ominous around the world. It's going to be a quiet Christmas. The best-capitalized and most efficient will ride it out.

There are art sites that sell original paintings (absolute arts.com), not prints of original paintings.

This is an interesting argument, and it could be the basis of specialized sites, actually--prints from drawings and paintings only? Prints from collages only? Fresh-layered digital art?

Okay, enough silliness--I know what you mean about the photographs. Actually, carefully juried microstock (photography) sites offer prints from their fabulous collections, so photography doesn't have to be on these POD art sites at all. (Okay, I post mine, but I don't have to. I have hundreds of paintings and drawings, too.)

I agree that Barney's last paragraph is fascinating. It makes sense. It will be interesting to find out what happens.

Linkin Mall said...

Recently CafePress began competing with the artists for whom it acts as printer and shipper.

CafePress rents web shops to its artists. The artist creates a website page and manually loads the desired blank products. The artist imports his image onto each product, arranges the products on the page, describes the products, titles the products and tags the images.

Initially, the artist would set a markup and received the markup for each product sold.

However, recently CafePress began competing with its artists, using the artists' own images. CafePress created a marketplace where a customer can search a keyword. That search brings up artist products. When the customer buys from the marketplace CafePress pays the artist 10% of the price CafePress set. Both the customer and the artist lose money. If the artist's shop sells a t-shirt for $21, the artist makes $3.01. If the marketplace sells the same shirt for $25, the artist gets $2.50. The customer pays $4 more, and the artist gets $0.51 less.

CafePress tells artists to "promote your own shop," but CafePress buys Google adwords using the very image tags the artist provided.

CafePress justifies this bait and switch of service terms by telling artists they can opt out if they don't like the new terms; however, many have spent as much as 7 or 8 years creating as much as 88000 images.

In spite of their sweat-equity, many shopkeepers (content providers) are building shops at other print-on-demand companies and then closing their CafePress shops due to the broken faith and trust, the financial hardship CafePress has delivered into so many lives, and the huge amount of time and dedicated effort all lost in the momentum of their own businesses. Would you keep your AMOCO station franchise if AMOCO built a company store across the street from you?

Katherine Tyrrell said...

I normally don't allow comercially oriented comments on this blog. However I've read the last comment a few times now and it seems to me to be something which artists need to be aware of.

Cafe Press are at at liberty to send a response!



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