dotPhoto: 
    The Bricks Behind the Click  (6/2000)

    by Douglas Dixon

(See also Digital Photography on the Web)

In May 2000, Glenn Paul, Princeton entrepreneur and co-founder of the Clancy-Paul computer stores, launched the website for dotPhoto Inc., a new Princeton-based "dot com" company providing photo archiving, sharing, and printing services for users of digital cameras (www.dotphoto.com).

Indicative of the Internet's growing maturity, DotPhoto is actually Paul's second version of a website for digital photographers. The original site, PhotosByNet, went live in August 1999. However, it had insufficient production facilities for making prints -- and inadequate infrastructure, and Paul now calls it a "trial." It was designed to use an existing one-hour photo-processing store as the production facility. "We took a few hundred orders," says Paul, "but handling even 60 pictures per hour was hard, with hand labor. The one-hour franchise was way too slow. We need to be very efficient, and the same price as drugstore processing."

While new Internet virtual companies are called "clicks" to distinguish them from more traditional "brick and mortar" type businesses, the truth is that any click site that sells tangible goods, even high-flyers like Amazon.com, needs to make major investments in real-world operations like warehouses, factories, and, of course, shipping services.

The evolution of PhotosByNet into dotPhoto required the development of a much more sophisticated "brick behind the click" infrastructure. To take this step, Paul teamed with co-founder Joe Godcharles, owner of a local MotoPhoto franchise, to develop a new photo-processing factory in Ewing, NJ.

He also hired Walter Krieg of InfoFirst Inc. to design and implement the Web hosting service databases and powerful on-line data servers behind the site. Eric Moser, a board member who is a producer at CNET, the San Francisco-based new media company, redesigned the look and feel of the site and the way it interacts.

"We raised about $1 million through January," Paul says, "through angels, the board of directors, and private sources. DotPhoto acquired PhotosByNet and will take it to a whole new level." Unlike other dot coms, says Walter Krieg, president of InfoFirst, "this is a project with a real business, with plans for actually making money."

Concept

DotPhoto is the latest in a series of photo sites aimed at solving the problems of digital photography: organizing and sharing images. The advantage of digital cameras is their immediacy: the images can be easily transferred to a computer to be edited and shared via the Internet. Your kid's birthday photos can be instantly e-mailed to family and friends, or your company's new product design can be posted on your website for customers.

The online photofinishing market is supposed to reach $1.4 billion in annual sales by 2003, according to InfoTrends Research Group. DotPhoto's marketing focus will be affiliations with businesses and membership organizations, and it is also trying to position itself as the "eBay of images," so that photographers can post images and charge fees for their use. Funds have also been set aside for "weblicity," PR on the Internet.

"Digital opens up so many more possibilities to people using photography, as point and shoot cameras break and get old," says Godcharles, "People like the immediate results. You can see your pictures right away, and delete shots if you do not like them."

The disadvantages of digital photography are storing and sharing the photos: you end up with lots of big images, with files strewn around your computer and taking up lots of space. And sharing them with others gets clumsy as the images get larger; you can only fit a few at a time on a floppy disk. Plus, you do end up missing those old-fashioned photo prints. Prints are easy to share with others, look great framed on a wall, and store away in a shoebox. Although you can print out your digital photos on an ink-jet printer, the quality is not the same, and premium computer photo paper can cost over $1 a sheet.

Positioning

DotPhoto and similar sites address these problems by offering the ability to upload your digital images, organize them into albums, share them with others over the Web, and make photo prints. However, these companies still are trying to figure out the right positioning for the consumer market. They differ in their focus and the costing of their storage and printing services.

"We're not in an unoccupied market," says Walter Krieg, "and the others have had the chance to iron out the kinks. Zing is the best site, but they have changed their user interface five times in six months, and changed the color scheme three times."

Some competitors, like Intel's GatherRound.com (www.gatherround.com) and Zing (www.zing.com) are focusing on the shared Web experience. The emphasis is on storing, organizing, and sharing your photos, as described on the Zing site: "Stay connected to friends and family by sharing pictures; Manage your pictures all at one location; Protect your memories by securely storing your pictures." These sites aim to become an online photo community; "Invite your guests to see, and then trade comments about your pictures," says Intel's site.

In contrast, such established developers as Kodak see online photos as more of a byproduct of developing traditional 35mm film. When you drop off your film with Konica (www.konicaonline.com), or mail in your film to a processor like Seattle FilmWorks (www.filmworks.com), you also can have your film digitized into digital images and returned on floppy disk, CD-ROM, or posted on the Web. Since you always get your prints back when they are developed, these sites tend to also offer a wide range of novelty merchandise that can be printed with your image, such as mugs, T-shirts, and mouse pads.

Kodak has been working diligently to expand its presence in digital photography, with efforts like PhotoNet Online (www.photonet.com), a partnership with America Online for the AOL "You've Got Pictures" service, a QuickPrints service for uploading and printing digital images, and its Print@Kodak service, announced in June, which will offer traditional prints from digital photos submitted online.

Other startup ventures are hedging their bets, including Ofoto (www.ofoto.com) and Shutterfly.com (www.shutterfly.com), the next big thing from Netscape Communications co-founder Jim Clark. Some of these sites also offer traditional film developing to attract a wider market of online users. Ofoto now does free film processing in order to get your images onto its site, although it returns only the negatives and not prints. You can then share your photos online, and choose to pay only for the prints that you want.

"This is the future of photography," says Paul. " You can park your stuff and then grab it. You get exactly the sizes you want the first time, and the number of prints. You don't have to print the whole roll a first time. It's like having a Fotomat in every bedroom."

DotPhoto Service

The dotPhoto service is focused on three major components: free uploading and storage of images, inexpensive photo printing, and sharing of photo albums as presentations, with the addition of audio clips. "We view the picture as a piece of a story," says Paul. "Kodak is focused on the picture itself. It has huge overhead, and investment in old ideas. We have no interest in selling you a CD or a roll of film."

Like other sites, dotPhoto will store your images for free, in the hopes that you, and your friends and family, will purchase prints. There is a limit to this generosity, though. After the first year, you must upload at least one photo per month or spend at least $5 on prints over a six-month period. Subscribers get "unlimited perpetual storage" along with discount rates. In the future disk space might be limited to 50 megabytes, equivalent to 100 to 200 color photos. Images are stored for at least three years, or six for images that have been printed.

With the digital approach to photo printing, these sites can print your images for less than the cost of developing a roll of film. "It costs more at Wal-Mart," says Paul, "plus you have to go there."

Sites like Ofoto, Shutterfly, and Zing charge around 50 cents, $1, and $3 for 4 by 6, 5 by 7, and 8 by 10 prints, plus $1.50 postage. DotPhoto matches these prices for large prints, and has significantly lower prices for the smaller sizes.

DotPhoto has various introductory offers, but its "family plan" provides 26 4 by 6 prints a month for $4.99 a month (or $0.19 a print) plus some extras. The 4 by 6 per-print price is $0.21 ($0.30 non-member), and 3 by 5 prints are $0.17 ($0.24 non-member), plus $1.99 postage.

But the most visible difference with the dotPhoto site is the support for audio clips. You can upload sound files from digital cameras, add sound clips to your digital photos, and even communicate via "instant voice mail" with friends as they view your photo album. "The picture is just the beginning of a presentation," says Paul. "You sit on a couch and view the photo album and tell a story."

This capability also makes dotPhoto more than just a consumer site. "For business to business you can upload a PowerPoint presentation as images," says Paul, "and annotate it with your voiceover. When you post a new presentation, we can send the mail to notify business associates. It's not faceless sharing, there's a feedback loop. The creator knows that you have been there to see it."

Web Hosting

Sites like dotPhoto require a significant investment in the back-end server infrastructure to as they go live and attract customers, including "big iron" to store and process all of the customer data and images, and fat pipes to transmit this data back and forth over the Internet. "It's all about speed: You need the right infrastructure," says Paul.

For dotPhoto, this back end includes "the database cluster serving the Web, and a string of file servers for the photo images," says Krieg. "We're starting with over 850 gigabytes (billion bytes) of storage, on fault tolerant disks. With this design, we can extend the file servers infinitely, all over the world."

For the fastest and most direct connection to the Internet backbone, dotPhoto uses dedicated servers located on site at DataPipe (www.datapipe.com), formerly HiSpeed Hosting. "They are located in Newark, a block from Bell Atlantic, in the old Macy's building," says Krieg. "We have a big enough pipe for a small city."

The dotPhoto pipe is an "OC48" connection that runs 1,600 times faster than a typical office complex "T-1" service, and 44,000 times faster than the best dial-up connection that a customer might use to upload a file. (OC48 is measured in billions of bits per second, or 2.5 gigabits, T-1 in millions, 1.4 megabits, and dial-up service in thousands, 28.8 or 56 kilobits.)

In order to handle large image files efficiently, dotPhoto actually keeps several versions of each photo on its servers. When you upload each original photo, the server makes a small "thumbnail" image for quickly browsing through a large collection of images, and a larger "Internet" image that is used for viewing the photo in a Web browser. The original image at the full resolution is used only for creating a photo print.

While the original image might be 1 to 2 to even 3 megapixels with the newer digital cameras (around 1000 x 1000 to 3000 x 3000 resolution), the Internet image needs to be only 360 x 270 to view on a Web page, and the thumbnail image can be 120 x 90. This is a major savings in download time when browsing your images on the Web: an original image might require 500 kilobytes of storage (in compressed JPEG format), while the Internet image is 10 times smaller at around 50 kilobytes, and the thumbnail image is 100 times smaller at around 5 kilobytes.

DotPhoto uses a dedicated T1 line to ship the photo images to be printed to the factory in Ewing. At that speed, even a big original photo can be transferred in around three seconds, or 20 images a minute, and 1,200 images an hour. This is about right for the initial roll-out, since the factory equipment is rated at around 1,000 8 by 10 prints an hour.

Within the factory, one server is dedicated to pulling images from the Web site, and a second for crunching the photos to the right size. The dotPhoto software downloads the images, orients each print correctly on the page, and resizes it for printing. DotPhoto uses custom software to "upsample" relatively low resolution digital images to a larger size before printing them. This trick with this software is to enlarge the image while keeping it sharp and not blurry. "The upsampling looks terrific," says Paul, "I guarantee you can't tell the difference between this and a film print."

DotPhoto does provide recommended guidelines for the maximum print size for different image resolutions: no less than 1024 by 768 pixels for 4 by 6 prints ("results will vary" for lower-resolution 640 by 480 images), 1152 by 864 pixels for 5 by 7 prints, and 1600 by 1200 pixels for 8 by 10 prints.

Web Design:  InfoFirst

Although the "look and feel" of the site has been redesigned since InfoFirst's original design, Krieg and a team from InfoFirst were responsible for the infrastructure. Krieg has a PhD in organic chemistry from Rutgers University and worked as a chemist in the mid-'70s. With his cousin, lawyer Frank Armenante (the barrister), he started the Alchemist & Barrister restaurant on Witherspoon Street. Krieg met Glenn Paul through the restaurant, and the A&B was an early Clancy-Paul corporate client for business systems. "They set up an Apple II Plus to do payroll and our books," says Krieg, "VisiCalc was a big thing."

This experience got Krieg hooked on computers, and he went back to school at Trenton State to earn a degree in mathematics and computers in 1986. Since then, he has started three software ventures with his partner, Simon Blackwell, while also working at AT&T until 1995.

In 1996, Krieg and Blackwell formed InfoFirst, originally to sell a Web-based targeted ad delivery system. "At the time, we could not find East Coast venture funding for our product concept, although competitors from the West Coast found funding," says Krieg. "So we have built a business instead of a rocket to the moon. We became experts in nuts and bolts things. And it looks like the right choice; Web sites are becoming more dependent on information. We can handle the complexity of the Web, instead of just the eye candy."

Photo Processing: MotoPhoto

Joe Godcharles, vice president of operations, is responsible for the photography end of this business. He was introduced to Paul by a mutual friend who knew of his background in both computers and photography. A native of Lawrence, Godcharles graduated from Rutgers University in computers, and went directly to Report Concepts in New York City, where he eventually become vice president of operations. Meanwhile, he was working as a freelance professional photographer on a part-time basis "for events and weddings, on weekends and evenings."

After 10 years Godcharles decided to "move in full-time" to photography, and became owner of a MotoPhoto franchise in the Princeton Meadows Shopping Center in Plainsboro. MotoPhoto describes itself as "America's largest franchiser of one hour photo processing and portrait stores," with over 400 locations in the U.S., Canada and Norway.

The MotoPhoto store is full-service photography-processing studio. "We have a full portrait studio, do full off-site events, and commercial product shoots," says Godcharles. Over the next nine years, he became more involved with digital photography, doing "digital restoration, photos to CD, prints from digital, digital scans, and large format prints and posters."

Photo Factory

The dotPhoto staff now includes seven full-time employees and six people working on the Web interface. The office and factory is located in the American Enterprise Park at Ewing, near the West Trenton train station, and next door to Airborne. As Paul points out, it doesn't have the traffic of Route 1.

The processing factory uses standard chemical photo processing. "We bought the state-of-the-art in digital photography" says Paul. "The equipment has a powerful LCD screen that needs to be tuned to the magnetic field of the earth when it is installed."

"We use the latest equipment," adds Godcharles. "Just the digital exposing part is over $100,000. It's designed for high capacity: We can print 1,000 8 by 10 prints per hour."

To process a print order in the factory, first the digital unit exposes the prints, then the paper goes into the processor to be developed, then through a dryer, and then to the high-speed cutter. Finally, the photos are inspected, packaged, and passed to the shipping department. "We ship within 48 hours," says Godcharles, "and can also send a Web notification."

The entire process works with 600-foot rolls of photo paper. "It's a premium grade paper," says Godcharles. "We are using Fuji. They have the longest fade life in the industry, 70 years, while the others are around 15 to 20."

The trick to efficient processing is to lay out the prints automatically on the photo paper roll, and to track which prints get shipped where. This is handled by printing marks on the paper that the cutter can use to automatically cut the photos to the right sizes. The customer's mailing label is also printed on the roll, so the order can be assembled and slipped into a glassine envelope ready to mail.

"We've put it together over the past three to four months," says Godcharles. "We've set up the site, and built out the equipment. The focus has been on getting the back end together and production running smoothly. We are set up for rapid growth; we can add up to four or five more production lines here in the six to seven months."

Conclusion

The remaining issue with the whole online photo approach is that the images from the megapixel digital cameras are big, and can take a long time to upload. Each image can take a minute or two to transfer over a good dial-up connection (for 500 kilobytes), so a full "roll" of photos from a camera can take a half hour or so, even after deleting the bad shots. On the other hand, there are lots of people on the Internet happily downloading much bigger MP3 audio files these days, even when a song file can take around 20 minutes to download (for 4 megabytes).

And, with a DSL or cable connection, these numbers get much more reasonable, two to four times faster, or more. "In the next two years everyone will have a fast connection," says Paul. Or at least many of the people who will own digital cameras.

The next step is to sign up customers. As an introductory offer, dotPhoto is offering memberships for $4.99 per month, including 36 prints, free shipping, member pricing for one year, plus a free personal computer microphone.

"We offer low prices and quality service," says Krieg. "We are creating a great visual experience, with sounds for presentations, the site for working, and inexpensive prints. It's been a heck of an experience; we enjoyed it."

"Our focus is concentrating on the user experience," adds Godcharles. "We are focused, we don't have a lot of layers, and can offer a better experience. This is the most exciting space on the Internet."

"This is the killer app among ASPs (Application Service Providers)", says Paul. "This is a GRASP, a Graphic-Relational ASP. Text and pictures and sound, creating a multimedia presentation on the fly, out of the database in any order."

"This kind of opportunity doesn't come along too often," says Paul. "We can handle pictures better than anyone in the history of the world."

References

dotPhoto, Inc.     www.dotphoto.com

InfoFirst, Inc.    www.infofirst.com

Web Photo Sharing

• Intel GatherRound.com     www.gatherround.com
• Zing     www.zing.com

Photo Processing and Web Hosting

• Ofoto    www.ofoto.com
• Shutterfly.com     www.shutterfly.com

Photo Developers Online

• Konica     www.konicaonline.com
• Seattle FilmWorks    www.filmworks.com
• Kodak   www.kodak.com