Another Chapter Ends in Kodak Story

David Haueter
Jul 5, 2012

Another chapter in the Kodak saga ended on July 2, when the Kodak Gallery site for North America officially shut down and the process of transferring billions of customer images to Shutterfly got under way. As you may remember, Shutterfly acquired the U.S. and Canadian online gallery assets of Kodak Gallery in late April for $23.8 million in an undisputed bid (see Shutterfly Poised to Increase Market Lead with Kodak Gallery Acquisition). Those assets included not only the billions of photos accumulated by Kodak Gallery customers over the years, but also the list of Kodak Gallery’s 68 million customers.

Transferring that many digital image files is a big project for Shutterfly, as the volume represents around half of the total number of photos Shutterfly has gathered from its customers since it opened in 1999. Shutterfly does have previous experience with this though, as it went through the same process last year when they acquired the gallery assets of the American Greetings PhotoWorks online site when they shut down, but the Kodak Gallery transfer is much larger.

Kodak Gallery App Closing Notice

According to a story on the L.A. Times website (Shutterfly’s Kodak moment in 5 billion frames, June 30, 2012), Shutterfly will be using a score of 7-inch rack-mounted hard drives to collect the image files from Kodak’s servers, which accounts for 5 billion images. The hard drives will then be driven down the road to Shutterfly’s location and transferred to their own permanent servers. Transferring this much data takes a lot of time, as the story also says that the last files will not be transferred until November. For Kodak Gallery customers, the process should be relatively seamless, though they will have to get used to a new website. Getting previous Kodak Gallery customers to keep ordering prints and photo merchandise items from Shutterfly may be more of a challenge, as many consumers find it easier to just share photos electronically these days. Shutterfly should certainly promote their “Share” sites with previous Kodak users, as this is a nice feature for sharing photos and generating products from groups (rather than just individuals) that Kodak Gallery customers did not have.

Along with the sale of Kodak Gallery’s U.S. and Canadian operations to Shutterfly, Kodak has also closed Kodak Gallery international sites and services on July 2nd, and international customers are on their own when it comes to finding a new home for their images. A notice was sent to international customers in late June to announce the closing, and customers were urged to download their Kodak Gallery images and complete any photo projects by July 23rd or they would be lost. It is likely that Kodak was looking for a buyer for their Kodak Gallery international sites as well as the North American site, but decided to close them down completely when they found no buyers.

Aside from the fact that Kodak has exited yet another consumer business that they used to be a major player in, Snapfish is the sole remaining online photo service that has a truly international presence. In the long run, this may provide a boost to smaller regional and country-level service providers, as more customers may return to them for their photo printing and photo merchandise needs. So far, Shutterfly has decided to keep their business within North America, and it’s unlikely that another large company will step in to fill the void left by Kodak Gallery’s exit from the international markets.


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