Thom's 2024 "Out There" Predictions

This year I've decided to make a few predictions about what will happen in the photography market in 2024. However, these are not predictions about specific cameras or lenses, but rather some more general observations turned into a "maybe this will happen" sort of thought. 

I've always used predictions not so much as a guide to future products, but rather a way of provoking dialog about that future. This is the time of year most do reflection on what has happened and what we want to happen, so it's also the time to have that dialog. Since I'm being provocative, I'll use some language that's designed to illicit response ;~)

In no particular order:

  1. We'll see one or more photography software companies struggling, perhaps failing. While the constant move to subscription-based software (SaaS, or software as a service) is intensifying, it's indicative of something else, too: software developers are not seeing the money they need to continue with the resources they're currently paying. Subscriptions are seen as "reliable cash flow." The problem with subscriptions is that if you aren't constantly delivering new and useful performance and features, the customer doesn't see the value proposition any more and cancels. There are only two directions that revenue from subscriptions go: up, or down. They go up if you deliver a constant stream of better and higher quality product, they go down if you don't. NCAC (new customer acquisition cost) is a killer if you have to spend more for it and constantly rely upon gaining new users, and you can see just how much some of the photography software companies are struggling with this by the near constant offers you see (mostly on rumor sites). Besides the discount those offers have in them, there's also a commission to the site that triggered the subscription, and that percentage is pretty significant. I've seen regular offers in the 10-15% commission range, and some that are higher. For the time being, the customer acquisition costs apparently are still absorbable by the various developers, but they look awful high to me (~50% of list). Like all costs to a business, over time you want to see customer acquisition get cheaper, not more expensive. Moreover, since you're now in the subscription business, you don't want people cancelling their subscription before you've paid back the discount and acquisition costs you made in getting that customer. I'm hearing from more software companies (not just photography ones) that subscriptions haven't turned the corner for them in terms of cash flow. Thing is, the photography software business is not huge in terms of customer base any more. Plus growth in people buying cameras is very modest, so new customers aren't rapidly growing on trees. I would not be surprised, therefore to see consolidation or failure in the photography software community in 2024.

  2. We have too many Chinese lens manufacturers chasing the same customer with bargain basement pricing, so we'll see consolidation or failure in that group, or they will have to find ways to target higher-end, and unique lenses. How many inexpensive 35mm, 50mm, and 85mm prime lenses do you need? You'll notice the trend line here: in 2023 we started seeing more of these Chinese makers shift from manual focus to autofocus lenses, and that will increase again in 2024. We now have five or six that are well into that transition, but they're still all targeting basic prime lenses. Everyone buys a fast prime lens or two because they think they need it, then puts that optic on the shelf and uses their zoom ;~). Again, the number of new-to-cameras customers is not growing very fast at the moment, so once you have six companies having sold all those folks a <US$300 lens, what's next? Specialty lens companies such as Laowa, which has tended to concentrate on macro and very wide angle, are probably not in any trouble at the moment. The camera makers themselves aren’t creating many such lenses, so Laowa is mostly competition free. But the ones trying to horn into the basic prime set are going to see diminishing returns. Moreover, they’re mostly buying glass from the same two sources (one Chinese, the other Hoya). This makes it more difficult to distinguish their 85mm f/1.8 prime effort from someone else’s, for example. Moreover, many of these Chinese lens makers are using rumor sites and discounts to acquire customers, so we have the same customer acquisition cost problem I mentioned with software. One thing I noticed in redoing the lens database at the end of the year is that a lot of the Chinese lenses have gone up in price from when they were announced, which suggests to me that between real costs, customer acquisition costs, and currency exchange rates, they were cutting it close to the margin in the first place. I’ll also point out that I’ve seen some quality decline issues from at least two companies I’ve sampled lenses from. It’ll be interesting to see how the plethora of lens makers manages the stresses that they have to be facing in 2024.

  3. ILC market shares are going to shift more in 2024. We’ve already seen this a bit in 2023 with Nikon’s two-pronged Z8/Zf launches, which helped produce a 1% overall unit gain, despite those being higher-cost products. Canon, OM Digital Solutions, and Sony will lose market share, while Nikon and Panasonic will gain market share. I’m not sure about Fujifilm, but they’ve been on a slow gain path. Some of this is like what happens with football teams. Confidence boosts results, and results boost confidence. Lack of confidence reduces results, and reduced results lower confidence. Right now Nikon is quite confident that their strategy is working. I see them doubling down in 2024 (I’m expecting three solid new camera launches). Sony, on the other hand, launched the A9 Mark III early, which shows lack of confidence that it would hold up with the February onslaught of new cameras from others. Yes, the technology is “nifty,” but is it practical? I don’t know yet, I’m not on Sony’s list of people to provide early samples of the camera to. And I’ve already forgotten the A6700, it was so luke warm. Canon’s still got a R5 Mark II and R1 to launch, but the bulk of their sales are in R6 and below models, and that part of the lineup feels price sensitive and just holding its own to me. One thing that tells me a lot about camera units in the future is lens units. Looking at the lens data I have available, there was a bit of a shift from Sony E to Canon RF and Nikon Z in the past year. Of course, that’s predictable, because Sony has been selling E-mount for longer and lens purchases from established Sony customers have mostly been made now, with only a bit of supplementing going on. Meanwhile, Canon and Nikon are now clearly firmly committed to mirrorless, so their mounts are getting extra sales from the DSLR-to-mirrorless conversions and their newly committed mirrorless users. That said, the Sony lens retail sales numbers I can see look a little softer than I’d expect, and the Canon/Nikon numbers look a bit stronger than I’d expect. No doubt we have a three-horse race. Sony took second place in the back stretch, but Nikon is now coming on in the turn. 

  4. Compact cameras ought to return, but only partially will. A Fujifilm X100 update seems likely in February. The question is whether or not it will be mild (same image sensor and lens) or not (new image sensor, change in lens). Right now, the X100v is still unobtainium, so it probably doesn’t matter a lot whether we get a mild or hot upgrade. However, the right upgrade choices could make this camera a scorcher (hotter than hot). I sense we’ll also see Ricoh find some minor thing to change on the GR in 2024 in order to call it “new.” So we’ll get a lot of press about new compacts, but just how new they will be is in question. Thing is, demand for “a good compact” is higher than it’s been in a while. Nikon users are still lamenting the demise of the DL. What do we put in our pockets? Oh right, a competitor’s product. Meanwhile, Canon’s PowerShot line is now the Canon NoStock line, so it’s unclear what’s happening there. Sure, the vlogging PowerShot V10 is available, but that’s not what most of us would call a compact camera. Even Sony seems to be ignoring its established RX line, other than a vlogging-specific model. There’s absolutely demand for large sensor, high competancy compact cameras, particularly shirt/jacket pocket sized (easy to always carry). I’m hoping that someone other than Fujifilm and Ricoh has figured that out, but my prediction is that 2024 isn’t the year that will happen.

  5. We'll lose more Web sites. It’s pretty obvious: two forces are at work here. On the one hand, many of those who’ve been covering photography on the Web are aging out (as am I). On the other hand, generating revenue from Web content continues to be a challenge. It takes very high quality, consistent quality, and constant production of content to be able to make the argument to readers and/or viewers that they should be paying something for it. Moreover, a lot of that “payment” is virtual, via advertising or affiliate links. Note what I said about photography software and Chinese lenses, above: they’re paying premiums to acquire customers from content sites. If the content site starts degrading, they’ll get fewer customers, fail, and everyone will suddenly have less income from those sources (disclosure: this site has no such income from direct software or lens sales).  But getting back to the first problem, I’ve noticed more and more of my aging Web colleagues asking for donations or trying new revenue-generation platforms (e.g. Medium, Patreon, etc.) in attempts to bring in the income they need to keep their sites going. My contention in media has always been—dating all the way back to the 1970’s—is that revenue follows content. Meaning that if revenue is declining, it’s probably because you’re not serving the right content. You fix revenue issues with better and more content, and finding the readers and viewers for that (which implies the content site's customer acquisition cost). As you get older, it gets more difficult to feed the black hole for content that the Internet has become, and you’re less willing to put in the effort to find new readers and viewers. What I keep seeing is friends “give up” on that and just shutter sites. Even at the high end this has been a problem. We almost lost dpreview this past year, and even though it now has a new owner that is better aligned, you can see that revenue generation is still an issue there: more ad positions have opened up, bigger ads are shown—particularly annoying on a limited laptop or mobile screen—while the content generation has gone down a notch. Circulation and ad sales is both an art and a science, but again, it’s the content that brings the readers and viewers that will see those ads. At the moment I don’t see any of the top sites that are showing absolute danger signs, but I do see a fair number of ramp ups trying to monetize the current level of content, which is usually a leading indicator of eventual failure. (If you could really ramp up revenue from ads and links on current content, that’s an indictment of your previous sales efforts ;~). 

This is an election year and at the moment the inflation-runaway actually ran away and we’re back close to where we expect to be. Most signs indicate we’ll have a relatively healthy economy in 2024, which will mitigate much of the above. At the moment, I’m not expecting any rapid change to the above. What I’ve defined is longer-term predictions that will take some time to play out in the current environment.

For the most part, my “predictions” are really just pointing out trendlines I’m watching. The old adage that a high tide floats all boats is operative in 2024. The economy seems to be high tide, particularly as far as disposable income for hobby purchases like cameras, lenses, and and software. So if you do start seeing the failures and shifts I outline above, that means the company/product/site was even more on the ropes than we were able to see from the outside. I’m betting we have a few of those boats that have real leaks and won’t survive.

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