I’ve long been a big fan of Ofoto and have been using the site for storing and printing photos since December 2001 (before that, we used Photoworks and, briefly, Snapfish). Ofoto is, by far, the best in terms of online storage (super-fast site) and print quality.
With nearly 6,000 high-resolution photos currently stored in the Ofoto archive, I’ve often wondered how they manage to offer free storage and sharing — and only charge customers for the prints and other photo-related goodies they order.
This excellent article (Ofoto on a Roll) answers that question. Some snippets:
While Ofoto — a subsidiary of the Eastman Kodak Company — counts over 11 million members, only about 1 million have ever bought anything from the site, such as a print, calendar, or greeting card. The other 10 million members are simply posting, sharing, and viewing their photos. These activities are free, but for Ofoto, they can get expensive.
A 5-megapixel digital camera can produce 1MB JPEG files, so just a handful of photos can require sizable storage space. There are some 300 million images residing with Ofoto, and that number is growing. In 2003, the company counted several days when users uploaded more than a million JPEGs. “We have huge numbers of terabytes of storage to which we’re constantly adding,” says James Joaquin, executive vice president of Ofoto.
Why keep giving away so much space? For Ofoto, storage is a loss leader. “The more photos users send us,” says Joaquin, “the more they share, the more we print.”
The goal is to get more of the 10 million share-only users to join the 1 million paying users. To encourage them, Ofoto has made some careful decisions. For example, it shuns tape backup for storing old photographs. Everything — from the vacation snapshot you uploaded yesterday to the family portrait you shot four years ago — is stored on hard drives.
