Legacy Republic takes YesVideo, with its services for digitizing photos, videos, and movies, into the direct sales world. In fact, they have invested $6 million in its creation. including hiring one of the former employees from Ahni and Zoe by Creative Memories.
The same products that Legacy Republic offers are available elsewhere, through Costco, Walmart, and Target. Offering these products through both channels may work for the time being, but eventually Legacy Republic will have to choose between retail and direct sales. As Creative Memories’ experience with Webway photo albums has shown, direct sellers are not tolerant of similar products being available through multiple channels. In fact, with similar products available through retail stores, Legacy Republic will have difficulty justifying the premium pricing that direct sales requires.
Direct sales companies generally rely on overall market growth to increase the number of sales people and grow their sales. These companies face a high turnover in their sales force, with some companies exceeding 100% turnover in a year. Unfortunately, the potential market for digitization is already capped, since most consumers are no longer using film or video tape, and a declining market is unlikely to generate the required growth.
I do not know whether Legacy Republic will succeed, but I do know that the company will face significant challenges in the future.