Note: I wrote the attached post November 13, 2015 but did not publish it because of the court case related to the Creative Memories employee stock ownership plan. The judge that presided over the case now concluded that the potential effect of digital technology was considered in assessing the value of the company at the time of the transaction in 2003 and that management was not required to disclose potential negative consequences of the transaction to employees; consequently, the lawsuit was decided in favor of Creative Memories management. Of course, there were many more issues involved in the case, as well. This post is nonetheless an interesting reflection on the development of digital technology and its effect on Creative Memories.
Nobody could tell you that Facebook was going to be what it is. No one could tell you — no one is going to come in the courtroom and tell you that anyone then foresaw photographs on cell phones of the quality you see today and the expansion of broadband and cellular networks that allows instantaneous sharing of photographs and multiple photographs built into albums. It just wasn’t available in 2003 and wasn’t foreseeable.
Michael Scheier, Fish et. al. v. Greatbanc Trust Company, Lee Morgan, Asha Morgan Moran, Chandra Attiken, and Morgan Family Foundation, November 2, 2015
In his opening statement, Michael Scheier made the impassioned statement that nobody in 2003 could foresee what happened with digital photography, and specifically with mobile imaging in 2003. Interestingly, I had given a presentation at the Creative Memories 2003 Strategic Planning Session that included precisely this subject. This presentation included five technologies that will drive image preservation, with number one being camera phones.
In 2003, camera phone sales in the U.S. were 3-4 million, with the forecast that sales would increase to 15-20 million units in 2004. In addition, image quality was predicted to rise, with three megapixel sensors forecast for 2004. At three megapixels, consumers are generally satisfied with image quality, and digital cameras begin to replace film. Finally, in 2003 the revenue opportunity for telecommunications and photo processing industries was also clear.
In 2003, the outlook was clear. According to Alex Gerard, President, Future Image, camera phones were about to become a “global phenomenon.” or as Tony Henning stated, “This is going to become the most common picture-taking device on the planet.”
The rise of the camera phone was inevitable, and to say that it could not have been predicted in 2003 is clearly not correct.