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The industry’s largest recent acquisition – Shutterfly buying Lifetouch – created waves and, in the case of iMemories, new opportunities. The former Lifetouch segment was sold back to its founder, Mark Rukavina, and longtime executive Steve Krell, who are looking to expand the business dramatically. The Dead Pixels Society recently talked with Rukavina about the divestment and the future of memories conversion business.
Rukavina says iMemories was started in 2006 as a platform to digitize home movies and pictures. The 150-person business recently moved into a new 40,000-square foot facility in Scottsdale, AZ. While the business does have a strong direct-to-consumer push, along with a retail footprint in 12,000 stores, thanks to partnerships with Walgreens and UPS stores.
“I love the business,” says Rukavina, a three-time serial entrepreneur. “This business has a very long runway: There’s a trillion photos and a billion home movies. There’s so much content, there could be 50 more years.”
Rukavina says this optimism led the company to sell to Lifetouch in May, 2016. “Lifetouch was a terrific company to be acquired by,” he explains. “We thought we could help them with their strategy. For 80 years, they were the largest portrait company in the school and churches segment, and iMemories was destined to be their digital delivery platform. I really enjoyed working with them.”
In the past two years, iMemories invested in technology across mobile and desktop apps, building a soon-to-be launched 3.0 web experience.
When Shutterfly purchased Lifetouch, however, iMemories’ platform was made redundant by the acquirers’ own successful platform. “It didn’t make sense for Shutterfly (to keep iMemories),” explains Rukavina. “Their primary goal is to integrate Lifetouch business.”
Optimism drives the business
Rukavina says he and Krell are so optimistic about the future opportunity in the memories conversion business, they bought the company back, rather than pursue another startup.
“This is the first time I’ve reacquired a previous acquisition,” he says. “It’s a once in a lifetime thing.”
The enormous potential of the analog-to-digital conversion business, coupled with the barriers to entry for competitors and do-it-yourselfers, put the iMemories in a strong market position, he claims.
“[Digitization] doesn’t lend itself to being done yourself,” he says. “Home movies are very complicated, and too hard for most people. Our advantage is iMemories is the biggest technology play in the industry, and we’re excited about going to 3.0”
iMemories still offers transfer to physical media, but the future of the company is in storage and in streaming.
“Every [competitor] does home movie [conversion] to DVD and hard drive, but modern consumers want more,” say Rukavina. “Nobody really needs a DVD anymore. Why spend money to transfer from one obsolete format to another? Some consumers will do it, of course, and DVDs make good gifts.”
Instead, iMemories has the ambitious goal of becoming the “Netflix of home movies” with new updated apps and services. “Our apps are more feature-rich and easier to use,” he claims. “The web app is completely responsive, and we are aligning to today’s multi-screen environment, including smart TVs. iMemories will support AppleTV, Chromecast and other streaming devices.
“Home movies and photos have every bit of entertainment value for a family that Netflix has, but the TV is a tough screen to get to,” says Rukavina. He estimates the company has invested $30 million in technology over the past 12 years.
A platform for all memories
iMemories is also a platform for consumers’ current digital photos and videos. Mobile apps will automatically upload to the iMemories Cloud service, with desktop uploaders coming soon.
“Our platform has always uploaded digital photos and videos that are current, offering a lifetime of memories at your fingertips,” he says. “We love both sides of the equation.”
The business model is simple, with a fee-based service for digitization, along with the iMemories Cloud storage fees.
“We keep it simple,” says Rukavina. “We don’t want the customer to think about it. We offer a 30-day free trial, allowing people a lot of time to use the service.”
What won’t iMemories do? Printing, photo books or any output services.
“I learned a long time ago not to chase a titan like that. Shutterfly, Snapfish and so on are too entrenched,” he says. “We are going to be stay focused on digitization, on cloud storage and on streaming and to be the best in the world.”