Slate analyzes pricing of graduation photos

Slate did an extensive report, “Graduate Through the Gift Shop,” analyzing the history of graduation photography, particularly at the college level. Reporter Henry Grabar did an extensive deep-dive into GradImages and other volume photography companies. Like a lot of modern consumer reporters, Grabar balks at the price for a professional photo capturing a once-in-a-lifetime moment.

“A graduation photo might seem like a small souvenir of a big achievement,” he wrote. “In reality, it’s the product of a multimillion-dollar business built to cash in on your proud moment.

“Several years ago, I attended my wife’s graduation from a grad program at a large research university. High school, college, med school, it’s all the same: You dress up, get there early, sweat in the sunshine, and holler like hell when the grad’s name gets called. You settle for a crappy phone picture of the jumbotron.

“Fortunately, two black-suited photographers were on the scene to capture the dean’s handshake up close, as well as shoot a pair of official-looking portraits against a forest of flags.

“Unfortunately, the resulting shots belonged not to the university or its graduates but to a company called GradImages. We could download the photos—for $39.95 apiece. Why did a JPEG of this proud moment cost as much as a steak dinner? And why was the university nickel-and-diming us over the photos of my wife getting her diploma? It felt like a fee for something she and her classmates had earned, or even, in some sense, paid for through their tuition. This was a commencement, not a log flume.

“Search for GradImages online, and you’ll find no shortage of similar gripes on sites like Yelp, on which the company has a 1.4 rating; or Reddit, on which graduates vent and scheme to outsmart the company’s watermarks with A.I.”

School and university officials, however, were quick to counter with a testament to the value of volume photography companies like GradImages.

“I can tell you why we don’t do it,” said Melissa Goitia, the director of university ceremonies at Arizona State University. “We’re taking thousands of photos over the course of a week at multiple events. A company like GradImages is very well-versed at taking lots of photos at a quick pace. Very few institutions have the staff to do it.”

Grabar then did a historical overview of the graduation photography market, describing GradImages’ rise to a company that captures nearly 2 million graduates at 6,000 commencements and related events each year in the U.S. and Canada.

Optimal price

As part of the history, the writer conferred with Christopher Snyder, a professor of economics at Dartmouth, about setting the “optimal price” for the photo companies, which might be one at which relatively few grads buy a picture. Economists call this phenomenon deadweight loss. “Getting 10 percent of students to buy at $40 is worth more than having 70 percent of students buy at $5,” said Snyder. (OK: 10 x 40 = 400; 70 x 5 = 350.) “The high-demanders are cutting the low-demanders out of the market. You’re losing a lot of social surplus—a lot of willingness to pay is being lost.” But you can’t charge two different prices to the same set of buyers.

“Our prices for our products are reflective of this type of photography and are competitive or lower than our competitors’,” said Bill Campbell, vice president of event management and photography services at GradImages’ parent company, Balfour, in the article. “Photography is such a unique business, in that images are so very personal, capturing the essence of a person, and they may not always come across exactly how the person wants or how they felt in that moment.”

Even if less than half the class is buying, it’s a business. After acquiring the company now called GradImages in 2007, private equity investors boasted that they had nearly tripled its revenues in a decade. The next sale, in 2018, put the outfit’s value at $64 million. In 2021, GradImages was bought again and placed under the collegiate souvenir clearinghouse Balfour, with a new majority equity holder, New York–based PE giant Cerberus Capital Management. It’s part of a pattern: Another PE shop, Apollo Global Management, owns Shutterfly, which operates school photo giant Lifetouch.