Kodak Gallery closing; billions of images to be transferred to Shutterfly


posted Monday, May 7, 2012 at 2:48 PM EDT

Kodak Gallery's logo. Click here to visit the Kodak Gallery website!News from Eastman Kodak Co. today brings closure to a decade-long battle between two of the biggest names in the online photo sharing / photofinishing business. The public debuts of both Ofoto Inc. and Shutterfly Inc. on the very same day back in December 1999 set them up for a head-to-head fight, and Shutterfly now emerges the victor as it purchases the remains of its one-time rival from current owner Eastman Kodak Co.

Kodak absorbed Ofoto in mid-2001, renaming it as the EasyShare Gallery, and later simply as Kodak Gallery. At the time, the takeover seemed to give Ofoto a huge edge over Shutterfly, gifting it with the most instantly-recognized name in the photo business. Unfortunately, although it expended significant energy on promoting its Gallery service over the years, Kodak was never able to turn its acquisition into the profit center it had hoped for.

With Kodak itself now in bankruptcy, it's been clear for a while that quite a few of the company's less profitable ventures would be sold off or shuttered, and Kodak Gallery was an obvious candidate. A couple of weeks ago, Shutterfly was the sole bidder for Kodak Gallery assets including the company's US and Canadian customer lists, offering up some US$23.8 million. Pending bankruptcy court approval, Kodak indicated its intent to close the sale, and the court has now given its nod to the deal.

Effective July 2nd, 2012, Kodak Gallery will be no more. Customers who don't choose to opt out beforehand will then receive an email from Shutterfly, detailing the transfer of their images from Kodak's shuttered service to its new owner. It's not clear precisely how many photos will be transferred, although the number is certainly huge, even though Kodak regularly purged photos from dormant accounts. Different pages on Shutterfly's site alternately suggest either five billion or nine billion images are to be moved. (Based on the US$23.8 million paid by Shutterfly, that's a pricetag of somewhere between one quarter and one half-cent per photo transferred.) An idea of the scope of this task can be found in the fact that Shutterfly suggests it expects the transfer process to take as long as several months, even with thousands of users being  migrated each day.

Those who don't wish to have their photos transferred to Shutterfly can opt out thru late May, but you'll have just eight weeks to either download your original photos from Kodak Gallery, or to purchase DVD archives. If you don't opt out, then you must simply wait for your images to be transferred and a Shutterfly account to be created for you. If you already have accounts with both Shutterfly and Kodak Gallery, you can link these now through the Shutterfly site, to ensure your Kodak Gallery images end up in your current Shutterfly account. (From late May, it will also be possible to link multiple Kodak Gallery accounts to a single Shutterfly account.)

There's no charge for the transfer, but note that once photos are transferred, the only way to obtain full-resolution originals will be to purchase a Shutterfly archive DVD; the company doesn't currently offer full-sized image downloads. It's also important to note that gift certificates, credits, etc. from Kodak Gallery will not be transferred to Shutterfly, and so if you don't use these before the closure of Kodak Gallery, their value will be lost.

More details can be found in the Shutterfly Help Center.

Press Release

Shutterfly Welcomes Kodak Gallery Customers

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Shutterfly, Inc. (NASDAQ:SFLY), a leading Internet-based social expression and personal publishing service, today officially welcomed Kodak Gallery customers to Shutterfly. Shutterfly recently acquired certain assets of Kodak Gallery's online service, including U.S. and Canadian customers and their images as part of Kodak's broader restructuring efforts. Working together with Kodak Gallery over the coming months, Shutterfly will securely transfer every Kodak Gallery customer photo, more than five billion in total, to the Shutterfly platform, free of charge. Once Kodak Gallery customers activate their Shutterfly account, they will benefit from the full range of Shutterfly's industry leading services, including free, unlimited storage of original resolution photos and a 100 percent customer satisfaction guarantee.

"I am thrilled to welcome millions of Kodak Gallery customers to the Shutterfly family. Our priority is to ensure every photo gets safely and securely transferred to Shutterfly," said Jeffrey Housenbold, president and chief executive officer of Shutterfly. "We promise to make the transfer process very easy for customers and will communicate our progress every step of the way. I want to thank Kodak Gallery customers for trusting Shutterfly with their precious photos and look forward to helping them enhance the way they share and preserve memories."

Kodak Gallery customers have until May 28 to choose to opt out of moving their photos to Shutterfly. After May 28, Kodak Gallery customers will have the opportunity to link their Kodak Gallery account to a newly created or existing Shutterfly account. Over the coming months, their photos will automatically be transferred to Shutterfly, free of charge.

To learn more, visit www.shutterfly.com/kodaknews

About Shutterfly
Founded in 1999, Shutterfly, Inc. is an Internet-based social expression and personal publishing company and operates Shutterfly.com, Tiny Prints.com, Weddingpaperdivas.com and Treat.com. Shutterfly provides high quality products and world class services that make it easy, convenient and fun for consumers to preserve their digital photos in a creative and thoughtful manner. Shutterfly's flagship product is its award-winning photo book line, which helps consumers celebrate memories and tell their stories in professionally bound coffee table books. Shutterfly was recently named one of the top 25 Best Midsized Companies to Work For by the Great Place to Work Institute. More information about Shutterfly (NASDAQ:SFLY) is available at http://www.shutterfly.com.