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PhotoChannel
Networks Inc. (OTCBB: PHCHF) (TSX-V: PNI) |
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Dear Reader,
Does this sound familiar? Go to store. Stand in line to buy
film. Take pictures. Go to store. Stand in line to drop
off film for processing. Go to store. Stand in line
to pick up prints. Then realize you've wasted lots of time
and money on some really bad shots. Those days are gone thanks
to our featured company today.
PhotoChannel Networks is a perfect match for StockUpTicks
readers: established and working with some of the world's largest
photofinishing retailers, cutting edge, and yet the stock is largely
undiscovered and still trading well below its potential values.
With the recent explosion of digital cameras, camera cell phones
and printing of digital images by consumers, PhotoChannel is poised
to see tremendous growth through network partners like Costco,
Wal-Mart, Konica Minolta and Giant Eagle.
PhotoChannel's online world of photography offers retail photofinishers
the ability to provide online ordering of prints and gifting products
from digital images, through the comfort and convenience of their
home or office computers. Consumers can easily upload digital
images that can be sent directly to their photofinishing retailer
for processing or to their own personal and secure accounts for
sharing, emailing and/or storing for future use. Once photos
are uploaded, consumers can chop, crop, zoom, adjust, remove red-eye
and enhance their shots in just a few simple clicks. Consumers
are notified by e-mail when their images are ready for pickup. To
see how easy this process is, go to Costco's Photo Center
by
Clicking
Here.
That means a customer never has to pay for a bad
or unwanted photo again!
With PhotoChannel solutions in over 7,500 retail locations already,
the Company is poised to take advantage of the digital photo revolution.
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About
PhotoChannel Networks |
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From its inception nearly 10 years ago, PhotoChannel has been a
leading digital imaging technology provider. PhotoChannel
currently works with a wide variety of businesses including photofinishing
retailers, professional and commercial photo processing labs, image
content owners and targeted portal services. PhotoChannel
has created and manages the open standard PhotoChannel Network environment
whose focus is delivering digital image orders from capture to fulfillment.
PhotoChannel went public April 21, 1997, and during that same year
began to focus on digital images. Back in 1997 this may have
been considered premature, but not in the light of today's digital
revolution where the proprietary technology built since 1997 is
finally being recognized and used by the world's largest retailers.
In March 2001, the current management team took control of the Company
and turned its focus solely to the enablement of retailers and on-line
communities wishing to integrate digital photo services seamlessly
into their operations. In May 2001, the first retailer went
live on the PhotoChannel Network.
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Headquartered
in Vancouver, British Columbia, Canada, PhotoChannel has a
wide distribution network that is expanding across North America
and into the U.S.
PhotoChannel
provides two lines of imaging software for the digital
photography market:
1.
Connects the end user (consumer) with the digital mini-labs
or Kiosks used by the photofinishing retailers under a distributed
printing or wholesale model; and
2.
Connects camera phone users to the Internet and permits
users to print at retail photofinishers.
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PhotoChannel is well positioned to capitalize on the current growth
of the photofinishing industry. The Company has experienced
a 100%+ growth rate quarter over quarter through fiscal 2003
and online transactional revenue grew by 700% from the end
of Q2 2003 to Q2 2004. PhotoChannel's quarterly transactional
revenues at March 31, 2004 increased 66% over the previous
quarter and the Company is operating with a gross margin in excess
of 60%.
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The Photofinishing Industry |
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According to the Photo Marketing Association, Americans are expected
to print almost 4 billion digital images this year, up
from 800 million in 2001.
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The photofinishing industry in the North American
marketplace processes approximately 1 billion rolls of film per year.
Based on 45,000 photo retailers, this equates to over 22,000 rolls
per year per retailer or the equivalent of 85+ rolls of film per day
per retailer. The industry expects the majority of photofinishing
will be from digital images by 2007.
S$27 billion consumer
· Retailers have historically processed
95% of all prints
· All new camera sales are expected
to be digital by 2010
· Sales of camera phones will exceed
digital camera sales in 2004
· In 2003, 20% of all prints were
printed from digital media, the number is expected to grow to 47%
in 2005
• Adoption of camera phones will revolutionize
the photofinishing industry as finally consumers will be carrying
digital cameras everywhere
As camera
users convert to digital,
photofinishing
retailers must engage to prevent losing customers in this historically
high margin area.
As
camera phones become prevalent the potential for billions of new
digital images will exist.
As
the industry leader in connecting the photofinishing retailer
to its customer using an online solution,
PhotoChannel
is in the middle of the digital revolution.
Consumers Are Seeking a Low-Cost,
Reliable Alternative to Home Printing for Digital Photo Processing
This revolution is seeing drugstores, supermarkets and photo shops
installing new digital mini-labs and photo kiosks in an attempt
to sway customers from home printing, which has been stealing consumers
from the $10 billion photo developing industry.
Digital Photo consumers are poised to go to mass market photo developers
in this price-sensitive market, with prices as low as 19 cents per
digital print, compared with up to 75 cents per home print. People
are also more likely to trust photo shops to make quality prints
of a wedding or portrait shot of a new baby. The Photo Marketing
Association estimates the home printing share of all digital photo
output this year will slide to 71 percent from 84 percent a year
ago. At retail, it forecasts traditional photo developers'
share to jump to 22 percent from 9 percent a year ago.
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Photo Finishing Retailers and PhotoChannel |
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PhotoChannel technology enables uploading, organizing, editing (cropping
and red-eye correction), sharing and albuming of photos from any Internet
connection, with the ability to order prints through photofinishing
retailers. PhotoChannel's White-labeled solution is used by:
Konica Minolta USA (4,500 dealer
locations across the United States)
Loblaw Companies Ltd. (800 photofinishing
locations)
Wal-Mart Canada (231 locations)
Black Photo Corp. (168 locations)
Sobey Inc. (246 locations)
Costco USA (Texas) (11 stores
from Costco’s 327 in US)
THE MARKET AND ITS
POTENTIAL FOR PHOTOCHANNEL
· Revenues from installation, monthly connectivity and
archiving fees, along with transactional revenue (based on a percentage
of gross print value)
· 45,000 potential photofinishers in US using digital mini-labs
and thousands of potential printing sites from use of Kiosks
· Seamlessly connected to all makes of digital mini-labs
(including: Fuji; Noritsu; Agfa; and Konica Minolta)
· Analog film rolls can be scanned and uploaded to consumer
accounts in digital form, enabling future online printing
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Camera Phones, Online Imaging and PhotoChannel Solutions |
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PhotoChannel Mobility is a complete
solution to tie Telco MMS services to a network of leading
photo retailers. TELUS Mobility (Canada’s second largest
telco and Canada’s largest wireless transporter of data) is
connected through PhotoChannel to over 2,000 photofinishing
retailers in Canada.
PhotoChannel Mobility is a Carrier-Grade
imaging and messaging service that allows users to capture,
view, edit, share and print images captured on any wireless
handset or device. The service is completely branded
in the carrier's corporate trade dress and branding.
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PhotoChannel's
products and solutions enable customers
to upload
images, organize and store them.
Both
wireless and wired uploads are supported.
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The PhotoChannel Customized PhotoSite
Solution is the Company's original
& flagship digital imaging solution.
PhotoChannel’s Primary Imaging Solutions enable Photo Retailers
to successfully deploy a customized, turn-key digital imaging
platform within a very short timeframe. The basis
of these solutions is to allow the client to market online
digital image printing services to their customers.
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PHOTOCHANNEL PRINT ORDER WIZARD
The Print Order Wizard is a simple yet highly effective
tool that allows customers
to upload their images and instantly send them for printing.
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MICROSOFT WINDOWS XP PRINT WIZARD
The Microsoft Windows XP Operating System has an integrated
online print ordering feature designed to make printing
digital images at a PhotoChannel-enabled retailer exceptionally
easy. PhotoChannel has worked with Microsoft to
integrate the XP Order Print Wizard into the Customized
PhotoSite or Print Order Wizard environments.
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The PhotoChannel ProVent Solution enables
the professional photographer to utilize the power of the
Internet to market their images.
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PhotoChannel's Archiving
Solutions, allows customers to store their digital images
for future enjoyment.
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Product-based cards make a great promotional
tool. The retailer can define the value.
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The PhotoChannel Lab System is an easy
to use, web-based interface designed to manage the PhotoChannel
clients’ online printing process. |
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Recent News From PhotoChannel Networks Inc. |
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PhotoChannel
Networks Inc. Announces Warrants Exercised,
New Cash Totals
$2.3 Million
TELUS and Discovery Capital Increase Investment
VANCOUVER, BC - June 30, 2004 - PhotoChannel Networks Inc. (TSX
- V: PNI; OTCBB: PHCHF) ("PhotoChannel" or the "Company"), one
of North America's leading digital imaging technology providers,
today announced the Company has received gross proceeds of $2,315,000
from the exercise of common share purchase warrants and the completion
of a non-brokered private placement.
To read the entire news release and disclaimer, Click
Here
* * * * *
PHOTOCHANNEL
EXPANDS ITS MARKET LEADING TECHNOLOGY AND NETWORK
PhotoChannel Adds Customers, Features and Functionality
VANCOUVER, BC - May 13, 2004 - PhotoChannel Networks Inc. (TSX-V:
PNI and OTCBB: PHCHF) ("PhotoChannel" or "Company"), the global
leader in digital imaging network technology, with over 7,500 print
locations worldwide, today reports the following:
Customers Highlights The Company has recently signed and launched
or is in the process of launching in excess of 500 new photofinishing
retail locations in Canada, bringing the total to over 7,500 print
locations now available on the PhotoChannel Network. These new retailers
include:
To read the entire news release and disclaimer, Click
Here
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PhotoChannel Partners |
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PhotoChannel
works closely with industry leaders
to
add value to our solutions and open doors for rapid network growth.
TELUS Corporation is one of Canada's
leading Tier-1 telecommunications companies. In addition to being
an investor in PhotoChannel, TELUS provides PhotoChannel with co-managed
Web and data hosting, managed firewall services, data storage and
Inter networking services. Sony and
PhotoChannel have co-developed the network integration, including
Internet access, for the Sony Picture Station kiosk product. With
this service, any Sony Picture Station kiosk can have the ability
to access images from a particular PhotoChannel Network retailer
for printing locally.
With the release of the Microsoft Windows XP operating system,
Microsoft has made accessing images and ordering prints from these
images easier than ever for the consumer. Working together, Microsoft
and PhotoChannel are enabling PhotoChannel’s retailer
customers with their own, retailer branded versions of the Microsoft
Windows XP Order Print Wizard.
PhotoChannel has selected to use Oracle8i
for its database management system (DBMS). From a deployment perspective,
PhotoChannel's Enterprise System's web and application layer is
run within BEA's Weblogic clustered
web application servers, allowing PhotoChannel the flexibility to
improve performance by simply adding more servers to each server
cluster when required. PhotoChannel's technology uses Sun
Microsystem's J2EE, allowing easy change deployment and
runtime software tools and deploy on heterogeneous hardware systems.
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The PhotoChannel Management Team |
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Peter Scarth,
CEO, is the driving force behind PhotoChannel's rapid acceleration
into a completely network-centric business and bears the primary
responsibility for keeping the company focused on its mission and
markets. Prior to joining PhotoChannel, Mr. Scarth was responsible
for the business success of Telepix Imaging Inc. and its subsequent
sale to Gretag Imaging Inc. Mr. Scarth acquired over 27 years
of sales, marketing and management experience in the photographic
industry with Eastman Kodak where he served in many positions including
VP of Consumer Imaging and VP of Motion Picture.
Peter Fitzgerald,
Chairman,
has been very active in introducing PhotoChannel to his industry
connections, and will be a key player in “opening doors” for the
Company’s next big sales push into the United States. Mr.
Fitzgerald was with the Eastman Kodak Company for over 20 years
where, among other duties, he was General Manager, Worldwide Consumer
Imaging Services. During his last seven years with Kodak,
he also served as CEO of Qualex, the Kodak photo-processing subsidiary.
Under his leadership, Qualex became and continues to be the largest
wholesale photofinisher in North America.
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Financial Highlights For PhotoChannel Networks |
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The company is in early stage ramp up and
currently maintains distribution in over 7,500 retail locations.
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Industry: Computers-Software/Services
Fiscal Year End: 09-30
Transfer Agent: Computershare Investor Services Transfer
Auditors: PricewaterhouseCoopers LLP
Recent Price Price: $0.105 (07/15/04) |
52-Week High (12/09/03) 0.30
52-Week Low (07/17/03) 0.04
3 Month Avg Daily Vol (OTCBB): 53,093
3 Month Avg Daily Vol (TSX): 177,314
Shares O/S: 158,437,341 (as of 06/30/04) |
PhotoChannel
Network is a publicly-owned corporation trading on the OTCBB exchange
under the ticker symbol PHCHF for the common stock. It also trades
on the Toronto Venture Exchange (Canada) under the ticker symbol
PNI for the common stock.
 
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PhotoChannel Price
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PhotoChannel
vs.
SPX Sector Returns |
To view the latest filings from PhotoChannel on the SEC
Web site, Click
Here
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CONTACT |
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PhotoChannel Networks
Inc. Headquarters
506 - 425 Carrall St., Vancouver, B.C. V6B 6E3, Tel: 604.893.8955
SALES AND BUSINESS DEVELOPMENT INQUIRIES
BusinessDevelopment@photochannel.com
InvestorRelations@photochannel.com
Visit the PhotoChannel Web site at http://www.photochannel.com.
***
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not be reproduced in whole or in part without the express written
consent of Market Pathways Financial Relations Incorporated.
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