Filmless Photography Threatening Silver Markets

BY KENT KISER

Kent Kiser is associate editor of Scrap Processing and Recycling.

Mark Twain may have coined the phrase, but if traditional silver-based photography could speak, it too might say, "The reports of my death are greatly exaggerated." In fact, although electronic imaging is certainly challenging silver-halide film in a variety of photographic applications, no one seems ready to read the 156-year-old technology's eulogy just yet.

Nevertheless, many of those who are most affected by this battle—including photographic product manufacturers, silver scrap recyclers, silver producers and refiners, and users of photo-related products—are wagering that while silver-based film will continue to dominate most photographic markets for at least the next decade or two, electronic imaging will increasingly share the market. "No matter where you look, there are the beginnings of electronic systems or full-fledged use of electronic systems," says an industry consultant. Others boldly bet that by 2010, people will no longer be using silver-based film cameras, that photography will be totally electronically based.

Even if the shift isn't quite that drastic, the effects on the silver industry won't go unnoticed. After all, photographic products represent silver's largest market, with photographic films and papers accounting for 45 percent—or 186 million troy ounces (t.o.)—of annual silver demand (excluding coinage) in 1992 in the United States, Japan, and Western Europe, according to the Silver Institute (Washington, D.C.). The contest is equally important to recyclers because the outcome could reduce the supply of silver-bearing photographic films and solutions available for recycling. (For a discussion on photographic silver recycling, see sidebar.)

Silver-based photography traces its roots to Louis Jacques Mande Daguerre and his Daguerreotypes, introduced in 1837. Throughout the decades, silver-based film has built its strength on three main markets: amateur and professional; X-ray; and printing/graphic arts. Of these, the amateur and professional market is the largest, accounting for 44 percent, or about 82 million t.o., of silver demand in 1992, according to the Silver Institute. X-ray film—encompassing medical, industrial, and dental uses—is the second largest at 34 percent, or approximately 63 million t.o., of silver demand, with medical applications claiming the lion's share at 46 million t.o. The printing/graphic arts business is the third largest photographic segment, with a 22-percent share of the market based on 1992 silver demand of about 41 million t.o.

The first electronic camera prototype, meanwhile, was introduced in 1982 and offered commercially in 1986. Electronic cameras are classified as either still video—as opposed to moving video—or digital, depending on how the camera records images. Still video cameras capture images in analog format on video floppy disks, whereas digital cameras record images in a digital format on a computer disk in the camera or an attached computer drive. Still video images are viewed by hooking the camera up to a television set, while digital images are displayed by plugging the camera or its memory drive into a computer. Currently, seven firms offer electronic cameras, ranging from amateur models to professional-quality systems: Canon U.S.A. Inc. (Lake Success, N.Y.), Dycam Inc. (Chatsworth, Calif.), Eastman Kodak Co. (Rochester, N.Y.), Fuji Photo Film U.S.A. Inc. (Elmsford, N.Y.), Leaf Systems Inc. (Southborough, Mass.), Logitech Inc. (Fremont, Calif.), and Sony Corp. of America (Park Ridge, N.J.).

Thus far, electronic imaging has had minimal effect on the amateur photography market, but it's beginning to land some blows in the professional, medical, and—especially—printing segments. Still, its long-term success—and its effect on silver demand—depends on many factors, ranging from the quality of the image produced to ease of transition.

Image Quality. "When it comes to high-quality pickup of an original image, there's nothing even in the universe of conventional photography," says Barry Harrand, director of marketing research for the Photo Marketing Association International ( Jackson , Mich. ). As proof, consider this: A black-and-white photo is said to contain between 6 million and 8 million pixels (pieces of information), and a color photo can have up to three times as many. In comparison, the typical electronic camera can record less than 500,000 pixels, and even the best can record only 4 million pixels. "Silver-halide film has a greater information storage capability than anything else we know," says John Larish, president of Jonrel Imaging Consultants ( Rochester , N.Y. ), a photographic industry consulting firm.

Even so, electronic imaging is already claiming a share of some professional still photo niches in which electronic image clarity and color is adequate. For example, for publications that don't require National Geographic quality, including many magazines, trade journals, catalogs, and ad supplements, electronic quality can suffice, and any loss of quality may be compensated by advantages on the electronic side.

Cost. The fact is that conventional film cameras cost much less than electronic cameras, with typical 35mm cameras going for $100 to $1,000 compared with $1,000 to $3,000 for still video cameras, $7,000 to $12,000 for digital models, and $20,000 to $50,000 for professional-quality electronic systems. "There are no inexpensive electronic cameras for the amateur," Larish says, "and they probably won't reach that point for another 10 to 20 years."

With electronic cameras, there can also be the cost of peripheral equipment, as electronic systems can require separate devices to display and print their images, which doesn't seem to be much of a bargain—for amateurs, at least—compared with the low cost of silver-based film and developing. "As long as you can get excellent color prints from traditional systems at less than 1 percent the cost of digital camera systems, silver-halide systems will take most of our pictures," asserts a Kodak executive.

In professional, commercial, and medical applications, however, the cost of electronic systems may not be a deterrent if the equipment reduces or eliminates film-related costs—which can be significant—and improves productivity. In the medical field, for instance, cost-containment is a megatrend as evidenced by the Clinton administration's health care reform plan. In response, some hospitals are converting to electronic imaging because it cuts their substantial costs related to X-ray film purchases, developing, and duplicating.

In the prepress and printing businesses, electronic systems reportedly increase productivity by reducing the number of steps—and, thus, time—needed to go from an original document to a printing plate, eliminating much manual prepress work in the process. Some electronic scanners, in fact, enable printers to directly engrave gravure printing cylinders and directly expose printing plates with laser beams. "A lot of the intermediate steps have been replaced, so the amount of raw film we're using has been greatly reduced," says Dave Anderson, general manager of Techtron Dallas ( Dallas ), a prepress services firm. "More and more, we're receiving digitally captured images as original data. Eventually, we won't be receiving film as original art."

Versatility. Electronic imaging enables users to manipulate images, which can be invaluable in the professional, graphics, and corporate markets. "Just as the 1970s and 1980s were the decades of word and data processing," Harrand says, "the 1990s will be the decade of image processing."

Electronic images can also be captured and displayed instantly on-screen or transmitted as computer data via telephone lines or satellite to remote locations. This is particularly helpful in the time-sensitive publishing industry, as well as in the health care business since patient records must often be shunted between facilities. Amateur photographers may also be attracted by the "immediate gratification" offered by electronic systems—even more immediate than one-hour film developing.

Storage. No doubt about it, electronic imaging can offer more compact storage and more convenient archiving than the conventional silver-halide approach. Current electronic systems, for instance, can store 50 to 100 images on one video floppy disk or computer drive, and soon users will be able to digitize 800 pictures and put them on a compact disc (CD) for a few dollars. This is especially appealing to printers and hospitals, which must devote considerable time, money, and space to film archive management (some X-ray films, for instance, must be stored for five to seven years).

If images don't need to be stored, electronic systems enable the user to delete a single image or an entire disk-worth in order to add new images, which means that disks and CDs can be reused many times, unlike traditional film.

Environmental Impact. Just as Achilles had his heel, silver-based photography has its vulnerability: to environmental regulations on the disposal of silver-bearing solutions. The Clean Water Act's National Toxics Rule stipulates that photographic solutions are deemed hazardous if they have more than 5 parts per million of total silver content, and many states and cities have more stringent levels—as low as a zero-discharge limit in Reno, Nev. Traditional photographic byproducts may also contain other potentially hazardous metals such as cadmium, chromium, copper, lead, and zinc.

In contrast, since electronic imaging systems don't use silver to record images and don't use conventional developing processes, they generate no silver-bearing solutions and are, therefore, free from such regulatory constraints. This fact could prompt photofinishers, printers, and hospitals—all of whom must abide by effluent regulations—to lean toward electronic systems in the future.

Habits and Infrastructure. Electronic imaging has an uphill battle when it comes to changing user habits and the existing film-based infrastructure. In the medical field, for instance, most radiologists reportedly prefer to work with silver-based X-ray film. Larish asserts, however, that "doctors are slowly but surely learning to look at cathode ray tubes." And when it comes to infrastructure concerns, most prepress/printing houses, photofinishers, and hospitals have significant investments in film-related equipment and can't easily, quickly, or inexpensively switch to electronic systems.

Another problem is the lack of standards for the use of electronic imaging, especially in the printing and medical industries. Such standards must be created before the technology can truly reach its potential. "There are myriad issues that must be addressed before you see the end of silver-based film," Anderson says.

On the other hand, there are a few trends in this area working in electronic imaging's favor. As more businesses and households install computers with image-handling capabilities—such as desktop publishing systems—and as fiber optic cable is patched into more homes, electronic imaging is likely to gain ground, with mature markets such as the United States being most affected. In the future, Larish speculates, people will be able to cost-effectively print their electronic snapshots at home or give their digital images in some form to their neighborhood photofinisher for printing. At work, the growth of computer systems will lead people to use electronic images in their documents the way they use type now, says one software executive, who adds, "With people becoming more visually literate, the demand for electronic pictures will increase."

While electronic imaging and silver-halide film are competitors, they don't have to be mutually exclusive, many industry observers say. In fact, they can be complementary, or, as Harrand says, "They make almost a perfect marriage." Kodak, for one, has tried to prove this with its Photo CD system in which images are captured using traditional silver-based film, but the images are then copied onto a CD-ROM for display on a television or computer. This "hybrid" system, aimed at the amateur market, is designed to offer a best-of-both-worlds scenario, combining the benefits of silver-based photography—high image quality, inexpensive developing, and ease of operation—with the culpabilities in image manipulation, image transfer, and compact storage offered by electronic systems. "There's a synergistic effect between the two technologies," says Thomas J. Dufficy, executive vice president of the National Association of Photographic Manufacturers (Harrison, N.Y.). "They're going to grow together."

Perhaps. But what does all this mean in terms of silver demand and, thus, for silver recyclers?

In the short term, virtually all photographic markets are expected to show growth in silver demand, driven by the growing use of silver-based film, particularly in the amateur sector. This growth, however, may be slower than in previous years due, in part, to competition from electronic systems.

The greater threat to silver demand lies in the long term, when electronic systems could increasingly monopolize some markets and carve out a significant share of others, potentially cutting silver consumption in these areas.

In the amateur and professional market, electronic imaging's progress will depend on its ability to offer higher-quality images for much lower cost, which only seems to be a matter of time. As one industry consultant observes, "Silver-halide photography will continue to be the main imaging system in the amateur and professional sector for the next five years, but hybrid and pure electronic systems will have a growing share of an expanding market."

In the medical field, the demand for radiographic services is expected to grow to keep up with the diagnostic needs of the aging baby boomers, and electronic imaging will likely replace many film-based X-ray systems in the future. Filmless hospitals are already a reality, and filmless prepress and printing operations will certainly follow based on productivity, environmental, and customer-service reasons.

Future photographic silver demand will also be affected—perhaps negatively—by how electronic systems print their images, whether on silver-based or silverless films and papers. Also working against silver are ongoing efforts by film manufacturers to reduce the amount of silver in their emulsions, efforts that have already affected the market.

In silver-halide film's favor, however, is its well-earned reputation for image quality and cost-effectiveness, as well as the potential opening up of new worldwide markets, especially China . "Since less than half of the world's population has yet to take a picture, the growth potential for conventional photography remains enormous," Dufficy says.

Most likely, the market will change slowly—an evolution rather than a revolution—with the current silver-film-dominated market becoming, first, a shared market and then an electronically dominated market. How long will this take? At least 10 to 20 years, most predict, but this change will surely come. "I think that film and digital photography will coexist for a long time, but in five years consumers will start taking pictures electronically," says an imaging expert. "The 156 previous years of photography will continue to be viewed largely as silver prints but, increasingly, the new images will be digital."

So, while silver-based film remains alive and kicking for now, it is sure to face many contests with electronic imaging in coming years. And though electronic technology could eventually dominate, it's unlikely that anyone will throw away a Nikon anytime in the foreseeable future.

Silver is recovered in the photographic industry from three main sources: processing solutions; manufacturing film scrap; and discarded black-and-white radiographic and graphic arts films. Of the 148 million t.o. of silver reclaimed worldwide in 1992, processing solutions accounted for 104 million t.o.; manufacturing scrap, 34 million t.o.; and discards, 10 million t.o., according to the National Association of Photographic Manufacturers.

Virtually all photofinishers, prepress/printing houses, and hospitals recover silver from their photo processing solutions. After all, recovering silver from solutions has been so economically lucrative in the past that some photofinishers reportedly were making more money from their silver than from their developing services. And even today, while silver prices are in the doldrums, effluent discharge regulations makes recovery attractive from an environmental standpoint.

Most use electrolysis, metal replacement, ion exchange, or chemical precipitation to recover silver from their solutions, producing a flake that usually ranges from 90- to 97-percent purity. The flake is then typically sold to a refiner or precious metal recycler, who sells it to refiners in flake form or processes the flake further, often melting it into 1,000-t.o. bars.

To recycle silver-based films, recyclers use two methods, with the most common being enzyme stripping, which uses enzymes to slough off the silver-bearing emulsion from the plastic film backing. The resulting sludge must then be run through a furnace to recover the silver. This process is a variation of the once-prevalent cyanide stripping approach, in which silver emulsion was dissolved in a cyanide solution and then electrolytically pulled from the mixture. The other prevailing recycling method is pyrometallurgical recovery, whereby scrap film is burned to an ash and ash is refined further to recover the silver.

While the photographic silver recovery business will continue along these lines in the near term, some recyclers already see the market changing, as electronic imaging replaces silver-based film in some applications. "We've had printing accounts that have gone over to electronic imaging," says Allison Sloan, executive vice president of Sloan Precious Metal Co. (Chicago). "From a scrap standpoint, it does us no good because there's no silver. It cuts us out of the picture."   —K.K.

Electronic imaging is battling traditional silver-based film in several photographic markets. The long-term outcome could have a serious impact on silver demand, as well as silver recycling efforts.