Copyright Graphx Inc 2007. All Rights Reserved 1 Introducing Photogize Producer! The New Market...

Copyright Graphx Inc 2007. All Rights Reserved 1

Introducing Photogize Producer!

The New Market Opportunity for Consumer-Personalized Photo DVD/CD Publishing

August 2007


? ? ? ?New Photo Discs Products?

A High Growth Photo Disc Market?Is this a Good Business Opportunity

For My Store in 2007?

? ? ? ?


Fact #1: CDs/DVDs generate the highest total revenue of any custom photo product today

$23

$81

$87

$101

$111

$0 $25 $50 $75 $100 $125

Posters

Photo Books

Tshirts, Mugs, Mpads

Calendars

CDs/ DVDs

Million of Dollars - 2005

Source: PMA Marketing Research, 2007Includes online and retail sales


Fact #2: CDs/DVDs* generate higher average revenues than many products today

$15.73

$20.54

$26.47

$31.04

$32.18

$32.89

$39.92

$0 $10 $20 $30 $40 $50

Mousepads

Mugs

Posters

PhotoBooks

Christmas Cards

Calendars

CDs/ DVDs

Average Sale Price - 2005

Source: PMA Marketing Research, 2007* Weighted avg. price of online & retail CDs/DVDs


Fact #3: Custom Photo Products are forecast to grow 37% this year

$270

$462

$694

$951

0

200

400

600

800

1000

2004 2005 2006 2007

Millions of Dollars

Source: PMA Marketing Research, 2007


Fact #4: Use of online photo ordering increases to 24%, vs other means

Share of Methods Used to Print Digital Photos

% of Total Prints

56% 49% 41% 36%

34%38%

39%40%

10% 13% 20% 24%

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007

OnlineRetailHome

Source: PMA Marketing Research, 2007


2006-07 US Household Penetration Rates of Photo Viewing Devices Versus Photo Discs

8%

59%

73%

81%

27%

0% 20% 40% 60% 80% 100%

Photo DVDs***

Photo CDs***

DigitalCameras**

PCs*

DVD Players*

Photo Discs Viewing Devices

Fact #5: The Photo Disc Market Has Huge Growth Potential Ahead!

Sources: * Nielsen Media Research Home Technology Report, 2006; ** PMA Marketing Research, 2007; *** PMA Marketing Research, 2006. 114 Million US Households in 2006

10X DVD Players in the US households versus Photo DVDs!


Why the low penetration of Photo Discs today?

1. It’s difficult & time consuming for consumers to create at home

2. Retailers offer high priced ($100+) manually-produced DVDs, …or

3. Low priced photo CDs for archiving, but NOT for viewing, sharing, & enjoying.

XXX Change XXX

XXX This XXX

XXX Market! XXX


Our Vision:

Establish Photogize DVDs and CDs as the new Everyday Fulfillment Products

for digital photo consumers Premium Quality Products, with new features Much more than a photo archive …designed

for Personal Viewing, Sharing, & Enjoying New consumer prices- $10-30, with higher

retailer margins! To complement & cross-sell with photo prints


Photogize Disc Producer System

A Double-Barreled Breakthrough!

1. Easy for the consumer to create personalized premium-grade DVDs and CDs online

2. Easy for the retailer to produce: Automated in-house production of 10-15 discs per hour, at lower cost


Photogize DVD- An 8-Part Premium Product

1. Consumer’s original photos at full resolution

2. A Music track the consumer picks from our library

3. Photogize DiscViewerTM S/W - Photo & Music slide show for WinPC & Apple Mac. Same UI as online.

4. A Photo & Music DVD Movie - for TV/DVD viewing!

5. A Consumer-personalized, full-color photo label printed directly on the disc

6. Consumer-personalized, full-color DVD case cover

7. 5x7 Index Prints- included in the DVD case

8. An “Order Prints” button & link to the online album



Multiple Customer Uses…

Share a Memory at an event The new way to view, share & enjoy digital

photos with family & friends

Preserve a Memory of an event A highly-valued keepsake to view and

archive, or to give as a gift

A Better Shoe-box scanning product The new retail product for consumers

converting photo prints to digital files


Share a Memory at an Event

Create a Personalized Photo Disc Before an Event, to View & Share at the Event Family celebrations- HS Graduation, Wedding

anniversary, Mother’s Day, Father’s Day Reunions- School, Family, or Friends Youth & local sports- team banquets Religious celebrations Notable birthdays: 13, 18, 21, 30, 40, 50…etc Funeral or memorial serviceAnticipate high demand for multiple disc orders


Preserve a Memory of an Event

Create a Personalized Photo Disc After an event, for viewing, archiving, and gift giving Births & Birthdays Family vacations School events and graduations Youth sports Holiday Celebrations- Mothers Day, Fathers

Day, July 4, Thanksgiving, Christmas Attendance at a wedding



Photogize Producer Model 250:A Full System Solution

Software Online Consumer UI PC & Mac DiscViewer

software In-lab Order Publishing Consumer Kiosk UI

(10/2007)

Hardware Primera Bravo XRP

($5K List) - disc burning & direct on disc printing

HP OfficeJet Pro K550- DVD case covers

Model 250 List Price is $8,995.

Special Intro Price of $6,995. through Aug. 31.


See the Retailer Profits in Premium DVDs & CDs!

Retailer Cost

Retail Price

Retail Margin $

Retail Margin

%

Photogize CD

CD Disc Media $0.79

CD Disc Ink $0.25

CD Case $0.36

TOTAL $1.40 $9.95 $8.55 86%


See the Retailer Profits in Premium DVDs & CDs!

Retailer Cost

Retail Price

Retail Margin $

Retail Margin

%

Photogize DVD

DVD Disc Media $1.03

DVD Disc Ink $0.25

DVD Case $0.39

Case Cover Ink $0.40

DVD Case Insert page $0.12

(2) Index Prints @.10 $0.20

TOTAL $2.39 $14.95 $12.56 84%


Business Justification

Retailer

Cost

Retail Price

Retail Margin $

Retail Margin

%

Producer System

Purchase Price

Break Even Units

Photogize DVD $2.39 $14.95 $12.56 84% $6995 557

$2.39 $19.95 $17.56 88% $6995 399

$2.39 $24.95 $22.56 90% $6995 310

$2.39 $29.95 $27.56 92% $6995 254


Introducing Photogize Producer!

The New Market Opportunity for Consumer-Personalized Photo DVD/CD Publishing

August 2007

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