KODAK, AOL EXPECT FILM SCENE TO ENLARGE WITH 5.0

MATTHEW W. EVANS

NEW YORK -- Partnered with Dulles, Va.-based America Online, Eastman Kodak Co., Rochester, N.Y., expects an element of the new AOL version 5.0 to drive growth in the photo category. Kodak officials made the announcement at a press conference held here by the two companies earlier this month.

AOL 5.0 features "You've Got Pictures," which is only available on this software version. It will "burn more film," said Michael Foss, chief executive officer of PictureVision, the majority-owned subsidiary of Kodak that developed the technology. "The end result," he continued, "is more pictures will be taken and we will all benefit from this -- the industry as a whole."

Claiming that the service is "as easy to use as e-mail," Kodak expects an increase in consumption due partially to the fact that consumers need no new equipment, just a software download. "Making consumers aware of what can be done with digital imaging drives consumption," Foss added.

Kodak and AOL announced the partnership in May of last year. A year later, the program debuted in test markets in Cleveland, and in Tampa and Orlando, Fla. Since then, the program has been rolled out to more than 38,000 retailers in 52 cities where film is dropped off to be processed with the option to convert from standard film to digital images.

Retailers stocking photo-finishing envelopes printed with a special section allow consumers to choose the service, which has a suggested retail price of $5.95. After checking the "You've Got Pictures" box on the envelope's processing form and printing one's screen name, any of the 18 million-plus AOL members who download 5.0 will see a "Pictures" icon on the AOL welcome screen within 48 hours of processing. The message -- much like AOL's signature "You've Got Mail" -- can also be heard.

Some supermarkets distributing the envelopes include Kroger Co., Albertson's, Safeway, A&P, Wegmans Food Markets, ShopRite Supermarkets, Publix Super Markets, Winn-Dixie Stores, Randall's Food Markets and Dominick's Supermarkets.

Company officials could not say, however, what percentage of their retailers are food stores. "This is all about category growth -- giving people more things to do with their pictures," said Willy Shih, president of Kodak's Digital & Applied Imaging. "For retailers, it is a great growth opportunity."

While AOL members and non-members can opt for the digital imaging when they drop off their film, Kodak touted the partnership because of AOL's "broadest distribution of customers on the Internet," said Foss. Non-members can access their digital images by logging onto Kodak PhotoNet Online (wolf.photonet.com). A spokeswoman for Kodak said networked Kodak Picture Maker kiosks that can access the digital images on-line at PhotoNet Online are currently being rolled out to retailers.