Deepening Transformations

Some things are becoming so common that they stop surprising us. In an urban setting, particularly in tourist areas, every day we see people looking like tourists holding their camera (their phone) in front of their forehead and the point of interest on their backs, to do what we now call “selfie”. Some of these people immediately use their portable photo workshop (their phone) to edit, cut, enhance and filter out that picture. If they are more introverted, they save it for the future. The more extroverted used their portable communications center ( their phone) to publish in one or more social networks the recent photo, so their friends, contacts or followers can see it, including the geographical reference to the exact place where it was taken using their portable global positioning system (their phone). Probably on the way to the next landmark, one of those tourists use their online monitoring center to check their activities and those of their contacts (their phone), and evaluate acceptance in the amount of likes, retweets, or comments that their last published photos have received. Some of those tourists, still few, also pay their water or coffee with their most recent portable central payment unit (their phone), but this will be subject of another post. An application on their phone will take care of saving the photo somewhere in the cloud.

The time of photos rolls, negatives, waiting time for the development and and “to see how it came out” is a thing of the past for most photographers (almost anyone today with a phone), thing of the past. Some nostalgic yearn the strange feeling of emptiness in the stomach as the envelope was opened with photos to see if they were not moved or if the light was good. Others agree that more is gained than what was lost. But in the process they realized some changes, some very obvious, others not so.

What happened to the business of photography specializing in primarily selling rolls of photography and to reveal them? Some of them will quickly change their activity. Others, attempting to follow the change, replace the sale of rolls with sales of memory chips for the new digital camera; the photo development by digital photo printing; digital photo frames along with the traditional ones; and maybe recordable DVD to store heaps of photos. Some, probably not many, don’t change their business, hoping that the change would not be so violent. Some because they thought that the new digital cameras were too expensive or took bad pictures, and others because they were betting on the romanticism of the photography lover who would never prefer the magnificent traditional photo that could be seen and touched, over the lower quality of those digital screens.

In the end, there were not so many romantic attached to traditional photography. Many of those who clung to the old camera did more due to problems with the investment than by fidelity to the roll.

The changes continued, first because even if they were taking more photos, people did not buy so many memories and, from those many pictures taken, people actually printed few. Secondly, because digital cameras themselves were being displaced by smart phones, which were gaining quickly better technical features and increased storage capacity.

Today, in the culture of the selfie, I wonder about those condemned businesses. How many are left and what do they do. Many saw their business slowly dying without adapting. I wish most of them continue to operate and have taken advantage of the huge change opportunities to innovate and offer more interesting and better services and products.

In the old business model, in many of our countries cameras and consumables, rolls and photo paper were imported, as well as laboratory equipment. Albums, photo frames, and other similar things could be from the local industry. Employment associated with those jobs was, I guess , primarily local. And, of course, the import tax and the value added tax that these operations generated and the income that these businesses would declare, was local.

The import or manufacture of phones is a thriving activity. We know that there are more phones than people in our countries and that some people change phone every year, to stay updated. We know that there are associated activity and consequent revenues for the State not only by this marketing but also by the use of data and other plans. But, in terms of consumer photography, that of the thousands of people who do selfies with some frequency, the change is very big. They invest in their phone and store huge amounts of data somewhere. But those huge amounts of data are less and less stored on a physical device such as a memory flash or a portable hard drive. And a flash memory costs today more or less the same that it cost ten year ago but has a thousand times more memory and the decreasing price of hard disks is also remarkable.

The trend is to go to the cloud, a service that allows millions of photos to be stored elsewhere via the Internet. Many obtain free cloud storage, others pay an amount for it. Almost always, the services that are paid are in another country. It is unlikely that this activity will generate some kind of income tax.

The digital economy is going to continue forcing these changes, sometimes dramatically, in different economic sectors. When I met Buenos Aires I was impressed with how often I observed a type of business: the phone talking. Today there is increasingly less… or even no more? The reason is simple, usually because everyone carries a phone in the pocket or briefcase. I saw the numbers of phone talkers reduced for the same reason in Panajachel, Guatemala, between the first and the last time I went. Several of my friends who began by adding an internet television service to their portfolio of entertainment have abandoned or are thinking about abandoning the cable television.

In certain economic sectors, precisely those most affected by the digital economy, it seems that the recipe is to adapt and innovate. This adaptation can move significantly the productive schemes, as a result the business models of these sectors and the tax administration must be prepared to manage taxes in those new models. If they don’t do it, the tax administration may take the same attitude as a friend of mine who told me, while looking at me with a certain disdain when I was reading in aggregated news on my tablet: “It will never be the same. The feeling of turning the pages and feeling ink on your hands will not be replaced.” The printed newspaper has been a tradition in my home, and we competed to be first to pick our favorite sections. Now, I asked which newspaper we buy, and I was answered that now we only buy one on Sunday.

Greetings and good luck.

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