Gary Pageau
Hello again and welcome to the Dead Pixel Society podcast. I'm your host, Gary Pageau. And today we're joined by Mike Limbach, the president and founder of Studio Source Yearbooks. Hi, Mike. How are you today?
Mike Limbach
Great, Gary. Thanks for having me.
Gary Pageau
So for those who aren't familiar with Studio Source Yearbooks, can you describe a little bit about where you came from and how you started the company?
Mike Limbach
Sure, I started the company in 2011. Before that I had already started in owned a company called Proven Direct in Milwaukee, Wisconsin, started that company in 97. And we did printing and marketing for companies. And toward the end of that we started to get into yearbooks, and printing yearbooks for school photographers and high-volume photographers. And I left Proven Direct in 2011 and was thinking about what to do next, and saw that as a as a great opportunity. It was growing already. I knew the business. I knew that it didn't make sense to own presses anymore. We owned seven Indigo presses at Proven Direct, but there are so many companies out there that are good at printing books, and own 30-40 digital printing presses that the idea was to outsource all of the production. And the other part of the idea of starting starting Studio Source Yearbooks was, how do we take the friction out of the whole process for school photographers. The important part of yearbooks for school photographers is they don't want a yearbook publisher to lose school photography business for them, because the most lucrative part of their business is the picture-taking the pictures in the school picture packages. So they make they can make some money on the yearbook portion of it, but they, they they they really at that time they saw yearbooks as as something where how do we keep our other part of our business, maybe make a little bit of money, but who can we trust? So I
Gary Pageau
So your customers are photographers? Who are servicing schools who want to add your books to their portfolio?
Mike Limbach
Yes, or they potentially already have your books as part of their business and they're looking for another yearbook publisher that can do things better and preferably at less cost.
Gary Pageau
Now, these aren't traditionally the hardbound yearbooks we didn't see back in the day from like high-school yearbooks, these are more from different age groups.
Mike Limbach
Yeah, for sure. There's still a lot of hard hardbound books. So I would say 30% of our books are are hardcover, probably 20% are perfect bound, softcover, and the rest are saddle stitch. So at the elementary level, for the most part, they do saddle stitch books. And then you know, as you move up, you know, you still have a lot of hardcover books, hundreds of 1000s, or millions of hardcover books for sure.
Gary Pageau
So you're looking to start a business, it's just 2011, you're looking to start a business, you decided you're going to approach this market, based on your experience from your prior company. What are the things you brought with you in terms of business model and customer service that you wanted to bring to studio source your books?
Mike Limbach
Well, I knew from running a printing business that like I said earlier there, there's plenty of opportunity to find really good printers out there. I really wanted to take the friction out of the process for school photographers. So the key was building this interface where we have five different software's they can choose from, so that they can they can serve any level of advisor or any grade level. So if you pick Pixami, or Momento or PLICBooks or FluidMedia, or Creator Studio, you have these different software choices for the advisors and for the schools. So what I was trying to bring to the industry was where you don't just have one software to choose from, and then everybody has to fit into that hole. Basically, you have five softwares to choose from, we can serve, you know any of those schools from elementary through high school. And that's a big key. Then we built a dashboard for the school photographer so they can manage their entire yearbook business from our dashboard.
Gary Pageau
But if an advisor is using one of those five softwares and they need support, they go to you correct?
Mike Limbach
Absolutely. So we are tier one support for all the software that we offer. We have a good side support team. We have a support articles and videos and screen shares and everything you would think of support ticketing, just like any good-sized company would have to support all five of those softwares. Yes.
Gary Pageau
So that takes the burden off the photographer for that is what I'm saying they're not, you know, they can safely recommend any of those software's based on what the customer may prefer and not have to worry about., They're going to get a call that, you know, jack at x elementary school has question about how to import photos.
Mike Limbach
Right? They point them in our direction, and our support team takes care of that. Absolutely.
Gary Pageau
What are some of the trends you saw prior to COVID, in terms of your book adoption among the younger grades? Because that seems to me like that's a relatively new trend over the last 10 or 15 years?
Mike Limbach
Well, I think when we got into it in 2011, it was already, you know, had taken hold. Certainly, almost every elementary school had had yearbooks, almost every school had yearbooks already. But one thing that, you know, I hear people talk about buying rates going down, year to year for yearbooks and picture packages and everything. But we we've been stable, our buy rates for our customers have been stable for the last five years. So the average number of yearbooks purchased by a school on average has stayed the same over the last five years. It hasn't gone up or down appreciably. The number of pages in the yearbooks has stayed about the same. So we're not seeing it. We're not seeing it deteriorate at all. And even through COVID, we lost some schools for a year because they just didn't have the wherewithal in the pictures to make a book, but it's coming back strong.
Gary Pageau
Hopefully this year, this school year, things will work out and then in the fall, hopefully we'll be somewhere closer to a normal academic year. You know, this this whole past 18 months has been an unusual anomaly. I don't think anyone really wants the yearbook filled with kids sitting in front of a computer screen that that was the whole educational experience.
Mike Limbach
Most of yearbook companies have provided content to support making a decent book for this year. And we've done the same but the right now for this for the Independent School photographers. It's a great time, actually, because there's such upheaval in the industry. So as you know, Lifetouch laid off. And I don't know, maybe you're gonna ask this question down the road. But you know, they laid off 700 field sales and support people. Some of the yearbook, companies have struggled with their HTML5 software here, because they everybody had to switch to that, right, because of the browsers. Some had late deliveries last year because of because of COVID. So right now, our independent school photographer, customers are picking up a lot of Lifetouch business,
Gary Pageau
We're definitely hearing that that trend is continuing that, you know, as the acquisition by Shutterfly of Lifetouch may not have gone as smoothly as they had hoped, and as created opportunity for not only existing independent school photographer, but also, you know, former Lifetouch personnel were kind of striking out on their own, I think we're seeing some of that as well. And obviously, some of those folks who are striking out on their own don't have the infrastructure they used to have so someone like yourself, or would be suitable for that?
Mike Limbach
Sure. Absolutely. Absolutely.
Gary Pageau
Tell me a little bit about some of the services you offer to help photographers. You are almost a concierge service for photographers, in terms of the level of support you offer?
Mike Limbach
Well, I mean, one of the one of the big things is the five-day turnaround. So you know, traditionally with your books, you know, it's been six, eight weeks, right? With the big yearbook companies. But, you know, with digital printing, you can you should be able to turn around a yearbook, even a hardcover your book in five days. I mean, I don't want to make it into a commercial, I could probably, I could probably go through a number of value propositions. And I will, if you let me.
Gary Pageau
What I'm looking for is this approach is really very modern today. Right? Where frictionless transactions are really where a lot of industries are going, where there's a value inherent in a business now where if you can reduce steps and complexity for a customer, you're going to win business.
Mike Limbach
That's where that that's where the dashboard that we've built lets them have all the information they need at their fingertips. So sometimes, you know, with yearbook companies, it kind of goes into a black hole for multiple weeks, and they don't know what's going on. But with the dashboard that we built, they can look at order status, they can track their orders. We have automated notifications that go out. We've built a purpose-built e-commerce platform for school photographers to use which is big, because, you know, they're mostly small businesses, the school independent school photographers, if you can, if you can build a lot of that technological infrastructure for them, to put everything at their fingertips and at their school fingertips, you know, that makes their job easier. And that's, that's really what we're trying to do.
Gary Pageau
When a school photographer approaches a school district or a school board and is presenting their services, they're really presenting themselves as the main contact and the service provider. But they've got Studio Source Yearbooks as their backbone.
Mike Limbach
Correct. So we're really committed to helping the school photographers grow their business. We assign them a dedicated business development specialists. And we have free studio branded marketing materials and business forms, and e-marketing, temp, email marketing templates, we have a lot of tools to help them win school business. Because if they grow, we grow. So and then like, they don't have to have a big investment in the technology of it, the software, they can basically work with us, in turn, turn most of that over to us. So they don't have to make a big investment, other than going out to win new school business. And when they win the yearbook business, they typically win the school photography business. So they get they get the whole package.
Gary Pageau
Do you see that where they're really pushing the, the yearbook side of it, and they get the school business? Or they have the school biz? And they add on the yearbooks. What is the dynamic there?
Mike Limbach
What I've seen is, is they have the school photography business, and and then they go out to win the yearbook business as a secondary, but you can approach it from both sides. So school photographer might go talk to a school and they say, Hey, you know, right at the moment, we have a contract for school photography, but the yearbook contracts coming up. Why don't you give us a quote on or talk to us about your yearbook capabilities. So certainly you can you can get there either way. But what what I've seen typically is it's school pictures first, and yearbook second, but you can get there either way.
Gary Pageau
You have yearbook companies who have kind of moved downstream into the school photography business. So they're really competing now against bigger players who have their own presses and their own sales and marketing materials. So you're really putting the independents on more of an equal footing in terms of presentation materials and appearance with these big with the bigger, vertically integrated players.
Mike Limbach
Exactly. Exactly. And I won't name names, but there's probably only two, school photography, school yearbook publishing companies, including us, that are pure, that independent school photography sales channel. A lot of the yearbook companies now are trying to get into, or are starting to get into, or have been in for a few years now, into the school photography business. So then they end up competing with the independent school photographers, whereas you know that word that's our customer. We have no competition there.
Gary Pageau
What are some of the unique ways that Studio Source Yearbook supports photographers?
Mike Limbach
The first one is we've been working for the last four or five years to build a curated graphical elements library. And what that means is we have over 15,000 backgrounds clipart collections, cover backgrounds that our customers are their schools can use and their yearbooks on top of what are in the software at Pixami, Momento, PLIC, Fluidmedia, Creator Studio, they have they have content in the software. But with our content partner, we've built this proprietary library and curated it, it's searchable by theme that you can you can sift it any way you want, and pull out whatever content you want to use your yearbook. The other is, this past year, we built an email and SMS marketing platform for one of our larger customers that we're going to roll out to the rest of our customers next year. And it's probably had their buy rates increase double digits. Their yearbook buy rates have increased more than double digits because of this email and SMS marketing platform. The tough part there is that you need to get the schools to understand why it's important to get email addresses and cell numbers for the parents, right. You have to and they have to be comfortable that you're going to use it appropriately. We're gonna work with this big customer. We're gonna put out a SPAC presentation at the next SPAc in January. And it's going to talk about how do you speak to your schools to get that information and get them comfortable with you marketing. So those are two ways that are very unique, that we that we really support the independent school photographers.
Gary Pageau
I think that is something that kind of latches on to a trend that's happening where school photographers, you to rely on the schools, usually to sell packages, and sell your books and sell that, and they didn't have a lot of direct contact with the customers. And I think over the last decade that's changed where school photographers are giving more access directly to the end users and parents
Mike Limbach
Consumers have been more become more comfortable buying online. So we saw a drastic drop off in in envelopes that go home with the students. Right, you know, and plus, how could you bring them back to school if you're not in school? So I really drove everything online.
Gary Pageau
In other segments, the industry, we've seen a lot of uptick in online mobile app usage just because of the you know, the old business models were disrupted and people who were able to adapt to the newer business model, either online or apps or what have you. I have done well.
Mike Limbach
And we had a scramble for shipped to home because schools were closed at the end of last year. All of the yearbook companies, you know, built a process to allow you let's say there were 250 yearbooks ordered, you had to get addresses for all 250 students and ship those yearbooks individually to the homes because there was no shipping to the school and distribution plan. So you know, that was that was an interesting challenge as well and and some are still doing ship the home this year. They've just kind of stayed with that. Now. I think I'd rather have him distributed at school because of the you have the yearbook signing day. It's pretty tough to have a yearbook signing day. Yeah. When the books are going home.
Gary Pageau
What are some of the new channels and venues that are opportunities for people using your platform? I mean, there's, you know, preschools, there's day camps. There's all kinds of things have you thought about, as school photographers looking to expand their business into sports and events and things like that? Are is your platform suitable for that as well?
Mike Limbach
Absolutely. We do a lot of church directories and I think Lifetouch just exited the church directory business. And Pixami has a specific they, most of the software companies have something for directories, but Pixami came out this past year with a church directory with a directory program. Sure. I think PLIC has it. They may all have it, but that's the one I'm most familiar with. So, there's lots of options. For directories, we do a lot of sports books. We do dance school books. Our customers are doing all of those types of things and use our platform for all of those different types of things for sure.
Gary Pageau
So, there's really no limit, as long as they're capturing pictures of a group or a club or something like that. There's an opportunity then, for them to put them in a book around that.
Mike Limbach
Yeah, absolutely.
Gary Pageau
Are there any other output products that are potential for this platform? And besides books, I mean, obviously, your books in your name, but there's also, you know, banners and other output products?
Mike Limbach
Well, certainly we work with output partners who have some of those capabilities. But we've really tried in these 10 years that we've been business, we've really tried to focus on becoming excellent at yearbook, publishing, and all the things that support your book publishing, so we just haven't gone down any of those other roads yet.
Gary Pageau
Seems to me, that's a big opportunity, though. Because you have, you know, that's really what, in the past, you know, six or eight months that really helped school photgraphers stay in business has been some of those oddball ancillary services, you know, the trinkets, the mugs and all that other stuff.
Mike Limbach
Absolutely, absolutely something certainly something to think about down the road.
Gary Pageau
So speaking of down the road, what do you think is the near term outlook for the industry for here, as we come out of COVID, hopefully, and we get back to whatever the new normal is, what do you see as the big trend?
Mike Limbach
I don't know that there's a big trend. I just, I just know, I talk to our customers all the time, our school photographers, the owners of the studios, and they are very high on an coming school year, they think we're going to be back in school. So they're very excited to get to get back in school. I don't know that that's a trend. Everybody's just trying to get back to whatever normal is going to look like. You know it for the 2021 -2022 school year. So I think, as I mentioned at the beginning, that the high-volume school and sports business is going to be a good business. If COVID didn't kill it.. and it didn't. We have over 100 school photography customers. And I think two of our customers got to the point where they just couldn't keep going anymore. And they were they were pretty small to begin with. So I think coming out of COVID there's a tremendous opportunity for the high volume photographers. It's going to be it's going to be a good year.
Gary Pageau
Great. Well, listen, Mike, thank you for taking time to speak with us today and look forward to seeing you in 2021.
Mike Limbach
All right, thank you, Gary.
