Retail photography firms deal with digital, or close.

BLINK and you might miss it.

In less than five years, digital photography has overtaken homegrown Hollywood photo shops, ushering in rapid changes that, coupled with a slower economy, have resulted in less spending by consumers and professionals alike.

As a result, dozens of shops have shuttered. Others have had to cut back on staffing, reinvest millions of dollars in new products or refocus their business to survive.

"Business as usual just doesn't exist," said David Alexander, co-founder of A&I Photographic and Digital Lab on North Sycamore Avenue. "On the one hand, that's really scary. On the other hand, it's the most fun I've ever had in this industry."

Roughly 50 locally owned photo shops operate in Hollywood alone, some having been run by the same families since the 1940s. Traditionally, they have relied on actors' head shots, studio advertisements and fine art prints for a good portion of their business.

Along the way, there have been periodic changes in the technology. But few shop owners were prepared for the rapid transition to digital photography.

"They've switched over in droves," said Richard Risemberg, director of online marketing at Mel Pierce Camera, one of the oldest camera shops in Hollywood.

At retail shops, film cameras and processing chemicals have been replaced by printers and kiosks. Revenues from paper and ink for print photographs have almost entirely vanished, since many digital camera users store photos digitally and print them out when needed on home computers. Many stores no longer handle used cameras, once a significant source of revenues.

New digital products

Offsetting some of those lost revenues are increasing sales of digital products. Some retailers stocked up on wide-angle lenses used to compensate for the way in which digital lenses narrow the scene, like telephoto lenses. Risemberg said Mel Pierce has invested more than $1 million in inventory related to digital products.

Photo laboratories, on the other hand, have had to invent new ways to generate revenue. Several labs had been catering to professional photographers, who are making the switch after years of resisting digital, now that the prices for cameras have come down to the $1,000 to $2,000 range.

A&I, which processes film for news and commercial photographers (and sells only film), recently closed its location on Highland Avenue to consolidate its operations and reduce staff.

Its focus has shifted to scanning, primarily for the fine art business. Last year, a Web-based software service was introduced that helps businesses manage their digital photographs.

Among other photo labs, the story is similar.

"Everyone has downsized," said Don Weinstein, president, owner and founder of Photo Impact Inc., where traditional black-and-white processing services have expanded to include digital services and color processing. "Everyone has a certain amount of work, but it wasn't what it was four to five years ago."

Some of the slowdown can be attributed to the economy, which reduced overall spending in both the consumer and professional markets. Not only have individuals reduced luxury spending in recent years, but businesses cut back on advertising. News organizations and entertainment companies began purchasing stock photography instead of hiring professionals, which has hurt photo shops across the board.

"The stock photo agencies have grown in importance," said Alexander. "Every time you assign someone to do a job you're taking a risk you're getting what you want. But if you buy a stock photograph, you know exactly what you're buying and you reduce your expenses."

'Surfed a lot of waves'

All these challenges have forced major management changes among some of the Hollywood shops. Mel Pierce Camera was family-owned until the general manager bought the company five years ago from the son of founder Mel Pierce Sr.

"Four or five (shops) have closed down because the second generation didn't know how to run them," Risemberg said. "The photo business in the U.S. surfed a lot of waves that made it easy."

Some of the biggest innovations: the introduction of the 35-millimeter camera in the 1960s, the standardization of color processing in the late 1960s and the introduction of Japanese cameras in the 1970s.

While each of those changes brought challenges, they took place amid the rising interest in photography as a hobby--much of it spurred by the popularity of Life magazine. Digital technology also presents new revenue opportunities, but the shift has been harder to manage. "When Joe and Jane Smith feel a pinch, they stop buying camera lenses, not (paying) the rent or the grocery bill," Risemberg said.

Suzanne Herskovic Ponder, vice president of Bel-Air Camera in Westwood, said many one-hour photo labs have closed because of digital. In Hollywood, where Ponder's cousin, Samy Kamienowicz, founded Samy's Camera in 1976, others are feeling the pinch.

"A lot of those camera stores have been established in Hollywood because the industry was there," she said. "They just stayed there. But a lot of the studios aren't there anymore."

Among the professional labs that have closed in the past year are the Artform Color Lab on Vine Street and Petron on Fountain Avenue, say several local photo shop owners. Neither could be reached.

Despite rumors, Chrome & "R" Color Laboratory on Melrose Avenue has no plans to close its doors, said Tony Pashalides, co-owner of the film-processing lab. He said the company is waiting out the digital shift.

"We're taking the position we'll continue to do film," he said. "We still have a lot of film customers. We offer personal service, and that's an important issue."

Freestyle Photographic Supplies, on Sunset Boulevard near Normandie Avenue, has increased revenues by selling film processing equipment to schools that still teach in darkrooms, said Patrick DelliBovi, vice president of sales and marketing at Freestyle Photographic. In the last two years, the company has opened a 35,000-square-foot distribution center in Santa Fe Springs and acquired the assets of a Philadelphia camera dealer.

That niche, Dellibovi said, has made his company's growth unusual right now.

"A lot of the dealers are in for a roller-coaster ride," he said. "They've got a lot of tough decisions ahead of them."