VentureBeat

Phanfare, an online photo- and video-sharing service, has announced a new iPhone application that allows users to upload and share their photos directly to the web.

Mobile integration is one way the Metuchen, NJ-based company is trying to make its product stand out from the many other photo sharing services available. That’s really important for a company trying to compete in the incredibly crowded photo-sharing market, and even more so for Phanfare, since its founders hope to make money through premium fees.

“We’re looking to go after the people who want to pay the money for a better service,” chief executive Andrew Erlichson said.

Created in 2004, with a recent 2.0 update in May, Phanfare offers photo and video sharing networks to Mac and PC users in a format that I found easy-to-use and aesthetically-pleasing. The program offers up to 1 gigabyte of storage for free, and unlimited storage for $54.95 per year. That’s more expensive than competitor Flickr, who offers unlimited uploads for $24.95.

But Phanfare differs from Flickr and the Google-owned Picasa in what it has to offer, Erlichson said, because it can be accessed on your living room television and allows users to store the full-sized original images.

And with this most recent update, iPhone enthusiasts will never have to go through their laptops or personal computers. The application allows users to take the photograph, format it, add a caption, load it to an album and share it — all wirelessly. (Particularly with this new application, Phanfare is also competing with general sync services like SugarSync.)

Erlichson said Phanfare has pursued a different customer base as well. While its competitors are courting younger, MySpace-aged users, Phanfare is “recreating the family album with all the benefits of it being online,” he said

The site does a good job of making things basic for even the most technophobic users. A slideshow – complete with music ranging from “Flight of the Bumblebee” to “Pop Pop Radio” – is created with a few clicks.

It’s easy to look at photos from others in your network, too. Phanfare adjusts to various Internet connection speeds, Erlichson said, so if Grandpa wants to check out pictures of your kid’s first piano lesson, Phanfare won’t crash on his slow dial-up connection.

When I took Phanfare on a trial run, I was struck by how simple the site made everything. The homepage is basic and intuitive, allowing users to look at a family and friend albums, upload a new video or create a slideshow with one click. The slideshow in particular seems to be a big selling point for Phanfare. The site walks its users step-by-step through creating a slick album with music, captions and fun backgrounds and then allows this slideshow to be viewed on your television when the whole family comes to visit, or on everyone’s personal computers.

Phanfare raised $2.5 million in venture funding last November. The site currently has around 135,000 registered users, about 10 percent of whom pay for extra storage.

udpated
Phanfare, one of dozens of photo-sharing companies hoping to stay alive amid extreme competition, has raised $2.5 million more in capital and promises a big change in its business model.

Phanfare isn’t profitable yet, but its offering distinguishes it: It allows you to store your photos — and videos — in an application on your desktop, and then syncs the content to the Web automatically. That means your collection of videos and photos is available wherever you go: They’re stored online so that they’re easily accessible if you change computer. No other service, to our knowledge, does this for both video and photos. The company focuses on private sharing among families, and so the Web contents aren’t available for view by outsiders.

The site has had favorable reviews. Yet despite its 10,000 customers, Phanfare is still not profitable — which points to the big economics problem of photo sharing: There are simply too many other sites offering people unlimited, free storage for photos. “A large number of players are willing to take perpetual losses,” says Phanfare’s chief executive Andrew Erlichson. “As these companies get out of the space, there will be a healthy shakeout.”

Erlichson said the company is about to do something radically different within a month or two, but said his plans are secretive. “Our whole business model is changing. We have big plans for the service”. However, he ruled out a move to offer the service for free. Phanfare users pay $7 per month, or $55 a year, and get unlimited storage.

The third round of funding was led by Azure Capital Partners, and included other undisclosed investors. Previous backers include Acadia Woods Partners, and DoubleClick co-founder Dwight Merriman, former DoubleClick chief executive Kevin Ryan, and founder of ringtone company Zingy, Fabrice Grinda. Azure’s Paul Ferris joins the board.

Erlichson founded the New Jersey company three years ago with Mark Heinrich. They did so after studying at Stanford and launching a company called Flashbase, which was bought by Doubleclick in 2000.

A host of other players offer desktop photo storing and management applications, including Kodak, Shutterfly and Snapfish and Picasa. Online players include Fabrik, Flickr, Fokti, Pbase and SmugMug, among many others. Phanfare converts the videos to Flash for you so they are easily viewed online, and you can download them in their original form (update: SmugMug does this too; remarkably, SmugMug also says it’s profitable). Phanfare also works well the new Eye-Fi card. Sharpcast has a version of the online-offline sync, but only for photos so far.