Each school's contract may be different, but as the yearbook advisor at my school I do not require senior portraits to be taken by Lifetouch. The underclass photos, yes, but nobody has ever asked to submit outside photos for underclassmen before.
There are a couple of reasons that schools make one company an exclusive senior photographer. One is the kickback they get...I mean commission. Contary to what someone else said, that commision can be pretty substantial, well into the thousands and even tens of thousands of dollars for a large district. This includes underclassmen, prom, homecoming, sports, etc.
Another reason is the simplicity of getting the photos on one disc from one company. It's a pain to get seniors to turn in their portraits. Several are left out because they miss the deadline. Lifetouch mails home information to every senior with an appointment time. They know when our deadline is and make an effort to get everyone photographed in time to make their selections to meet the deadline. For our underclassmen pages, I get the disc from Lifetouch and then mail it right to Jostens to be uploaded into their system. Names are automatically associated with each photos. Seniors I upload and place individually. We use an online program for page design.
A third reason is the uniform look on the printed page. Almost every Lifetouch portrait is uniform in dimension, size of the face, amount of background showing, lighting, color of the background, etc. That's because they have a formula that the photographers can't mess with. When you have everyone looking the same on the page, it's a better looking design, there's uniformity. We have had some pretty sad looking senior portraits taken by so-called professional photographers. They were really crappy and I had to ask if there were better ones they could submit. I'm tempted to black-list them from submitting photos for our book because they are that bad (poor exposure, poor posing, fuzzy).
If I wasn't a photographer, I would probably require Lifetouch to do all our senior portraits. They do have cheap enough packages that for $45 you get your two yearbook poses- formal and casual. However, I believe in the free-market approach and am friends with several of the local senior photographers. I know their work is far superior to the Lifetouch photos and I let the parents make the decision.
I don't believe Lifetouch can say that they are the only photographer who can submit photos, I think the school makes the deciscion based on the factors above.
Also, Jostens is doing fine. They have a strong yearbook division as well as the rings and graduation supplies (cap, gown, trinkets). Lifetouch didn't buy Jostens, MAYBE their photography division, but not their yearbook division. I have the Lifetouch yearbook rep on my back to switch from Jostens every couple months.
One last thing, Lifetouch DOES go to the local park, DOES do more than one pose per package, and does the creative photography such as with the kid's car or sports equipment. Naturally, this costs more, but it can be done. Some offices may not have people capable of doing location photography, but I bet they offer it anyway.
Talk to the yearbook advisor and the principal. Schools are cash-strapped, do you offer them anything? Do you advertise in their yearbook? Sports programs? Book covers?
Sam