Industry standard for newsprint photos is 300dpi....With a max data size of around 1mb. Any greater, all that happens is FTP transfer takes more time for "no great benefit".
Is a shame when technology is capable of far greater.
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1024x768 images are fine for computer screen, though we know that even then some sharpness and detail can be lost.
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Are they keeping the size requirements low to encourage more people to enter? By reducing the photo sizes some photos can be made to look sharper and smooth over digi noise....Has been a while since attending a local camera club. Can remember at the one I once went to, they had two print competitions running side by side. One was for 'professional' prints ie done by a lab, the other was for 'home done' prints......colour accuracy and rendering was judged differently for the two.
Maybe a similar principle can be applied here, perhaps?