another sign on the road to analog hell

[glewis]

FYI--
Kodak plans to reduce costs, find new markets

http://www.dfw.com/mld/dfw/business/6592492.htm

ROCHESTER, N.Y. - Grappling with the rapid rise of digital photography,
Eastman Kodak announced yet another reorganization Thursday aimed at cutting
costs and accelerating growth in consumer and commercial imaging.

Kodak hired Hewlett-Packard veteran James Langley to run commercial-printing
operations, a new business that reflects Kodak's struggle to find new
markets to compensate for the slump in sales of traditional, chemical-based
film.......

 

[Eric Rose]

Even scarier is the last part of the article:

The consumer and professional photography businesses, which account for about 60 percent of Kodak's annual sales of $12.8 billion, were consolidated last month in an effort to pool resources.

The switch by consumers to digital photography is coming on faster than expected, cutting deeply into the film, paper and photofinishing businesses that anchor Kodak's profits and image. Industry analysts say that by the end of the year, digital cameras will begin outselling film cameras in the United States for the first time.

Kodak is slashing 4,500 to 6,000 jobs this year, shrinking its global payroll to around 62,000 from a peak of 136,500 in 1983. Kodak blames the three-year slump in film sales largely on a sluggish economy and the rise of filmless digital cameras.

About half the cuts, mainly in the traditional-photography divisions, will be made in Rochester, where Kodak is based and employs about 22,000 people. Three weeks ago, Kodak said it is shifting its 35 mm film-finishing operations to Mexico and China and eliminating as many as 900 jobs in Rochester.

ops:

 

[Sean]

I am not too worried. I feel pretty confident that as the big players bow out, specialty shops will actually see an increase in revenue (places like J&C Photo, Bergger for example). As long as these smaller shops can keep it together I will be happy enough. And there is always the worst case scenario of making our own plates! hehe

 

[Aggie]

..

 

[Sean]

I am still waiting to see what happens when digital cameras no longer need to increase pixel count (for consumers I think this has already happened). From what I hear 3 megapixels can make good 8x10's so who needs more? Eventually the consumer will be thinking "do I buy a 3 megapixel camera for 50 dollars or a 50 megapixel camera for 2,000 dollars?". It just seems there is no need to keep increasing pixel count for the consumer market (increasing pixel count seems to be the basis of their marketing engine). So they'll be left with consumers who do not want or need 50 mpixel cameras, then what, develop higher pixel counts for the professional market? I can see this now "Nikon 65 mpixel vs. Cannon 63 mpixel, vs. Sigma prototype 66 mpixel"... This will happen to the point a 20megapixel difference between models doesn't matter so who will buy the cutting edge models. Also there is the lens resolution to think about - can a lens resolve more detail that 50-100 megapixels? If not why buy a 300 megapixel camera if a lens can only record 100 megapixels? Seems like the digital market will tank when they hit these types of pixel levels. I'm no expert though...

 

[Jorge]

Aggie, any sane person would think like you, but that is not what the wonder MBA's think. I wonder what they teach them in school now a days?

Ever since I got involved in photography I have seen Kodak make mistake after mistake, their stock every year is lower and these geniuses cant seem to see the writing on the wall...for some reason they just cant seem to pick a direction and stick to it. Look at Ilford, they decided to make paper for printers, and seem to be doing very well, they dont do printers, digital cameras, inks or any other stuff, they are doing one thing and doing it well.

Ah well, who cares? when Kodak goes under I will switch from 400 tmy to efke or bergger...at least those people seem to want to do what they are doing....

 

[Donald Miller]

Kodak Definition: We can't hit our ass with both hands.

 

[Jim Chinn]

It is very easy to explain. The business paradigm is about return on investment for share holders NOW. American business does not look at long term trends or try to weather recession or short economic downturns. If the stock price starts to fall the battle cry is cut jobs, drop products, consolidate brands, ship production overseas. No one looks at the long term ramifications for their particular industry or the nation as a whole.

Business decisions today are not based on logic and rationale but knee jerk reactions to other companies knee jerk reactions. many decisons in industry today are designed to try to boost stock price through cost cutting, but little thought is given to better servicing existing customers or growing your customer base. When companies do try to gain market share it is often a keeping up with the joneses. Smaller and smaller amounts of capital are going into R&D at the biggest corporations like Kodak.

Remember, CEOs and directors need to protect those fat nest eggs and bonuses.

Or to make a long sad story short, It's not what have you done before but what is the stock price this quarter.

And to just repeat what i have said before, there will always be film available. It will all be manufactured in China, Malaysia, Phillipines, Mexico, Vietnam etc. In other words, almost any place they can get away with using virtual slave labor considering the wages that are paid.

 

[Jorge]

Jim I agree with you, but the funny thing is that Kodak`s stock prices have been going down since the early 90's. I would think even the dumbest MBA would have realized by now that their current strategies for boosting short term stock prices are not working.

IMO the problem is not in the search for the quick buck, but in the dumb search for the quick buck. Actually I think that a manager or CEO who is looking for quick profits has to be smarter and more on the ball than those who take the long term view, as they are taking quick risks and making intuitive desicions instead of using all the data available to them.

 

[Robert]

Hasn't Kodak being doing this since about 1982! I remember somebody mentioning Kodak more or less killed thier film R&D department off then. Firing all the film people and replacing them with people who would be digital. This was the early 80s.

Oh and the guy the new guy is replacing. Wasn't he a digital guy brought in a year or two ago?

They are also again claiming digital camera sales will pass film cameras. You know one year they'll be right but it'll be a long time until the number of digital cameras in use pass the number of film cameras in use.

 

[dr bob]

Hasn't Kodak being doing this since about 1982! I remember somebody mentioning Kodak more or less killed thier film R&D department off then. Firing all the film people and replacing them with people who would be digital. This was the early 80s.

Oh and the guy the new guy is replacing. Wasn't he a digital guy brought in a year or two ago?

They are also again claiming digital camera sales will pass film cameras. You know one year they'll be right but it'll be a long time until the number of digital cameras in use pass the number of film cameras in use.

Everyone who has posted on this subject seems to have a very good "take" on corporate America's latest problem, not just Kodak's. Aside from the facts of life, I will bore you with an observation made during the '70s and '80s.

The Hitchcock Chair company was run from a smallish plant in Ct. I hope some of you will remember the Hitchcock line of furniture. It was unique and, IMO, well constructed, designed, and finished (especially the characteristic air-brushed "still lifes" on the back of the chairs.

When I was doing an engineering job for the Navy, I had to pass by the Hitchcock place on my way between the airport at Windsor Lock and Thomaston (a 50 minute drive through some beautiful, hilly country). Finally I had the opportunity to stop and take a "tour".

At the end of the plant there were stacks of lumber, walnut, cherry, mahogany, oak – you get the picture? Workmen were carrying the wood through the double doors to their mill where it was cut and shaped. IOW, it was a complete business with raw material going in one end and finished products out the other. I noticed that the average age of the craftsmen was about 60.

Well, the next year, the wood pile was gone and the year after that the Hitchcock plant was gone. The management saw no reason to train young people before the old guys left, so they “farmed out” work, imported parts and became an icon to corporate America of the ‘80s. I would have loved to have been able to “take over” operation of that place about the time of its degradation. I believe that with proper management, the company could still be in business today.

Also at Thomaston: The Seth Thomas clock plant, which used to manufacture some nice stuff, was importing their products ready-made from (fill-in-the-blank) and placing the Seth Thomas label on them. They used to do it all there in Thomaston – now they are gone.

Get used to it. I’m glad I will not survive the next twenty years as I hate to see my grandchildren living in a place with so much disdain for history and tradition and seeing only the “bottom line”. Long live APUG! Dr bob.

 

[Ed Sukach]

From what I hear, it is not all a bed of roses on the "Digital" front either. It's true that many analog photographers have given up and either sold their traditional equipment to buy digital cameras, or mothballed them.

However, the digital market appers to have peaked some time ago. Sales are definitely down, and the activity overall in both areas of photography is receding all the time.

I think there are two factors involved: A sense of "novelty" with the digital media coupled with the idea of "You don't have to learn anything!" (inseperable with learning is dedication); and the inherent demon of digital photography - the rapid obsolescence of equipment (a la' everything else to do with PCs).

I wonder what the future holds ... I see fewer and fewer serious - dedicated - fascinated (all descriptive of the same character) photographers coming up ... but those who are, are very, very good. There probably will be a number of "lower end", inexpensive digital cameras in use (perceived as throw-aways) by those who are only into photgraphy as a means of memory stimulation .. I don't like the term "snapshots"; and a corps of Fine Art and high level Commercial photographers - do I dare utter the sacriledge - STILL using film, and STILL making high quality "chemically - processed" prints.

Let's see - predictions that seemd good at the time:

Paper (papyrus?) and cloth will obsolete cave walls.
Silverpoint wil obsolete charcoal.
Pastels will obsolete -- I don't know -- something in there, somewhere.
Tempura will obsolete silverpoint and charcoal.
Oils will obsolete tempura.
Acryilics will obsolete oils.
Water based Oils will obsolete conventional oils.

Related - Digital music will replace orchestras ...

I'm just going to set myself on "ignore digital" (well... mostly) and concentrate on images that *I* want to make.

 

[blansky]

I seem to remember in the 1980s when I was a traditional portrait studio, shooting and printing only color, that Kodak decided that to hell with pros, they would concentrate their resources on the amateur market. They felt that this was where the growth would be. They left us high and dry at that time along with the unpleasant fact that their color products faded in about two to five years after telling us that color was very stable.

In fact, this could be one of the reasons that they left us. We were constantly bitching that the prints were fading and they thought that going the consumer route that there was less, or no accountability.

Anyway I said goodby to Kodak at that time and I'm more that happy to renew that sentiment today. They have never been able to see which side of their bread the butter was on. Some companies are just too stupid to be in business.

I wish them all the luck in the world in their third world headquaters making digital cameras for the Chinese. Maybe there really is a reason that their boxes are yellow in color. Whoooooops, Sorry, very politically incorrect.


Michael McBlane

 

[juan]

I, too, wonder about the future of American business. Management seems to be dominated by people who have learned to speak a particular language of art (one I've never mastered), but who understand little else. Promotions seem social.
<rant>
A few years ago, I was between TV jobs, so I worked for a while in the copy center at the local branch of a huge office supply company. The company's stated goal was to be the largest office supply company in the world. While I worked there, the company stock dropped dramatically - about 40% if I remember correctly.

The telephone in the copy center was one of only two in the store that could dial out long distance, so when the regional vice president visited the store, she would come to the copy center to use the telephone. One day, as the stock price was in free fall, she was using the telephone and throwing a fit, yelling at the person on the other end. She slammed the telephone down and turned to me as the closest victim.

She began to yell the kind of vague generalities that managers use, "You've got to shape up, or people will be shipping out around here." Stuff like that.

Being a geezer, not a frightened 18-year old, I turned, gave her my prison stare, and said, "What has you so upset?"

She said, "Haven't you been keeping up with the stock price?" waving her arms above her head and tossing her hair. I actually had, but I doubt any of the other, young associates had. I said, "It's in freefall. I can be stupid sometimes, so explain to me how I have anything to do with the stock price."

She said, "You have to be concerned with profitability, and I don't see enough of that around here."

I said, "Wait a minute. I'm just a goober in the copy center. I don't have anything to do with deciding what products the company sells, I don't decide who we buy those products from, what we pay for them or how much we sell them for. I don't decide where the stores will be located, I don't negotiate the rent for those buildings. I don't decide what salaries will be paid. I don't decide what machines I use here in the copy center or what's paid to lease the machines. I don't even get to decide what clothes I wear when I work here. The only thing I can do is make copies as well and quickly as the equipment will allow and charge the customers the prices that are set by the corporation. Again, how do I have anything to do with profitibility?"

Her jaw dropped. She said nothing and ran out of the copy center. The corporate reaction to the stock price fall was to cut the number of employees. Although the corporation claims to take great pride in customer service, in my store we no longer had enough employees to properly serve the customer and we lost business.
</rant>
Sorry to go on for so long, but that's my personal experience with modern corporate alleged thinking.
juan

 

[Jorge Oliveira]

Slightly OT - but if you haven't seen it yet, this is a nice article on real digital:

http://www.photo.net/equipment/digital/sensorsize/

So, from a demanding user viewpoint there's much more than pixel count. And large silicon is VERY expensive...

Jorge O

 

[doughowk]

One problem for CEOs is trying to predict future direction of consumer demand. Bill Gates believes images will be totally digital from conception to display - paper including prints on walls will be like cave drawings a thing of the past. Part of that consumer demand is how tolerant we/they will be for image quality. Kodak continues to bet that a snapshot will be acceptable level as part of our mass cultural slide to mediocrity. The media - TV, internet, etc.. - only helps that slide. Our continued espousal of value of a 'fine print' may be futile; or, who knows, it may not?

 

[Jim Chinn]

A totally digital world is mostly hype or wishfull thinking on the part of those in the industry. The internet provides a certain percentage of retail sales, but will never replace bricks and mortar.

I still remember the talk in the late 90s about how everyone would carry around digital books and book readers. Libraries would be a thing of the past, books could be either borrowed or purchased online and downloaded directly to your reader. One little problem though, people actually like to hold a book in their hands, like to see them on the shelf and be able to pull them down when ever they want.

Photography will become a mostly digital industry, but there will always be those who want the feel and experience of using traditional methods. As as been discussed in other articles, there is a resurgence in this country for all kinds of hobbies, activities, creative outlets that require a hands on approach.

As our world becomes more about automation and computers, the more I think people reach out to have an activity that is free from computers and printers and robotics. So I think this s one of the great saving attributes of traditional photography.

If we really care about the medium, then it is our responsibility to foster an interest and appreciation in others and help those who ask questions and are just beginning the journey.

 

[Ed Sukach]

A totally digital world is mostly hype or wishfull thinking on the part of those in the industry.
I still remember the talk in the late 90s about how everyone would carry around digital books and book readers....

A thought... How many of us wear digital wristwatches?

There are some that do, but the massive obsolescence of "Anolog" watches never took place ... In spite of all the predicitions ... with absolute certainty ... that it would happen.

 

[Ed Sukach]

If we really care about the medium, then it is our responsibility to foster an interest and appreciation in others and help those who ask questions and are just beginning the journey.

Hear! Hear!!!

Absolutely.

And let us make it *true* help ... not an opportunity for "pumping ourselves up".

 

[Robert]

A thought... How many of us wear digital wristwatches?

There are some that do, but the massive obsolescence of "Anolog" watches never took place ... In spite of all the predicitions ... with absolute certainty ... that it would happen.

Used to but the thing took too much thinking. It's even worse with digital dashboards. How can a person drive in one of those video games?

 

[Jim Chinn]

Not exactly digital but on the idea of technology and hype- remember when everyone talked about using a microwave for all your cooking. An entire Thanksgiving meal for 12 from a microwave oven!

I have also discovered that for every computer game or gizmo that we buy or receive as a gift for our 2 daughters, there is a quick boredom and return to the classics. Blocks, legos, playdoe, pots and pans, stuffed animals, oatmeal containers etc.

 

[fhovie]

I work for a $5bil conglomerate that buys bloated mismanaged companies, gets rid of 40% of the people and then produces better products at better margins. It may be that this is where Kodak gets lean and mean. With the good part being mean. I just got home from vacation: Yosemite, Redwood Forest, Cedar Breaks - etc. I guess half the cameras were digital. mostly shots of the significant other with a neat backdrop. They will be "good enough" and less money (?) to print on the PC than the 35mm group. I still think 35mm is more convenient - no time on the computer to see a 4x6. Most of the shots I take with 35mm end at 4x6. My shots with the 4x5 will take a lot of time and will be large and some will call it art. I don't feel threatened. How long have we had McDonalds? There will always be the market for "good enough" fast and cheap. Where Kodak needs to worry is that it is mostly a chemical company with a great deal of its margins coming from medical and technical imaging. Digital is software and electronics. IMHO they should buy some companies that have that competancy (if they are not already doing this) Consumers will be happy with the Kodak brand in digital although Kodak holds the "first in mind" title for film (not cameras) and not yet do they have the "first in mind" for digital (cameras, processing or supplies).

 

[Sean]

I'm not sure what the future holds for Kodak but it seems like they are having an identity crisis of somekind. They had a niche, and now they are phasing out that niche and going into a market that's totally over saturated. With digital everyone is in the imaging game now. You have phone companies making digicams, watch comapnies making them, and companies who were strictly involved with pc components making them. The product lines are so similar that soon "brand" name will no longer be a concern. Kodak used to rely on that "brand" name and now they are moving from Queen ant to mere drone. They seem to be doing ok so far, but burning a lot of bridges to get there. Will it pay off? I don't know...

 

[Aggie]

..

 

[blansky]

I believe for any company it is hard to resist the gold rush that started with this "digital revolution". As I mentioned once on another post, when you went into a pro or semi pro camera store ten or fifteen years ago they all sold cameras, large and small format as well as lights and goodies. In their darkroom department they sold the usual darkroom equipment. Almost everything had dust on it from the lack of turnover. Once you bought it, it lasted for years.

When digital hit, they had a whole new cash cow, that generated huge amounts of money, partly because every photographer had to start over and buy everything new, and secondly the stuff is obsolete in a few months. Every photography magazine ( well almost) gets it's revenue from the digital ads, hence every story is about digital.

So I guess my point is all the conglomerates want a piece of the action and we all know conglomerates only care about one thing, the bottom line.

The people who will take care of us in the future are the boutique companies that care about analog-silver prints. After a few years and the conglomerates see that where they went is no longer working and they are missing huge revenues, they will buy up the boutique companies.

This happened in the movie industry. The conglomerates only cared about blockbuster movies and for a number of years only turned out crap. Independants started making small entertaining great movies and making money at it. The conglomerates then bought them all up and kept their independant names so the public would think they were still small independants.

Michael MCBlane