Discontinuance

Stephen Frizza · Nov 13, 2007

Ok im curious when a photographic material gets discontinued like say what kodak just mentioned in an alternate thread what exactly does the copmpany do
during the discontinuation, does a company make a small reserve of the material? do they set a last run then say its all over red rover? or do they just say nup no more, im not making this. all gone!

anyhow im just curious as to what happens to production levels of a material
in the weeks leading up to the last run. does it burn full steam ahead? producing a small surplus to be nice? hmm am i dreaming :-(

Kodak HIE why oh why!!!!!!!! hehehehehehe. I still cant get over it.

~Steve

David H. Bebbington · Nov 13, 2007

No special knowledge of particular photo manufacturers, but general industrial practice is to announce discontinuation ahead of actual cessation of production. This helps customers who are dependent on a particular product, they can stock up and then have time to experiment and find a suitable substitute product, it also helps the manufacturer by making it more likely that the last batch of a decreasingly popular product will sell out. It will usually not be possible to extend the discontinuation date because there will be a strict schedule for tearing down, selling on or scrapping the production machinery and re-using the production building! Sometimes stock will be in the distribution chain for months, even years, after the discontination date, sometimes (as, for example, with Pentx 35 mm film SLRs in the UK), stock vanishes almost overnight (e.g. a multinational company pulls all stock from slow-selling markets and re-routes to another market.

PHOTOTONE · Nov 13, 2007

FILMS are made in "runs". There may be only one "run" a year of a slow moving film, such as Kodachrome. I think the company evaluates the sales when it gets close to time to schedule another run, and if projected sales do not make it over the break-even point in dollar value, then the "run" is canceled and the product is announced as discontinued on a certain date, based on what remaining inventory the company has of the product. At times, the remaining inventory is several months worth.

Silverhead · Nov 13, 2007

Unfortunately sometimes the inventory is nil, as was the case of Kodak EIR. Kodak said that they were going to have several month's worth of the film available from its last run, and then weeks later made the announcement that they were discontinuing the film...and that there were no reserves left or anything. I can't tell you how much this pissed me off. I had to scramble to find any rolls that were still in local stores, as all the biggies (B&H, Calumet, Freestyle, etc.) had been cleaned out immediately after the announcement, or had nothing in their inventories to begin with due to Kodak not fulfilling its back-orders. A great way to alienate your customers I think you'll agree.

Photo Engineer · Nov 13, 2007

Sometimes, the intent is there to have several months worth, and then upon customers reading the announcement, there is a run on the product and suddenly there is no more on the shelves. So this can backfire.

When Kodak got out of the paper business, there was a run on Kodak paper at the stores and they suddenly sold out. This was especially true of Azo. So what was to have been months of supply turned into weeks.

PE

dslater · Nov 13, 2007

With all these discontinued products, I wonder how many people at Kodak have lost their jobs?

Dan

Photo Engineer · Nov 13, 2007

Dan;

That has been posted here many times. Kodak has gone from about 120,000 world wide to about 50,000 or less world wide or less. Income has dropped from $20B for film to $2 B total with film being about $1B.

This is not untypical of most major film companies.

PE

dslater · Nov 13, 2007

Photo Engineer said:
Dan;

That has been posted here many times. Kodak has gone from about 120,000 world wide to about 50,000 or less world wide or less. Income has dropped from $20B for film to $2 B total with film being about $1B.

This is not untypical of most major film companies.

PE

most unfortunate - it's a bit surprising about about Kodak's income. I thought their digital offerings were quite popular - things like the easy-share cameras, paper and such.

Dan

Sirius Glass · Nov 13, 2007

Photo Engineer said:
Sometimes, the intent is there to have several months worth, and then upon customers reading the announcement, there is a run on the product and suddenly there is no more on the shelves. So this can backfire.

When Kodak got out of the paper business, there was a run on Kodak paper at the stores and they suddenly sold out. This was especially true of Azo. So what was to have been months of supply turned into weeks.

PE

PE,

You are correct. When a product discontinuation comes out me must rush to our distributors and buy out whatever we can to keep the remaining product from the hoarders!

That is what I did with 120 UC 400.

Steve

PHOTOTONE · Nov 14, 2007

dslater said:
most unfortunate - it's a bit surprising about about Kodak's income. I thought their digital offerings were quite popular - things like the easy-share cameras, paper and such.

Dan

There is a much narrower margin of profit on digital goods. So even with popularity, profits are slim in the point-n-shoot arena that Kodak chooses to participate in. Profits are greater in the Prosumer DSLR field, but Kodak doesn't compete in that arena.

Neanderman · Nov 15, 2007

Photo Engineer said:
Kodak has gone from about 120,000 world wide to about 50,000 or less

Income has dropped from $20B for film to $2 B total with film being about $1B.

Ouch! What is the time frame?

Photo Engineer · Nov 15, 2007

About 10 - 15 years. I don't have an exact time frame, I just know the figures 'then' and now.

PE

aldevo · Nov 17, 2007

PHOTOTONE said:
There is a much narrower margin of profit on digital goods. So even with popularity, profits are slim in the point-n-shoot arena that Kodak chooses to participate in. Profits are greater in the Prosumer DSLR field, but Kodak doesn't compete in that arena.

It's not a matter of Kodak "choosing" to participate in a low-margin area. I believe it's really the only available market for them.

Right now the DSLR market is the only digital camera segment with healthy margins. But the cost of playing in that market are enormous.

Konica Minolta who certainly possess a long and generally successful history in the film SLR market could not compete in digital DSLRs. Olympus and FujiFilm are generally failing here, too.

Even when Kodak competed in this market they were doing so solely with Nikon F mount lenses and Sigma-provided camera bodies. Kodak electronics, yes, but much of the remainder was outsourced. Once Nikon and Canon released full-frame cameras with equiavalent or better electronics - Kodak was clearly a goner here.

I doubt that Kodak (or anybody else) has the resources to develop the camera bodies and lenses to compete with Nikon, Canon, and Sony at this stage.

PHOTOTONE · Nov 17, 2007

aldevo said:
It's not a matter of Kodak "choosing" to participate in a low-margin area. I believe it's really the only available market for them.

Even when Kodak competed in this market they were doing so solely with Nikon F mount lenses and Sigma-provided camera bodies. Kodak electronics, yes, but much of the remainder was outsourced. Once Nikon and Canon released full-frame cameras with equiavalent or better electronics - Kodak was clearly a goner here.

I doubt that Kodak (or anybody else) has the resources to develop the camera bodies and lenses to compete with Nikon, Canon, and Sony at this stage.

That is not quite correct. The only Sigma-provided bodies were for the last Kodak branded Canon mount DSLR, this is because Sigma had a license to manufacture cameras and lenses with Canon mount.

The last Kodak brand Nikon mount DSLR the SLR/n, and the just previous model the 14/n used A Nikon N80 sub-assembly for shutter and lens mount, in a US made and assembled custom-cast body shell. It was an American built camera with international parts. I know I have a couple of them.

John Shriver · Nov 22, 2007

Kodak is very different from the semiconductor industry. They announce discontinuance, and accept any and all orders. They fill those orders in full, even if it requires manufacturing more parts. Then they scrap the production line that made those chips. (For instance, I remember years ago Signetics shut down the gold-doped 3" wafer line that made the DM8556 integrated circuit.)

Nobody would be willing to design a "sole source" chip into a product if the semiconductor industry didn't run this way.

aldevo · Nov 24, 2007

PHOTOTONE said:
That is not quite correct. The only Sigma-provided bodies were for the last Kodak branded Canon mount DSLR, this is because Sigma had a license to manufacture cameras and lenses with Canon mount.

The last Kodak brand Nikon mount DSLR the SLR/n, and the just previous model the 14/n used A Nikon N80 sub-assembly for shutter and lens mount, in a US made and assembled custom-cast body shell. It was an American built camera with international parts. I know I have a couple of them.

I'll certainly take you at your word regarding the SLR/n and 14/n but it is absoutely true that Kodak used sub-assemblines from Sigma in the DCS-690x series.

After I got laid off from a dot.com in early 2001 I worked at Draper Labs where they had purchased about a half-dozen of these. Since there was the prospect of these cameras being used for DoD work they had to contact the vendor (Kodak) to find out where they components were sourced (GSA regs require you to specify suppliers providing more than a certain % of content by value). And Sigma Aizu was definitely one of the names provided by Kodak.

Anyhow, this is neither here nor there, as these are mere toys after all...

donocelotl · Dec 7, 2007

I hope a film company picks up the Kodak EIR formula and makes a version of this film. I just started to use this film in a studio setting a year ago.

Here are two examples:
Merrie
Amy

Hmm...With the aid of my engineering background, I wonder how hard it would be to make this film myself. Hey, I'm desperate!

dpurdy · Dec 7, 2007

A company can announce it's plans but the photographers have to be paying attention. I keep getting caught unaware. I didn't know PlusX 220 was going till it was gone. Also back in the day I was caught completely off gaurd with the discontinuance of Agfa 25 in sheets, my standard film. Soon after I went to the store to buy a box of Portriga and found the label had changed and it was "new and improved". My heart sank and for good reason. The new and improved paper was complete crap. I started phoning all around the country to find unimproved paper in stock and it turned out I was one of the last to know and place after place had no old stock.

bob100684 · Dec 8, 2007

PHOTOTONE said:
There is a much narrower margin of profit on digital goods. So even with popularity, profits are slim in the point-n-shoot arena that Kodak chooses to participate in. Profits are greater in the Prosumer DSLR field, but Kodak doesn't compete in that arena.

margins on DSLRs are low too. A rebel XT netted my former employer a grand total of $3.50 in profits. An XTI got $12.

aldevo · Dec 9, 2007

bob100684 said:
margins on DSLRs are low too. A rebel XT netted my former employer a grand total of $3.50 in profits. An XTI got $12.

Was your former employer a retailer or Canon, itself? A retailer may have lousy margins and the manufacturer may fare much better.

Brick and mortar consumer electronics retailers have wafer-thin profit margins. Most industry analysts have noted that Canon's healthy profit margins are being fueled by the DSLR boom.

Nigel · Dec 9, 2007

Photo Engineer said:
Dan;

That has been posted here many times. Kodak has gone from about 120,000 world wide to about 50,000 or less world wide or less. Income has dropped from $20B for film to $2 B total with film being about $1B.

This is not untypical of most major film companies.

PE

Each quarter, I do a bit of number crunching on Kodak's numbers and use it as a proxy for the film industry. My most recent look at Kodak's numbers agree with PE's observation - film and related products represent about $1billion in net income. And Kodak represents 40-60% of the industry depending on what sources you look at.

Although we have seen a big drop in film sales and net income, it remains a sizable market. Big enough that should Kodak exit the film market, it would be an interesting market to another company. As well, over the past few quarters, it appears that film and related sales have started to stabilize.

The biggest problem now facing Kodak (as opposed to a few years ago) is legacy costs. This is the cost associated with the pensions and benefits for former employees and current employees. The closing and sale of plants and product lines are a means of dealing with those costs. It looks to me like film will remain a viable product line for either Kodak or its successor companies.

Snapshot · Dec 9, 2007

If film sales and usage has started to stabilize, it seems we are entering a time when film companies will start to invest and deploy new technologies. Who would want to do any R&D in a market that shrinking dramatically? I think this is good news, despite the recent discontinued products of late.

Discontinuance

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