Fuji apparently ceasing motion picture film production -- what are the consequences?

The catharsis in film right now is almost unbearable. Adox notices everyone that they are exiting the business. Lucky is closing up shop for color film. Kodak is a walking corpse and now, Fujifilm. I always thought that Kodak would go belly up and hopefully allow Fujifilm to continue with making color film. Now it seems that it may be possible that both film giants meet their end simultaneously. Who would have thought that?

RattyMouse: Adox just released a new film at photokina.

A few Adox films were hit by the demise of fotokemika, but as far as I know from various discussions online, Adox will keep produxing films.

Maybe by discontinuing some of their cine films range that the demand is dropping for now that so many feature films are shot digitally, and film theatres are going digital,it's a commercial decision that may keep the company more financially viable, so it can carry on making still films .

Benji you can be sure that Fuji makes more money with MP Film than with still films.
The Indian Market used quiet a lot of Fuji Film, many EU Films have started using Fujifilm instead of Kodak. A vast number of Movies are still shot and released on film, sure less than in the past but still a pretty high number. Maybe the Fuji stockholders pushed the company to make this rash decision, shooting with Redor other digicams is not necessaraly cheaper than shooting with Film, the release is cheaper unfortunately. I am still hoping for some hackers that will crack the digital movie thingy and show the world how vulnerable the digital distribution chain really is. Stupid Beancounters. End of rant

Dominik

Having thought about this for a little longer, I've realized that this probably doesn't mean the imminent end of still films from them. The vast majority of the 35mm C-41 in stores now is either Fuji-branded or Fuji-made, so this is still enough (for now) to keep the coating machines running. My guess is that Fuji does not have one large coating machine (a la Kodak), but rather 2-3 moderate-sized ones. They've done the math, and have decided to shut down at least one machine, but to keep the other(s) running. My guess is that it didn't pay for them to put the significant amount of R&D in to remaster the chemical mixtures for the other machines, so they discontinued the stocks permanently.

What this does show, however, is that Fuji is a business just like Kodak (albeit a better run one), and they are no better than Kodak when it comes to keeping film around.

P.S. Harman, Foma, Fotoimpex, Orwo, etc. are all for-profit corporations as well. When they start losing money, you can bet that production lines will be cut.

Todd Anderson on Cinematography wrote this some time ago:
"I just saw the above few posts after my last post.. and then I put in a call to Fuji. It is now my understanding that they plan to stop selling negative stock in March. They obviously have plenty of negative stock in inventory at the moment, but it is seemed that they would hand over any remaining inventory after March to someone else (likely a broker?). I asked if they still planned to continue producing still film stock, and the customer service persons reply was, "Oh, yes. We are still committed to that market. There are a lot of artist still using film in that market". I guess she didn't see that she was pointing out that filmmakers aren't considered artist, as well. That they don't require such tools. This is all pretty sad."

So from this it would seem that they are committed to still photography even after ceasing MP stocks...

With two big 70mm pictures about to come out (Samsara and The Master) I was thinking we might have the beginnings of a movement. Not to mention Christopher Nolan and Tarantino being champions of film. Terrence Malick is partial too - apart from those dinosaur sequences. Also, Malick was once upon a time given free rein as an 'artist', also receiving financial backing from the studio to do whatever he liked. If only the big studios could manufacture film on demand for filmmakers who have the artistic license.

nickrapak said:

Having thought about this for a little longer, I've realized that this probably doesn't mean the imminent end of still films from them. The vast majority of the 35mm C-41 in stores now is either Fuji-branded or Fuji-made, so this is still enough (for now) to keep the coating machines running. My guess is that Fuji does not have one large coating machine (a la Kodak), but rather 2-3 moderate-sized ones. They've done the math, and have decided to shut down at least one machine, but to keep the other(s) running. My guess is that it didn't pay for them to put the significant amount of R&D in to remaster the chemical mixtures for the other machines, so they discontinued the stocks permanently.

What this does show, however, is that Fuji is a business just like Kodak (albeit a better run one), and they are no better than Kodak when it comes to keeping film around.

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You are stating this as though it is fact. How long did it take you to convince yourself of the truth of all of your unfounded musings? Or do you actually have some evidence to back up your realizations?

nickrapak said:

P.S. Harman, Foma, Fotoimpex, Orwo, etc. are all for-profit corporations as well. When they start losing money, you can bet that production lines will be cut.

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This I agree with.

SkipA said:

You are stating this as though it is fact. How long did it take you to convince yourself of the truth of all of your unfounded musings? Or do you actually have some evidence to back up your realizations?

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Skip,

Note the words "probably" and "my guess". The coating theories are my assumption; the only thing I am stating as fact is that Fuji leads the market in 35mm consumer still film sales. This assumption is mostly driven by the fact that most retailers have 3 brands of film: Kodak, Fuji, and a store brand. Since all other color manufacturers have closed up shop, all of the "Made in Japan" store brand film is coated by Fuji. Add to that the fact that the largest retailer in the country (Walmart) only stocks Fuji film, and one could easily see where they are the market leader. The other musings are mostly driven by the fact that I can't see Fuji dropping their consumer C-41 film, especially due to the lucrative contracts that they have with the aforementioned retailers. Of course, if film and disposables really dropped off that much in the past year, I can see Fuji dropping everything.

Actually NHK reported tonight that Fuji is pulling the plug on all their movie films, both for capture and projection. Fuji did say are going to keep the still film production going, though on a much smaller basis. Batch runs and the like. Production on all movie films will cease in March of 2013, but again still film production will continue.


Gary

They could not compete with Kodak's latest "Vision3"-line in an already small market. Over the last years, Fuji was mainly used by filmmakers on a budget (e.g. "The King's Speech"), because they were simply cheaper, but anyone who wants to shoot cheap these days, uses on of the lousy Red Ones.

There are still major productions made on film (Dark Knight, Expendables, Cloud Atlas, The Master...), but this will become 100% Kodak territory.

This might be a good thing for Kodak (or follow-ups), as Hollywood has some interest in keeping film alive as a medium.

Georg

[inserting normal knee jerk response]

See that is why we cannot trust Kodak!

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[/inserting normal knee jerk response]

Unfortunately when the film companies cannot make a profit on a film line, they discontinue it. Yes, you Kodak-haters, even Fuji has been know to discontinue films.

Official Notice from Fujifilm

Here it is officially in Japanese.

http://fujifilm.jp/information/articlead_0174.html

They claim that they will still manufacture "archive" motion picture film （i.e. ETERNA-RDS）.

But that is about it for motion picture related AgX film products and finish selling all other AgX motion picture film products (including chemicals for processing cine films for domestic customers) somewhere around March 2013.

They comment that they continue manufacturing film for still photography.

jun

Translated: http://translate.google.com/transla...lm.jp/information/articlead_0174.html&act=url

This is the key line: "In addition, with regard to photographic film, we will continue to produce and sell in the future."

I hate to point it out, but this does then call into question the current working assumption that the only thing holding still film's head above water is motion picture film. That without the latter's economies of scale, the former absolutely cannot exist on its own.

Presuming that they are not intentionally lying in their notification release, what then is different about Fujifilm?

Ken

I noticed that too, Ken. The cynic would say they are lying. Others might surmise that the death of MP film is not necessarily the death of all film.

Then again, it is color film that people mostly seem to link to MP. B&W seems to be able to exist on a much smaller scale, without the need for MP to support it.

SkipA said:

Then again, it is color film that people mostly seem to link to MP. B&W seems to be able to exist on a much smaller scale, without the need for MP to support it.

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That's true. But Fujifilm's notification announcement seems to be saying they will continue producing all of their still films, including color.

Maybe they have multiple coating lines with one or more being dedicated solely to motion picture-related film types? And different one(s) dedicated to still film types? And the still film lines are capable of producing reliably in smaller runs?

If that's the case, then shutting down larger MP lines might indeed have less effect on any remaining smaller still lines.

Something in Fujifilm's model does seem to be different.

(Just speculating out loud on my lunch break...)



Ken

Hello,

here is the official statement in English, that photo film production is continued:

http://www.fujifilm.com/news/n120913.html

And here the news that a new Instax instant film camera is introduced, due to increasing demand from China and other Asian countries:

http://www.fujifilm.com/news/n120912.html

Ken Nadvornick said:

I hate to point it out, but this does then call into question the current working assumption that the only thing holding still film's head above water is motion picture film. That without the latter's economies of scale, the former absolutely cannot exist on its own.

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I've always had my doubts about this 'working assumption' (especially concerning Fuji), simply because motion picture film is not the analogue photo product with the highest production volume (based on m²).
The analogue photo product with the highest production volume is RA-4 photo paper, a market with 800 - 900 million m² production p.a.. And a much more stable market than motion picture film (data based on market research by Schoeller, one of the biggest manufacturers of paper base for photographic papers; and based on numbers of CeWe, Europe's biggest photo finisher, running lots of mass labs in several European countries).

Fuji is by far the world leading manufacturer of RA-4, with the biggest market share. And has increased it's market share during the last years (at the expense of Kodak, DNP, Mitsubishi).
From a technical point of view, it is possible to coat both film and paper on the the same coating machines. Ilford, Foma, InovisCoat, Agfa-Gevaert, Fotokemika are all doing exactly that (or have done that). It is state of the art. Ilford is furthermore coating their inkjet papers also on the same line as far as I remember right from Simon's statements.
At least not impossible or unlikely that Fuji is coating film and paper on the same machines.
If that is the case, then the production stop of mp film would indeed have little or no impact on their still film production.

Kodak is coating film and RA-4 paper on different lines, film in Rochester, RA-4 in Denver.
Their long term stabilising / survival option therefore could be to transfer RA-4 paper manufacturing from Denver to Rochester.

Ken Nadvornick said:

Presuming that they are not intentionally lying in their notification release, what then is different about Fujifilm?

Ken

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See above.

Best regards,
Henning

Thanks for additional insights, Henning. I always appreciate the clear thinking and the references included to back it up.

So then it might resolve down to having still film benefiting from the economies of scale created by another non-film coated product that shares the same production line. That would then be the crucial difference in Fujifilm's manufacturing model, allowing them to continue still film production.

If this is true, then it begs the further question of why Kodak wouldn't do the same? Providing, of course, that Kodak really wants to maintain their still film production in the longer term. I can't imagine that Kodak's level of coating sophistication or capabilities would be any less than Fujifilm's.

Ken

Ken Nadvornick said:

If this is true, then it begs the further question of why Kodak wouldn't do the same? Providing, of course, that Kodak really wants to maintain their still film production in the longer term. I can't imagine that Kodak's level of coating sophistication or capabilities would be any less than Fujifilm's.

Ken

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Well, Ken, maybe the production volume of RA-4 paper and film is currently still too big to be concentrated at only one production place, still too much volume for such a transfer.
Being it an option in the future at lower volumes.
But honestly, that' a guess.
As I've written in my first post, it could be an option in the long term.
We'll see.

Best regards,
Henning

Henning Serger said:

Well, Ken, maybe the production volume of RA-4 paper and film is currently still too big to be concentrated at only one production place, still too much volume for such a transfer.
Being it an option in the future at lower volumes.
But honestly, that' a guess.
As I've written in my first post, it could be an option in the long term.
We'll see.

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I suppose, yes.

But there are those here who are warning—and not without justification, it would seem—that Kodak's long term future may be measured in terms of only weeks. If true, and they have any rabbits left to pull out of their hats, right now might be a good time to think about doing that.

As you say, we'll see.

Ken

Ken Nadvornick said:

But there are those here who are warning—and not without justification, it would seem—that Kodak's long term future may be measured in terms of only weeks. If true, and they have any rabbits left to pull out of their hats, right now might be a good time to think about doing that.

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IMHO there's a bit too much panic regarding production of Kodak film in the future.

The fact that Kodak manage or don't manage to exit Chapter 11 procedures is important for Kodak shareholders, creditors and other stakeholders but is not material for the survival of Kodak film manufacturing provided that this business is and remains profitable.

If and when Kodak fails to emerge from Chapter 11 and "falls" into Chapter 7 (proper bankrupcty procedures, with sale of the entire firm to satisfy creditors) IF film manufacturing is profitable someone will take it at the final auction. Where there is a profit there certainly is a buyer in a normal world.

If, in that case, nobody is going to get the Film business it will be because there is no expectation that film manufacture can continue "in the long run" as an economically sustainable business. But that has nothing to do with the exit from Chapter 11.

The case may be that some potential buyer is actually waiting for Chapter 7 to buy the film business at a better price.

The fact that the Chapter 11 process will end by march 2013 or whenever in the short term does not mean that Kodak film is risking closure by that date.

Diapositivo said:

Where there is a profit there certainly is a buyer in a normal world.

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I hope you're correct. As Henning said, we'll see.

I'm certainly not in a panic. I wouldn't have just spent ~US$2,000 for a brand new medium format camera if I was. It looks like Ilford/Harmen and Adox have black-and-white nicely covered. And if the worst happens with Kodak, it's now begining to look like Fujifilm may have color covered as well. At least for a while.

But I don't necessarily share your optimistic sense that business—especially American business—will always act in its own best interest. It's far too dysfunctional for the simplification that they will just follow the money. I've worked for more companies than I can count (well, 10 or 12 I think), and the majority of them went belly-up in some fashion due to failures to apply even the most easily-reachable common sense logic.* But this is a topic for another discussion.

Except to note that if Kodak had been acting in its own true best interests over the last five or so years, they wouldn't be in the position they find themselves in right now.

So we'll see...

Ken

* Umm... tell me why we're spending a quarter million dollars to upgrade our office space when we haven't even sold a single product yet? What do you mean we're doing it to impress the investment community? It was their money in the first place! (Out of business less than 12 months later.)

Diapositivo said:

IMHO there's a bit too much panic regarding production of Kodak film in the future.

The fact that Kodak manage or don't manage to exit Chapter 11 procedures is important for Kodak shareholders, creditors and other stakeholders but is not material for the survival of Kodak film manufacturing provided that this business is and remains profitable.

If and when Kodak fails to emerge from Chapter 11 and "falls" into Chapter 7 (proper bankrupcty procedures, with sale of the entire firm to satisfy creditors) IF film manufacturing is profitable someone will take it at the final auction. Where there is a profit there certainly is a buyer in a normal world.

If, in that case, nobody is going to get the Film business it will be because there is no expectation that film manufacture can continue "in the long run" as an economically sustainable business. But that has nothing to do with the exit from Chapter 11.

The case may be that some potential buyer is actually waiting for Chapter 7 to buy the film business at a better price.

The fact that the Chapter 11 process will end by march 2013 or whenever in the short term does not mean that Kodak film is risking closure by that date.

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If Kodak goes Chapter 7, the disruption to their business will be enormous. Employees, the smart ones anyway, will be bolting left and right. No one will want to stick around during such a gut wrenching process. I've been part of a corporate take over (on the receiving end) twice which is far less dramatic than a chapter 7 auction. Each time, the loss of employees who bolted was enormous. The stress of the takeover was huge and many could not cut it. Even the time leading up to these events caused many to leave. I am sure Kodak is having employee retention issues today.

As PE has documented elsewhere, Kodak has massive production over capacity. Any new buy has that enormous problem to overcome.

Going back to one of my corporate take overs, we on the receiving end were all very worried about our jobs. We were bought from a company on the east coast while we were in Chicago. Everyone used every power available to rationalize that everything was going to be OK. That the new company would move into our building and close down theirs. Our building was brand new with a lot of space, while the buying company's was old, decrepit and way short of space. For 9 months we hoped for the best, then the news hit. Our facility was to close and almost everyone lost their job. In retrospect, there were an infinite number of warning signs that all our hopes were misplaced and sadly, I think that is true regarding the situation at Kodak. We'll see that when the dust finally settles.

RattyMouse I see your point by in your case your firm was bought by a competitor who had to "rationalise" the workforce after the take-over to squeeze the benefit.

I suppose, and also hope, that the Kodak film business would be bought not by a competitor in the US (there is none) but by some large corporation like 3M, P&G, Dow Chemicals etc.

The scenario you fear would be most likely if it was Fujifilm to buy the Kodak film business, as they would have to merge the two activities trimming out any redundancy.