How did kodak end up where it is?

[RattyMouse]

Kodak did try to use DVDs and CDs as consumables, but they seriously mis-estimated the price curve of these products. They lost $$.

PE

I used to buy Kodak VHS tapes!

 

[Steve Roberts]

I think there are many reasons (most of which have been outlined here) but additionally to those like me who started photography in the 1970s or before, "photography" was usually associated in some way with Kodak, Ilford, Agfa and a few others. Whatever brand of camera/lens you might buy, you'd probably use one of their products to shoot or print on. All of a sudden, the advent of digital cameras meant that photography became the domain of Sony, HP, Samsung, Panasonic and a wealth of others plus the computer and software people. Many of the results of these never got as far as being printed, so the materials market probably shrunk dramatically (my guess). Ilford and Agfa hit the doldrums some time ago and Kodak are a case of 'the bigger they are, the harder they fall'. I find it hard to see how Kodak could ever have competed when the photography market was suddenly thrown wide open to so many electronic giants. Perhaps if they'd realised the potential of the digital still camera they'd invented much earlier and invested a huge amount of money into patent protected development, they might have stolen a march on their competitors, but I suspect that would have been temporary. Perhaps diversification would have been the answer, as with Fuji, so that we could now be tucking into bags of Kodak Crisps (OK, 'chips' to those in the US).
Steve

 

[Photo Engineer]

I used to buy Kodak VHS tapes!

However, this same VHS tape was never suitable for production purposes because it stretched too much. This could mean that after several uses, a 1 hour program might run over by as much as 30 seconds (IIRC). The big networks never used it, and thus it was an amateur product only. Eventually, it died.

PE

 

[wblynch]

Opinions...

1) The major US Economic Depression must have had some impact.

2) Kodak abandoned film advertising and promotion. Adding fuel to the perception that, "no one makes (or uses) film any more".

3) Kodak should have bought Adobe

4) Kodak should have competed with Xerox in the early days and owned that "imaging" market.

5) Kodak doesn't realize they are in the industrial coating business, not the "picture" business. They should have leveraged those coating capabilities into new products beyond photography.

* Imagine if Kodak invented a way to coat automobiles and eliminate liquid paint and all the associated hazards *

 

[pbromaghin]

Opinions...

1) The major US Economic Depression must have had some impact.

I think that over the last 80 years Kodak had recovered quite nicely from that.

 

[wblynch]

We are in it now

 

[Photo Engineer]

Agfa, Ilford and a few other companies survived economic turmoil. Now we have assault on 2 fronts. This is worse than ever before and so I would have to agree with the statement that the economy has hurt EK. See the thread on EFKE.

PE

 

[pbromaghin]

The economy has hurt, but to call this a depression is utter nonsense and shows a complete lack of historic perspective and knowledge.

 

[RattyMouse]

The economy has hurt, but to call this a depression is utter nonsense and shows a complete lack of historic perspective and knowledge.

Totally agree.

 

[Photo Engineer]

I was alive and kicking during the great depression. Since a war was joined with it, it is hard to make comparisons with it. Only a historical analysis will be able to tell us how they compare.

PE

 

[pbromaghin]

Well, according to the US Dept of Commerce's Bureau of Economic Analysis, the US GDP shrank (or "receded", hence we had a "recession") in Q2 and Q3 of FY 2008. It has grown (however slowly) every quarter since then. That doesn't fit any definition of a depression I've ever heard, and to declare it as such is to insult people like PE who were actually there. Hell, even the late '70s and early '80s (when I was trying to get a start as a breadwinner), while not comparable to the 1930's, were far worse worldwide economic conditions than we have now.

 

[Photo Engineer]

Well, if you look at the middle class, home reposesions, the number unemployed, the stagnation of the stock market, the condition of the Euro in Greece, Spain, Italy and etc... Something is going on!

Lets call it a global economic meltdown.

And calling it a depression is not taken as an insult. Things are bad right now any way you look at it.

PE

 

[wblynch]

Doesn't have to be the "Great Depression" to be a depression.

If you've lost your home, your job, your life savings and had your pension stripped away right in front of you, you would consider it a depression.

A great many people find themselves in that position.

Face it, the US has stripped the working class of most of it's wealth and income.

Has to affect frivolous purchases -- like film.

 

[Photo Engineer]

Doesn't have to be the "Great Depression" to be a depression.

If you've lost your home, your job, your life savings and had your pension stripped away right in front of you, you would consider it a depression.

A great many people find themselves in that position.

Face it, the US has stripped the working class of most of it's wealth and income.

Has to affect frivolous purchases -- like film.

That was my point with efforts to leave out all of the pain!

PE

 

[benveniste]

Kodak invented the digital camera. Though it is understandable that they were afraid of developing it at the time due to the threat it would pose to their film business, what was the thinking at the company that caused them to remain film centric after both their competitors and previously non photographic companies had begun to gain ground in the digital market?

Kodak made multiple efforts to avoid becoming "film centric," but there were a lot of failures along the road. Remember the KODAVISION 8mm video system? KEEPS? Kodak IMAGELINK Copiers? OPTISTAR printers? ULTRALIFE and SUPRALIFE batteries? Me neither. How about their "catch and release" of Sterling Drug?

When a company has a "cash cow" as Kodak did with film, all too often they forget how to innovate. Look at Kodak's own Milestones for the 1990's. How much real innovation do you see?

Why did they not streamline their film business in order meet the new, smaller demand for film?

Streamlining of that type is extremely difficult. Everything, from manufacturing to the distribution and even corporate organization is designed for large scale. Your mid-level managers are often ill-suited to running a more streamlined operation, and since many of them will end up losing their jobs a turf war is inevitable. Kodak tried shrinking its way to profitablity, but it didn't work.

Also, why have they cut back on transparency film and kept lower end consumer film, which is surely a faster shrinking market?

Transparency use among commercial photographers shrank extremely quickly, and it was a smaller market to begin with. My local lab stopped processing E6 film about 2 years ago because the chemicals were going stale.

At what point did Fuji really gain the upper hand over Kodak when it came to digital?

Fuji was also a "me too" player in digital. But since they were a more diversified company than Kodak, they were able to survive the shift a bit better.

Why did Kodak move away from the professional end of digital photography and concentrate on the lower profit consumer end when they had less experience in the latter?

Because they knew once Canon got serious about dSLR's they couldn't win. Kodak wasn't a chip maker and hadn't made professional grade still photography gear for decades. For example, take a look at the Kodak DCS 14n. It was built around Nikon's N/F80 instead of the F100 or even F5, and everything about it shouted cost cutting in all the wrong places. Nikon was in a similar fight for survival. It won, but even with some big advantages over Kodak it was a very near thing. Had a couple of critical products not been as good as they were, Nikon would where Pentax is today.

Kodak thought it understood consumer photography and that expertise would transfer over to digital. In reality, they had been playing catch-up in consumer photography rather than leading. When consumers were buying cameras like the Canon AE-1, Olympus XA or even the Canonet QL, Nikon literally had nothing to offer. It took them until 1986 to make a 35mm point-and-shoot. They let other companies take the lead in everything from minilabs to disposable cameras. APS wasn't a bad system, but at the end of the day, the convenience features didn't make up for offering lower quality at higher processing costs. With enthusiasts staying with 35mm and more casual users opting for disposables, APS never really found a niche.

If digital had not arrived, where would Kodak be today? Would they have stagnated anyway in terms of creativity (APS didn’t exactly take of as the company had hoped) and been overtaken by more modern and creative companies regardless of the invention of digital?

They'd still be sharing a cash cow with Fuji on film, which, as it did from 1980-2000, serve to mask the fact that Kodak had forgotten how to innovate and compete. So while Kodak wouldn't be a healthy, growing company, it would probably hold on for an extra decade.

 

[pbromaghin]

Doesn't have to be the "Great Depression" to be a depression.

If you've lost your home, your job, your life savings and had your pension stripped away right in front of you, you would consider it a depression.

A great many people find themselves in that position.

Face it, the US has stripped the working class of most of it's wealth and income.

Has to affect frivolous purchases -- like film.

If you lose your job, it's a recession. If I lose my job, it's a depression.

Since you don't like what the words really mean, but you have a "feeling", then you want us to change the the whole damned English language to fit your "feeling". It's exactly this kind of mutton headed thinking that got us into this predicament. Back in the 80's I got laid off 3 times, as a sole breadwinner with a wife, a baby, and a home to keep together. It scared the living shit out of me, but I never once blamed anybody else for my problems or waited for the government to come and save me. I went and did any damned thing I had to do to keep body and soul together.

My parents, and my wife's parents, lived through a real depression. You couldn't BUY a job. People died of starvation. When I think of how hard their lives were, it makes me cry. I know I'm not half the man my dad was because of this.

No matter what, you've got to get up, leave the cave, kill something, and drag it home.

 

[wiltw]

The analogy...Just as railroads failed to understand that they were in the 'transportation industry', they failed to progress in a way to accomodate new means of transportation that were faster (airplanes) or more flexible in where they could go (trucks).

Kodak failed to adequately recognize that they were in the 'imaging industry' and that electronic cameras could get news photos diseminated faster, that digital media could provide a suitable alternative to film cameras, and that cell phones would have cameras in them and eliminate the need for more conventional cameras (even digital ones). Where they saw the handwriting on the wall in medical imaging, with a presence in that area for over a decade, they missed that movie producers and studios would abandon film distribution for the economies of digital distribution. They concentrated on the wrong aspects of digital medical/dental, and spent money on integrated medical image archiving, but did so too late, where established vendors had established stronger footholds. They failed to innovate digital Xray systems for dental applications and body xray, where they could sell devices to dentists and doctors and hospitals...they left the money on the table to traditional medical imaging equipment companies who had CT scanners and MRI scanners, and left money on the table to the new dental xray startups.

They made tons of money via supplying film for movie shooting and movie prints, but they absolutely failed to see the money that could have been made in designing digital projection systems for movie theaters.

 

[Alan Johnson]

It looks like it has been difficult for Fujifilm too:
http://www.nasdaq.com/symbol/fujiy/interactive-chart
Under the chart click on max, it gives the share price 1992-2012.

 

[batwister]

Opinions...

2) Kodak abandoned film advertising and promotion. Adding fuel to the perception that, "no one makes (or uses) film any more".

I still don't understand this, never will.

 

[Monophoto]

In most MBA programs, they teach a course with a title something like "Destroy Your Own Business". The point of this course is to teach the bright young business leaders about the need to be sensitive to trends that jeopardize their core businesses. The basic idea is that business leaders should be constantly looking for new business opportunities that represent significant threats, and should invest in those businesses.

I think the problem is that the geniuses at Kodak slept late on the day that their professor gave the lecture about making sure that the new business includes a role for your company.

Yes, Kodak invented digital photography, but they naively assumed that because they were the industry leader in conventional photography, that role would automatically fall to them when the market shifted to digital. That was a monumentally bad assumption.

 

[Simon R Galley]

Dear Pro-Pixel...

Todays spooky fact.......

Everyone at ILFORD Photo / HARMAN technology Limited knows well the story of Knut... and we have a very nice mosaic in our local town of Knutsford to celebrate the fact...as our town is named after Knut.

Simon ILFORD photo / HARMAN technology Limited :

 

[Ian Grant]

Many of use in Kodak in the '80s and early '90s understood the transition that was coming. Several of Kodak's early digital products (RFS-2035, Premiere Image Enhancement System, Prism, and Photo CD for example) were hybrid products, meant to ease the transition into digital.

Film was (and still is) a very mature product that has a manufacturing process that has been perfected over many years and had (has) a high profit margin. The profit margins on equipment were never good and digital cameras and equipment looked to have low profit margins as well.

Kodak lacked the managers with imaging industry vision to figure out how to make the transition work (APS was a dreadful failure) and figure out what the new Kodak was going to look like. Note, this required a willingness to give up some short term profit to gain future profit and the managers pay incentive plans made that unlikely.

A very good insiders view point, add to that Matt King's comments about distribution and that's about right.

As an example of how little the sales and marketing departments at Kodak understand their product Kodak in the UK were sill trying to sell K64 to dealers after Dwayne's had ceased processing Kodachrome.

A major issue with Kodak films is that in many countries distribution of consumer colour films and minilab consumables has been quite good but with the loss of B&W papers distribution of B&W papers and chemistry became poor.

The advantage Ilford has is they sell their own products, film, paper & chemistry, and distribute for Paterson so a slaes team has more to sell a retail outlet.

Kodak's major disadvantage now is they sell to Office equipment suppliers/computer stores for their Digital consumer printers, minilabs etc, but if a minilab's using Fuji/Agaf etc materials then there's nothing they can sell them. They have very little to sell to an average camera store any longer.

Kodak still have good people in the coating division but the coporate structure lets them down badly.

Ian

 

[PKM-25]

I wonder how much business Kodak has lost to people blabbering on the Internet instead of taking pictures......I bet it is a ton.

 

[Ken Nadvornick]

For a lot of people, these threads are like therapy sessions.

Kodak's situation has been beyond its film customers control at any level for a long time now. It's fate is out of our hands. No matter how much or how little film we purchase, it won't matter. The forces buffeting Kodak are huge and far beyond us at this point. It's like seeing a massive storm throw a cargo ship up onto the rocks and beat it to pieces. All you can do is cringe, cover your face, and watch between your fingers. But you can't stop the storm. Or save the ship.

Ken

 

[Ian Grant]

I wonder how much business Kodak has lost to people blabbering on the Internet instead of taking pictures......I bet it is a ton.

Some of us have been extrememely frustrated trying to get Kodak films, in my case Tmax 100. For the past 6 years I've had to fly with all the films I thought I'd use before my next UK visit home when I run out I have to replace locally, postage from abroad has proved unreliable (50% of packages not arriving) or just not possible when your visiting countries for the first time.

So I speak from first hand experience of finding it near impossible to buy the Tmax 100 & 400 films I required in Turkey, Chile, Peru etc. I've shot Tmax since it was released and after APX100 was discontinued in sheet film it became my only B&W film. I've found Ilford films everywhere and more surprisingly Foma so I had no real option other than switch.

It's no secret that when Kodak subcontracted distribution around the world they lost a lot of business. In the UK Sangers took over distribution and ended up going bankrupt, the new distributors are the ex-employees from the Kodak distribution department and they know what they are doing and are efficient.

The bottom line is if I walk into my nearest UK photo-store there's no Kodak products (analog or digital), but there are Ilford & Fuji.

Ian