It's official, Kodak is selling its film business.

[Grain Farmer]

Grain;

Here is a scenario.

Engineer X is retired. He coated EIR. Engineer Y was laid off. He coated E6. Company A made the IR dye and wants $100,000 up front for the dye, and company B made 3 or more critical chemicals for E6. It will cost about $1M to restart under these conditions.

The ROI is $10,000 based on sales at the end of production.

How do you proceed?

PE

I wouldn't obviously. The ROI is way to low. And I agree that the conditions for restarting discontinued film lines in America/Canada make that very unlikely. However, I reckon that the ROI would be much, much higher if E6 was competitively priced, and competitively manufactured. And I think there is a very strong market in China for reasonably priced E6. I also know that the Chinese have the ability to make things at a much lower cost than in North America.

I will continue to shoot and support Fuji E6 films, but I know many people who would love to shoot E6, but simply cannot afford to because it costs upwards of $15 a roll to shoot and develop. That price happens to be close to the average salary in China. Can you honestly imagine spending an entire days salary on one 36 exposure roll of film?

I think having a lower cost option for slide film would bring more people into the fold as an entry point, and thus be more of a boon to Fuji and the film photography movement in the long run when those people who could only afford the cheap stuff, start to make more money, and become more serious, and thus want to experiment with the higher quality Fuji products.

 

[Ken Nadvornick]

Here is a scenario.

Engineer X is retired. He coated EIR. Engineer Y was laid off. He coated E6. Company A made the IR dye and wants $100,000 up front for the dye, and company B made 3 or more critical chemicals for E6. It will cost about $1M to restart under these conditions.

The ROI is $10,000 based on sales at the end of production.

How do you proceed?

Treading very lightly here...

You begin the task of rebuilding the film markets that were hobbled by the initial digital wave and, in Kodak's case, ignored by upper management. This will not be easy, but it's not impossible either. In fact, it's already been done by Impossible. Conventional wisdom holds that their market niche—analog instant photography—should have been the "extinctest" of the extinct. The first to go, with the least chance of any to ever come back.

And yet...

Did you see? Today they announced limited first availability of their resurrected 8x10 instant film. It's not peel-apart. It's integral. And it doesn't appear—as do any of their new products—to be anything like the original Polaroid products. Or the even better Fujifilm products. Nevertheless, 250 packs have been allocated for sale in the USA. Wanna' bet how long it takes to sell them out at $189.99 each?

If TIP can rebuild the market for Polaroid camera-compatible instant films with such admittedly sub-par offerings—and they have and are doing quite well, thank you very much—what could a post-Kodak company do with products that are still the best in the world? Actually, the best in the history of the medium?

They would just need to be run by people who really, really wanted to manufacture, market, and sell film products. TIP knows this. Ilford knows this. ADOX knows this. The current Kodak upper management did not know this. Even when their survival as a digital-company-in-waiting was on the line and they just needed the temporary film bucks. They figured instead that blowing up their old film buildings for the nightly news and Wall Street tech analysts was somehow a better road to success.

Your ROI figure of $10,000 is for market conditions in the past. It's why those products are no long made. A post-Kodak needs to (re)create far better market conditions for their future, if they hope to survive. And no one else is going to do that for them. But if they could add two more zeros to that figure, then they could train a new Engineer X. And rehire Engineer Y. And find a way around Companies A&B.

All of the other current survivors have done it. They did it because they had to. And more importantly, because they really, really wanted to...

Ken

 

[Steve Smith]

But think about this.. What is going to happen when they become an Economic Super Power like the EU and NA.. seriously, what will happen?!

They already are. We had our turn with the British Empire, then it was the turn of the US, now it's China's turn to be the manufacturing centre of the world. There's nothing you can do about it.


Steve.

 

[mikendawn]

Yeah, I know, Steve... I just don't want to see yet another North American company go and turn into a Chinese company..

I can't help but think of a sticker I saw a few years ago...

"Still have a Job? Keep buying Foreign!"...

And that's where we're headed. There was a documentary a couple of years back that I remember watching called "Made In Canada.."
It was about a Canadian family that would only buy things that were, well, "Made in Canada".
They would spend a bit more for items that are Made In Canada, and would have an incredibly difficult time finding items that weren't made in a foreign country.

Of course, the biggest culprit company for this..

Walmart...

 

[Steve Smith]

Back in the 1980s a TV news programme did an experiment. One family had to buy British and another had to buy best. Only one item was common to both families and that was a television. No chance of that happening now.


Steve.

 

[Felinik]

So what if Kodak's still-film business could be saved moving to Chinese production?

It wouldn't be the first time a company in the western world does the math and understands the longterm effect of globailzation.

 

[RattyMouse]

Yeah, I know, Steve... I just don't want to see yet another North American company go and turn into a Chinese company..

I can't help but think of a sticker I saw a few years ago...

"Still have a Job? Keep buying Foreign!"...

And that's where we're headed. There was a documentary a couple of years back that I remember watching called "Made In Canada.."
It was about a Canadian family that would only buy things that were, well, "Made in Canada".
They would spend a bit more for items that are Made In Canada, and would have an incredibly difficult time finding items that weren't made in a foreign country.

Of course, the biggest culprit company for this..

Walmart...

What cameras are made in Canada?

 

[Diapositivo]

At the beginning of the XIX century Ricardo gave a beautiful and elegant explanation of why international trade happens, and how it benefits all countries involved.

He makes a nice example of a world with two countries, Portugal and England, and two products, tissues and wine. He demonstrates that even if England had an advantage (lower cost) in producing both tissue and wine, it would be in any case in the interest of both countries to exchange ware. If the competitive advantage of Britain in tissue production is bigger than in wine production, it would make economic sense for both Portugal and England to trade, England selling tissues to Portugal and Portugal selling wine to England.

This still holds true today. International trade happens because all parties (countries) benefit. Of course, if a trade barrier had suddenly disappeared between England and Britain, the only ones who would lose are tissue producers in Portugal and wine producers in England. The rest of the respective countries benefit.

International trade is good and is not a small part of the economic progress of the world.

Think of it this way - to simplify: now the US as a whole can buy cheap furniture assembled in China. The money they save can engender new capital which in turn will develop new products, new ideas at home. So the US now produce less furniture and more Google (or more insurance, or theme park, or whatever).

Ultimately the trade balance, in the long run, must be even (must balance). You cannot really buy more from China than what you sell to China. The reason why you buy furniture from China is not different from the reason why England would buy wine from Portugal.

"Closing" international trade (pursuing autarchy) just leaves you with expensive furniture and awful English wine .

Autarchy is a counterproductive objective to pursue. That would mean expending Canadian tax-payer money to keep alive a Canadian camera manufacture who would not be competitive, only for the sake of the few workers in the Canadian camera manufacturing industry who would in any case be doing something else just as they do.

 

[Roger Cole]

I wouldn't obviously. The ROI is way to low. And I agree that the conditions for restarting discontinued film lines in America/Canada make that very unlikely. However, I reckon that the ROI would be much, much higher if E6 was competitively priced, and competitively manufactured. And I think there is a very strong market in China for reasonably priced E6. I also know that the Chinese have the ability to make things at a much lower cost than in North America.

I will continue to shoot and support Fuji E6 films, but I know many people who would love to shoot E6, but simply cannot afford to because it costs upwards of $15 a roll to shoot and develop. That price happens to be close to the average salary in China. Can you honestly imagine spending an entire days salary on one 36 exposure roll of film?

I think having a lower cost option for slide film would bring more people into the fold as an entry point, and thus be more of a boon to Fuji and the film photography movement in the long run when those people who could only afford the cheap stuff, start to make more money, and become more serious, and thus want to experiment with the higher quality Fuji products.

Day's salary? Right now at B&H a 36x roll of Provia 400 is $6.49. Dwayne's charges $8.95 for processing. Add $4.50 shipping, though it's much less per roll if you have more than one roll processed. Total $19.94. A minimum wage burger flipper earns more than that in three hours, maybe 3.5 hours after withholdings, and most people aren't minimum wage burger flippers.

I will grant that the price of transparency film has skyrocketed, and very recently, so much so and so recently that I wasn't even aware of it until I checked just now as I bought my last batch late last year (about half of which is still in my freezer.) Provia 400 is $10.99 at B&H and a whopping $15.49 at Freestyle. The latter is outrageous when you can get it for almost 30% less from B&H. Still, it's an amazingly good film and it's worth even the $15 to me. (But not when I can get it for $10 just as easily!)

Trying to make film cheap is the wrong tactic. Make it as good as possible, make it the thing to shoot, make it popular, and people will pay for it. You're never going to compete with the marginal cost per shot of digital, which is basically free once the equipment is purchased. So don't try. If people want it they will pay what it costs (I am not talking, obviously, about $50 a roll and another $50 for processing or anything like that - within reason) and if more and more people want it there will be competition and economies of scale and the price will come down, at least some. That can happen, but obviously not to the degree of the old days.

 

[Diapositivo]

The idea of having somebody else develop your roll can be sensible for somebody producing a few rolls per year.
If film consumption begins to be sustained, self-developing is the only option.

Digital photographers don't normally have somebody else develop their raw files. They don't outsource all the photoshop work. If the digital crowd had the same mentality of considering having somebody else finish the work, digital would be much more expensive.

A film photographer when he begins passing the 30 - 50 rolls per year is, in my opinion, a self-developer self-printer almost by definition.

People thinks that learning to develop film is complicated.
I can attest that in my case learning the digital side of photography was WAY more complicated and expensive that learning the development side of film photography.

Everybody gives for granted that the digital photographer has to learn and work while the film photographer must rely on external professional services to exist.

A slide film costs around 4.5 Euro. 3.5 the film, 1.0 the developing.

 

[Roger Cole]

While I agree with that in principle, and haven't been doing my own E6 more for convenience than anything - I have a Jobo so it's as easy as buying the Tetanal kit, mixing, and pouring stuff in in the right order and pulling the lift handle on time - most people aren't going to do that, especially with color. Most people never did.

Consider my example - I have done it before (when I didn't have a Jobo too, using a big pan of water for a temperature bath) and am pretty experienced in the darkroom. But I have more money than time these days and the costs of sending it off to have Dwayne's do it isn't prohibitive to me, not for the amount of it I actually get to shoot, while I'd much rather spend my limited darkroom time doing things that have more creative control, like developing and, especially, printing my black and white. If an experienced darkroom hobbyist with a Jobo still thinks it's worth ten bucks to send it to Dwayne's rather than spend the two or three bucks plus the time and hassle of doing it myself, why on earth would a casual shooter bother to learn? A casual shooter won't. Someone with an artistic bent might but they already do and are a small market.

 

[kb3lms]

Of course, the biggest culprit company for this..

Walmart...

Do not underestimate Walmart's effect on the state (positive or negative) of the world's economies and the near destruction of the analog photography business. And photography in general.

 

[Roger Cole]

Ain't that the truth about Walmart.

 

[Photo Engineer]

Here are some thoughts based on the above posts:

1. Kodak has the most efficient production line in the world for making film. It is also the fastest.

2. Labor costs in the US are higher than China and Japan.

3. China has good products but still cannot match the quality of the Kodak or Fuji products. They are more like EFKE with a modern plant!

4. As noted earlier, the US is not training a good technical base for the next generation. We have plenty of bean counters though!

5. Digital is killing E6 faster than C41 due to color quality and duping issues with E6 films. Color neg is better. MoPic is supporting color neg and will for some time.

Etc. Basically, within a few generations, the US has the chance of becoming a 3rd world country with a huge uneducated class of poor.

PE

 

[Brian C. Miller]

Guys, PE is simply saying that there just isn't the market for the product, no matter who is producing it. Here's the thing: why would any company buy the Kodak still film division if it can't be made to generate a profit by itself? American, European, or Chinese, the product has to sell well enough to generate adequate ROI. Yes, IBM sold its PC business to Lenovo, and Lenovo is very happily producing them at a nice profit. But the film business isn't the notebook business.

Lucky Film is currently producing C-41 color and B&W film. The only thing they might want from Kodak is the brand label, not the emulsions. Do you think that they care if you get the same Kodak-formulated emulsion? I doubt it very much.

From what I've seen, film is now in the hands of its devotees, but that doesn't mean that there's enough of us to really make a monetary difference. Let's pretend for a moment that the membership between, say, LFF and APUG is unique, so 82,133 people. To buy $1,000,000,000 of film, each member would purchase $12,175 of film, $1,014 per month. Anybody feel up to that challenge? No?

It doesn't matter who buys the Kodak film division, because in the long run, without the support of the movie industry, it's going away, like it or not. The only way that film would survive in the movie industry is if people put their money on the IMAX theater showings, and nothing else. But that's the problem, isn't it? The consumers have power, real monetary power, but getting them to buy A instead of B just isn't easy. It's not getting them to part with the money, it's getting them off their butts in the first place. And getting them to buy from a first-world or NATO/EU country means that they have to have the product choice in the first place to do it. If the alternative simply doesn't exist, then it can't be purchased.

In order for Kodak film to survive, it would have to be reformulated for a small-run machine. But is that profitable? According to Simon, a master roll produces 85,000 rolls. Master rolls of support have a minimum purchase requirement of four rolls, so that's 340,000 rolls. Producing a master roll each day means 22,100,000 rolls of film.

Now, where's the market? If the above "unique" members all purchased an equal share of that, it would be 269 rolls, or 22 per month, and at $10/roll (factory direct to consumer) it would be a gross of $221,000,000. Far short of $1B, would it be adequate for a film business? The machine itself has to be designed and tested. And you have the overhead for the people and building, yadda yadda yadda, etc., etc. I'm guessing that $250M per year gross may not be enought to support a mini-Kodak.

 

[voceumana]

Here are some thoughts based on the above posts:

Etc. Basically, within a few generations, the US has the chance of becoming a 3rd world country with a huge uneducated class of poor.

PE

Rather an interesting thought--if USA becomes 3rd world, then our labor rates will go down, companies will move production here to take advantage, competition for employment will rise, and pay scale will increase.

Charlie Strack

 

[DREW WILEY]

Given the success of places like Wal Mart and the popularity of pure hot air on our various media,
including alleged news organizations and all the obnoxious political diatribes we've got to suffer thru for the next couple of months, I think it pretty safe to say the USA is already an uneducated third world country.

 

[railwayman3]

So what if Kodak's still-film business could be saved moving to Chinese production?

It wouldn't be the first time a company in the western world does the math and understands the longterm effect of globailzation.

By co-incidence a friend gave me an old 35mm film this morning to see if it was of use to me...Kodak Max Versatility 400 ASA, expired 11/2006, and printed "Supplied for Camera Packs only, not for individual sale".

Interestingly, the carton says "Film Made in China by Kodak (China) Company Limited, Product packaged by Kodak (Australasia) Pty. Ltd, Melbourne, Australia".

Conclusions to be drawn there?

 

[DREW WILEY]

Most of the time (note "most", not always), moving a product to China equals its extinction. What
comes out instead is something bait and switch of significantly inferior quality, merely cannibalizing
some American brand name. I don't blame the Chinese any more than I blame the mgt jerks who have betrayed American mfg and labor in order to pad their own bonuses and golden parachute contracts. But I do get tired of hearing the mantra that things will slowly improve in China. Yeah, it
did in Taiwan too, but it took half a century to get there. I won't be around that long. "Globalization"
is all too often a smoke-and-mirrors trick term for scorched-earth extinction of US industry. Right now a lot of so-called mfg corps don't own anything more than a label - the factories, skilled labor,
and tooling are all gone, and they're dependent upon a long unreliable supply chain. That's not good
long-term strategy. But lots of these jerks don't care. To them it's slash and burn economics - get
a huge crop for a year or two, then nothing of value every grows there again.

 

[BradS]

DREW WILEY, your last two posts are spot on...thanks for posting.

Wonder how long it will take for the masses of uneducated, under-employed Americans to wake up to the reality and take back what the Corporate Chiefls have stolen and given away.

 

[Photo Engineer]

Brian;

Kodak can coat master rolls faster than one per day. They can make enough for the whole world in one day!!

Charlie;

If the US becomes a 3rd world country, there will be a learning curve to climb back up just like any other country. Education first, along with food.

The list goes on.

PE

 

[BrianShaw]

That's not good long-term strategy. But lots of these jerks don't care. To them it's slash and burn economics - get
a huge crop for a year or two, then nothing of value every grows there again.

That is exactly right. The investment sharks are driving their Bentley, living in the mansion in the gated community, flying to meetings on their private jet, and partying on their yacht. Why should they care? :confused:

It's so short-sighted it's sickening.

 

[DREW WILEY]

Unfortunately, once the former middle class becomes an underclass, they become desperate, an easy herd to spook, panic, and stampede exactly the opposite direction from the pasture they need.
Congress is in deliberate gridlock, convicted stock market crooks pay fines less than a sales tax on
their illegal earnings, etc ... So what do I plan to do? Put more real film in my freezer and get back
out on the trail ASAP where at least the world of coyotes, squirrels, marmots, and pikas is still sane!

 

[BradS]

Kodak can coat master rolls faster than one per day. They can make enough for the whole world in one day!!

PE

Isn't this the heart of their "problem"?

 

[Ian Grant]

Isn't this the heart of their "problem"?

We tend to forget that Kodak has already scaled down very drastically.

Kodachrome was coated in the UK as well as the US as were other films. Before WWII Tri-X and Super-X were coated in the US, Canada, Great Britain and Hungary.

Ian