Kodak Axes Digicams, but keeps film

[dehk]

Erm, Long Live Tri X?

 

[Scott_Sheppard]

No where in any document supplied by Kodak do they say they are making money on film.

Red this...

http://www.kodak.com/ek/US/en/Kodak...s_On_More_Profitable_Growth_Opportunities.htm

The posting in the BJF and the completely copied (word for word) story from the BJF posted on Forbes is one of the most non journalistic POS PR spins I have read in many many months.

Some one show me a document that is not BS PR spin ??

It looks like true reporting is gone along side with Kodachrome !!

Your thoughts ??

 

[Mackinaw]

No where in any document supplied by Kodak do they say they are making money on film..........

On the other hand, they are in Chapter 11 and are in the process of restructuring the company. If they were going to end film production, wouldn't they do it now?

Jim B.

 

[CGW]

No where in any document supplied by Kodak do they say they are making money on film.

Red this...

http://www.kodak.com/ek/US/en/Kodak...s_On_More_Profitable_Growth_Opportunities.htm

The posting in the BJF and the completely copied (word for word) story from the BJF posted on Forbes is one of the most non journalistic POS PR spins I have read in many many months.

Some one show me a document that is not BS PR spin ??

It looks like true reporting is gone along side with Kodachrome !!

Your thoughts ??

Kodak’s continuing consumer products and services will include:

The traditional film capture and photographic paper business, which continues to provide high-quality and innovative products and solutions to consumers, photographers, retailers, photofinishers and professional labs.

Colbert's notion of "truthiness" is shot through most discussions on film profitability at Kodak here on APUG. Better yet, Ken Kesey's "But it's the truth even if it didn't happen," seems equally appropriate.

 

[Scott_Sheppard]

Don't get me wrong, I want Kodak to make analong products for the next 200 years, but can someone please do at least a half ass job on reporting instead of just spoon feeding everybody a line of PR BS ??

 

[CGW]

Don't get me wrong, I want Kodak to make analong products for the next 200 years, but can someone please do at least a half ass job on reporting instead of just spoon feeding everybody a line of PR BS ??

Same here but there's also denial that demand crashed as well as evasive reporting.

 

[PKM-25]

As far as I know, "investigative Journalists" can't just waltz right into Kodak Park without a pass. So that leaves what we get from them in terms of press releases for news and updates. The main thrust of this one is that they are nixing digicams and keeping film going, at least for the moment...

For example: Kodak announces it is filing C-11.....do you have any reason to doubt that?

Sure, some forms of this release have some liberties taken depending on source, but we all get the main idea...

Don't get me wrong, I want Kodak to make analong products for the next 200 years, but can someone please do at least a half ass job on reporting instead of just spoon feeding everybody a line of PR BS ??

 

[keithwms]

Not talking about film cameras. Had a chance to play with a Sony NEX-7 with its killer EVF. It won't be long before OLED viewfinders rule. No prophetic statements necessary.

Yeah, I wasn't talking about film cameras either!

 

[Photo Engineer]

Kodak just announced about 400 more layoffs in addition to the ones related to the inkjet business reported earlier.

Xerox also reported layoffs are coming.

PE

 

[Aristophanes]

As far as I know, "investigative Journalists" can't just waltz right into Kodak Park without a pass. So that leaves what we get from them in terms of press releases for news and updates. The main thrust of this one is that they are nixing digicams and keeping film going, at least for the moment...

For example: Kodak announces it is filing C-11.....do you have any reason to doubt that?

Sure, some forms of this release have some liberties taken depending on source, but we all get the main idea...

Ignore the press releases. They are spin, by definition.

Read the financials. Film is sunk cost so incurs no more debt. And it may be likely that operating costs are less than sales.

But revenues are still in free fall. That means that Kodak is producing and selling less and less film every minute measures YOY.

No one is making new cameras in any volume. No labs—the total backbone of industrial film production—are opening.

Within 24 months the cinema industry will have switched from about 70/30 film/digital to 99/1 digital film (yes...the transition is happening that fast).

That means less customers. We can se it happening right before us when people file threads here about not being able to get I and y, about rising prices, about discontinued z, and about no labs left in their regions (1 left, US$25/roll, no E6).

If you take Kodak's bottom line and add in the penalties not yet erased by pensions and medical costs, plus debt servicing, then all of Kodak's divisions lose money, including film. That is the spin. If you actually apportion those costs to historic capital allocations, then film loses far, far more than the other divisions, especially on the pension side. The $30 million severance hit for dropping digicams is nothing compared to the $700 million fro paying their pension obligations left over from the film era.

It is typical of companies in Ch. 11 to continue to promote profits in a division up for sale. If you read the mission statement of Kodak, there is no room for film now. That's in the financials. And the last reorganization made it clear the film and entertainment group is being prepped for sale.

It's all about the gross revenues in a shareholder/creditor driven company. Everything else anyone says is fluff. Public companies cannot have revenue-losing divisions dependent on third party cameras being manufactured to put your product in....of which there are effectively none.

The best hope for Kodak film is for a private equity investment group who have a game plan to change that dynamic buys the film and entertainment groups and focusses the product in the niche it deserves.

 

[Roger Cole]

"Eastman Kodak plans to focus on its other businesses which include photo sharing, digital kiosks, and traditional film, a still-profitable branch of the company’s business."

"The one silver lining* is that Kodak will continue producing color and black-and-white film, news that should make traditional photographers happy."

Ken

* No mention if the pun was intended...

Pretty sure the pun wasn't intended. Most people have either no idea or only the very vaguest notion that silver is in traditional film, and zero concept of it being integral to the image. Plus it's a common saying. But it's a nice unintended reference anyway.

 

[Photo Engineer]

If film were not somehow profitable, then Fuji would be running a loss, Ilford would be running a loss and several companies in Europe with plans to expand their film and paper coating facilities would be in trouble. As this is NOT the case, we can safely assume there is some degree of profit to be made.

Yes, Kodak has to do better! Yes, profit margins are thin. But, even if Motion Picture collapses there is still a market. Kodak has the most modern and best facility for this purpose in the world and a huge body of trained people to call on here! So, it can be done. But to have someone say that they will fail or that there is no profit is premature.

I think that the other companies I mentioned would dispute that foregone conclusion of failure on Kodak's part.

PE

 

[Roger Cole]

There was quite a disagreement a few days ago with one person arguing strongly that film was NOT profitable, and here we have the proof that he was wrong wrong wrong. Kodak will apparently stay in the film business fir a kibg tune,

In fact, I think that the film division represents a major portion of the Kodak land ownership and personnel. However, to answer another question, I doubt if they would ever bring back B&W paper, as the entire plant has been demolished. It is like being in a time machine running backwards and looking at Kodak Park implode.

PE

I'm glad someone could decipher what "fir a kibg tune" was supposed to mean. I'm guessing "for a long time?" I noticed my iPhone often wants to write "fir" when I meant to type "for" and doesn't recognize it as a typo since it's a real word. "kib" are each one letter removed from "lon" and "tune" would be an autocorrect for a mistyped "time." Hum, guess I did decipher it.

A shame there likely won't be more Ektalure, but that was gone before other paper and maybe the inability to use cadmium now limited it anyway. Elite was nice but we have plenty of excellent graded papers, and even more excellent VC papers. About the only Kodak B&W paper I personally miss and don't have a substitute for is Panalure (the last version, which was actually quite good) and that's because I shoot a fair amount of color negatives, often find ones I'd like to print in black and white, and no one else makes a panchromatic paper for doing so.

Simon, are you listening? Any chance Ilford could make a panchromatic B&W paper for that? Foma folks??

Maybe, if they want to keep making money on traditional materials, it might not be too much to hope for RA4 paper cut into sheets? Surely they still have, or could get or lease, cutting and packing equipment, and they do still make the paper.

 

[Roger Cole]

Kodak’s continuing consumer products and services will include:

The traditional film capture and photographic paper business, which continues to provide high-quality and innovative products and solutions to consumers, photographers, retailers, photofinishers and professional labs.

Colbert's notion of "truthiness" is shot through most discussions on film profitability at Kodak here on APUG. Better yet, Ken Kesey's "But it's the truth even if it didn't happen," seems equally appropriate.

Good grief man, give it a rest. I'm sorry your mother didn't give you any toys to play with but that's no reason to keep telling everyone else that all their toys are being taken away.

I hear and recognize the logic in much of what you are saying but the combination of the excess mood of gloom in which it's delivered and the repetitive drum beat just turn it into a tired wail that starts to read like Charlie Brown's teacher sounds - here come CGW and Aristophanes again to try to rain on the parade, "wahwahwah, wahwahwah, wahwahwahwaaaa.."

 

[Photo Engineer]

That is what happens when you touch type and your fingers go astray!

Sorry. I'll be sorry for a kibg tune.

PE

 

[CGW]

Good grief man, give it a rest. I'm sorry your mother didn't give you any toys to play with but that's no reason to keep telling everyone else that all their toys are being taken away.

I hear and recognize the logic in much of what you are saying but the combination of the excess mood of gloom in which it's delivered and the repetitive drum beat just turn it into a tired wail that starts to read like Charlie Brown's teacher sounds - here come CGW and Aristophanes again to try to rain on the parade, "wahwahwah, wahwahwah, wahwahwahwaaaa.."

Sorry the news isn't cheerful but changing the parade route and burying your head in the sand aren't exactly solutions. But if you're OK with "truthiness," then it's "problem solved."

 

[keithwms]

I definitely agree that Kodak could manufacture film for a profit for a kibg tune. They'd have to figure out how to shed their various other liabilities though. That's what chapter 11 is for.

 

[DWThomas]

Interestingly, I received an email from Freestyle yesterday that discussed film and included:

Kodak's sales in their film division increased 20% last year, and this division continues to be a profitable segment. They have billions of dollars in assets. Citicorp Group just gave them $950 million to help fund their restructuring efforts which will continue for 18 months.

Sounds like Kodak will be around for a while longer and that Citicorp is pretty sure they are going to get their money back with interest. The film division seems to be doing quite well and may even prosper under new management as a separate entity. Regardless of what happens, Freestyle is prepared to make a sizable investment in product to keep important products available for years to come.

FWIW

I'm already unhappy about Plus-X fading, but maybe Tri-X will keep on keepin' on!

DaveT

 

[Roger Cole]

Interestingly, I received an email from Freestyle yesterday that discussed film and included:



FWIW

I'm already unhappy about Plus-X fading, but maybe Tri-X will keep on keepin' on!

DaveT

Sizable buy for years to come? Freestyle for the win - I liked supporting them already in spite of spendy shipping costs from the west coast and paper prices higher than NY (but with different selection and the only source for Adox paper.) But this is a good sign from them.

I like and miss Plus-X but like FP4+ just fine. I picked up some Arista "Premium" rebranded 35mm Plus-X. They still have it, albeit in 24 exposure loads only (which I often prefer anyway) for $1.89. Wish I could get some in 120 without spending crazy eBay prices, but FP4+ does nicely for me.

Tri-X is a different matter and I'd miss it greatly. HP5+ is a fine but very different film. I'd miss Tri-X a lot.

 

[ParkerSmithPhoto]

You can make a profit on any product as long as your expenses are lower than your revenues. Elementary, right?

For film to survive, all of the excess expenses have to be removed from the equation. Paying people who no longer work for Kodak isn't going to be possible if Kodak film is to survive. The pension is a thing of the past, unless, of course, you work for the government.

 

[Aristophanes]

I definitely agree that Kodak could manufacture film for a profit for a kibg tune. They'd have to figure out how to shed their various other liabilities though. That's what chapter 11 is for.

That's half the problem.

The other half is plunging demand and the decline of processing labs and no one making the devices to put your product into.

That is the problem. It's really the only problem regardless of Ch.11.

Does anyone honestly think the new Kodak with creditors turned into shareholders is going to back film given the drop in demand and no one making cameras?

 

[Aristophanes]

You can make a profit on any product as long as your expenses are lower than your revenues. Elementary, right?

For film to survive, all of the excess expenses have to be removed from the equation. Paying people who no longer work for Kodak isn't going to be possible if Kodak film is to survive. The pension is a thing of the past, unless, of course, you work for the government.

1. Not if you are public. You have to maintain revenues for the share value to match the equity in the company. Look at RIM right now.
2. You still have to solve the demand curve declining.
3. Someone has to make cameras in volume proportionate to the capacity to make film, less eBay salvage and legacy cameras, the later 2 subject to entropy.
4. Labs have to be around to process in volume.

The problem is not just with Kodak and its overhead. Or Fuji. It's with the whole market infrastructure.

I am not saying film will die, but that for film to survive it needs to get away from the toxic public corporate entity that is Kodak and into private hands. Fuji will have a comeuppance in the future as well, but their decisions will be internal as their imaging revenue stream apart from film is very, very strong.

 

[keithwms]

I look forward to seeing you proven wrong, Aristophanes! Nobody is saying the "new" Kodak will look anything like the old, or even that these products will still be made by Kodak. Absent those two assumptions, which you continue to make over and and over ....ad nauseum as if nobody's heard them.... absent those two assumptions, what you are saying is meaningless.

 

[Roger Cole]

Film demand has dropped precipitously. No one is disputing that. But the bigger question is whether it (discounting motion picture which we know will continue to fall off a cliff) has declined as far as it's going to. Is the current level sustainable or possibly due for growth?

I don't really know and I submit that no one else can be sure either!

The argument that no one is making new film cameras looks more reasonable than it is. With the way demand has dropped and the life span of older quality gear being dumped on the market, there isn't much demand for new cameras right now. As older cameras wear out, are broken and become unservicable, it remains to be seen if an interest in film photography will remain large enough to bring new cameras to market. Notice that new large format cameras ARE being made, but of course this has always been a small market and the ones being made are simple enough to be a bit of a cottage industry.

Mechanical cameras aren't that difficult to make. Heck, with the advances in 3D printing technology in ten years you may be able to use a $500 (currently the cheapest are about $2000) 3D printer to make all the parts you need, save for maybe a lens, for a serviceable plastic camera right at home from your computer. If you break a part just print another one.

I agree that film won't survive solely on Kodak's shoulders. The loss of commercial photo finishing is much lamented, but I have no problems sending my film out, even though there are labs in Atlanta. Heck, it's easier for me to mail it to Dwayne's than drive into Atlanta from the suburbs to drop it off then to pick it up. And black and white has been "dead" to commercial photofinishing for a couple of decades but still survives for hobbyists and artists who do their own developing and printing or send it to custom labs - very rarely to large volume non-custom ones.

 

[Aristophanes]

Film demand has dropped precipitously. No one is disputing that. But the bigger question is whether it (discounting motion picture which we know will continue to fall off a cliff) has declined as far as it's going to. Is the current level sustainable or possibly due for growth?

I don't really know and I submit that no one else can be sure either!

The argument that no one is making new film cameras looks more reasonable than it is. With the way demand has dropped and the life span of older quality gear being dumped on the market, there isn't much demand for new cameras right now. As older cameras wear out, are broken and become unservicable, it remains to be seen if an interest in film photography will remain large enough to bring new cameras to market. Notice that new large format cameras ARE being made, but of course this has always been a small market and the ones being made are simple enough to be a bit of a cottage industry.

Mechanical cameras aren't that difficult to make. Heck, with the advances in 3D printing technology in ten years you may be able to use a $500 (currently the cheapest are about $2000) 3D printer to make all the parts you need, save for maybe a lens, for a serviceable plastic camera right at home from your computer. If you break a part just print another one.

I agree that film won't survive solely on Kodak's shoulders. The loss of commercial photo finishing is much lamented, but I have no problems sending my film out, even though there are labs in Atlanta. Heck, it's easier for me to mail it to Dwayne's than drive into Atlanta from the suburbs to drop it off then to pick it up. And black and white has been "dead" to commercial photofinishing for a couple of decades but still survives for hobbyists and artists who do their own developing and printing or send it to custom labs - very rarely to large volume non-custom ones.

No growth unless new cameras in volume are also manufactured. The key point is no one currently makes film cameras save the Lomo crowd, and they make far too few. All motion picture camera manufacturing has ended save for custom orders from diminishing machine stock.

Film and developing costs continue to rise because local supply drops with labs closing. The more they rise, the fewer people can afford to shoot. The paradox of thrift kicks in and demand drops even more. Ilford started their own lab processing for B&W likely because they foresaw this dynamic. The cannot sell enough produce to home developer/darkroom folks to keep the industrial capacity going on a perishable product. So they need a central processing system to increase the aggregate. The film supplier now has to take on the role of the labs because the industry is consolidating so much. This is good, but it is Kodak circa 3 years after EK first began.

Cottage industries cannot sustain Fuji/Kodak/Ilford mass industrial production facilities. Most emulsions can't be made in a barn unless stoopid rich millionaires buy a big chemistry set.

B&W (and E6) survive now because colour negative and especially motion picture film underwrites the rest through cost-shifting. Once those costs are no longer amortized over multiple products the core products will have to bear the brunt of the price increases. $25 for Tri-X 135/36? There won't be cheaper alternatives because the cheap guys will no longer be able to afford the raw materials. Bye-bye Foma, Efke, etc. No one will extend credit to pay the electric bill for a factory that has fewer and fewer customers every day (see paradox of thrift above; the first guy to be thrifty is the guy loaning you money).

The smaller companies will starve for credit and capital before demand from customers runs out. They will have to pay to distribute; that's when it usually ends.

How is this solved? Private capital rationalizes and vertically integrates key film industry components under one roof, from film production, to camera manufacture, to lab processing via affordable mail order. They also supply the home hobby market, but prices are substantially higher (no more cost-shifting).

Kodak is staying public because of its preferred shareholders recently creditors post Ch.11. These parties cannot buy a declining gross revenue stream and still add share value. That itself is contradictory in public companies. So Kodak is part of the problem, not the solution. And film is Kodak's problem now.

It may be that Kodak cannot sell the film division and they have to shutter it at preferred shareholder demand. 13 months from now it will get pretty test if we continue to see Kodak film sales plunge. And if they are plunging for Kodak, they are doing so for Fuji. At least Fuji still has small runs of film cameras (I think the Natura is still produced along with the MF 6x7). It would not surprise me to see Fuji dramatically ramp up their prices to high-end boutique values for all film. They've done this before and it is a common pricing strategy for Yen-dependent companies.

The stupid part, as PE describes, is Kodak has the best emulsion system in the world. This is precisely the system that should be saved for niche product efficiency, but sadly, it is most at risk.

No, I do not have a crystal ball. But I was just part of a review on a Ch.11 component worth $100's of millions (pulp and paper). I do these analyses for a living. This is not the only industry undergoing painful, deeply unsettling changes.

You can engage in the silly "film is dead" — "no it's not, I saw a guy..." hyperbole. All I do is follow the money and speak as I see it. What I do see is Kodakspeak buttering up film. This tells me they are trying to sell the unit because that's what the balance sheet says should happen. They won't cry about lost customers or reveal steep revenue declines. No one advertises damaged goods.