Kodak Axes Digicams, but keeps film

Rudeofus said:

Kodak's FPEG net sales numbers include photographic still film, movie film and movie print film. If photographic still film sales grow by 20% total, steeply declining movie print film sales may still cause an overall decline in FPEG sales volumes. Both the numbers Aristophanes keeps posting over and over again and the numbers published by still film distributors may be correct and consistent.

BTW, if one takes the number Aristophanes posted for 2011 and adjusts it for 4 quarters you get about 1.500 million. Which would indicate to me that the decline has slowed down significantly, even if you compare it to an exponential decline where smaller values decline less. Even with Aristophanes' numbers one could argue that film sales numbers will level off soon and end the ten or twelve years of decline.

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They are not my numbers.

They are the Q3 Kodak financials from their website. Kodak has an excellent investors website (actually and surprisingly, the best I've ever seen...and I see a lot of them).

For 3 years the decline has been about 14% YOY. Last year was 11%. It's slowing marginally, most likely as the economy improves in the US.

I suspect FPEG could be worth about $150 million in eventual net sales, but will sell for much less.

Yes, the motion picture industry makes up the bulk of emulsion volume; it mostly turns on their consumption.

Well I much prefer Le Pain Quotidien, but Starbucks is more ubiquitous. Actually, LPQ does not have very good interior decor and the walls would be perfect for nice big prints....

Aristophanes said:

The whole point of CH. 11 is to offload assets in decline.

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Yessss! Exactly!!! So let us please not apply numbers for an effed up, conglomerated, steaming pile of sh*t to the small silver nugget that is individually packaged photographic film. Chp. 11 should separate the wheat from the chaff very quickly.

jnanian said:

café overhead is a KILLER

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Yeah I don't see how cafes survive at all, they have to be hawking something on the side.

I have the solution. LPQ could very easily become a fairly high-end restaurant at meal time. That'd bring in big bucks. When your avg per person expenditure goes from $5 to $30 at peak meal times, that has a way of taking care of overhead. They could do $30+ at dinner, no problem. Great food. Much better price point than Panera.

keithwms said:

Bill, there is an ignore member function...

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Thank you for this helpful information.

Aristophanes said:

It's hopeless within a public company like Kodak coming out of CH. 11 with creditors turned into preferred shareholders. Those shareholders cannot have their equity planted into a "declining" product line.

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You say you work in restructuring and analysis of companies which have fallen from grace. I assume a major part of your job is telling people who don't see what's wrong with their bankrupt company that something has to change. You probably encounter lots of resistance as the jobs of many folks depend on these companies not changing their ways. You see executives desperately sticking to a business model which the market won't bear. The success of your operation may depend on your willingness to tell these people over and over again that they are in trouble and need to change, and you may have to resort to the bleakest possible pictures to make these people understand and accept the facts.

APUG is none like this: we are not decision makers at Kodak, most here don't work for Kodak and never did, the income and financial well being of most here is not dependent on Kodak's product line. There is no point in drawing an overly bleak picture for us because we don't stand in the way of Kodak's possible recovery, quite to the contrary, our loyalty to Kodak film may help them regain profitability one day. We don't need some shock and awe therapy for some higher goal. Hearing a balanced view won't cause economic damage to Kodak or anyone involved. Analog Rapture hasn't happened almost a month after Kodak's filing for ch 11 and it won't happen even if you keep writing about it.

Aristophanes said:

The whole point of CH. 11 is to offload assets in decline.

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Kodak did: they killed their digicam business. Eat this!

Aristophanes said:

Starbucks...where even store has the exact same paint job.

Nice.

That's where I'll shop for art.

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Three cheers for mass individualism!

David A. Goldfarb said:

And in Forbes:

http://www.forbes.com/sites/erikkain/2012/02/09/kodak-ceases-digital-camera-production/

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I just spoke with Kodak Professional earlier this week. The word is exactly what is written in the Forbes article.

I was assured I could count on full availability of traditional films and chemistry and see new developments come into the market. It was very good news to hear and they can count on my small piece of business. I did emphasize to them that distribution needs to be improved as many small shops will not inventory the larger order quantities and that makes access to product difficult and more costly to the end user.

I would make the suggestion that others contact Professional Services and voice your concerns regarding any product or availability issues you may have. They are interested.

Hopefully Eastman Kodak will be around for a long time. I also feel badly about the human toll in the difficulties they have run into over the years. Buy Kodak products, get these jobs back, help get a great American company back on it's feet and regain it's former glory. Everyone will all reap the benefits.

jnanian said:

too funny ..

i have been planning to open a cafe like this for 20 years ...
part owned a gallery to learn the trade, helped manage a café to learn the trade
never had deep enough pockets though ... café overhead is a KILLER

you forgot to mention the café sells caffenol on the side ( and will stand process your film as you drink your coffee )

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Ah, Caffenol! I was looking for a group of coffees, grades 1,2,3 & 4,

One of my long time commercial clients are a couple who went from having one good restaurant 10 years ago to 5 great ones now. We are talking about trying it out for a Summer season or even beyond if it goes well.

You always fail if you don't try, yep, yep...

PKM-25 said:

One of my long time commercial clients are a couple who went from having one good restaurant 10 years ago to 5 great ones now. We are talking about trying it out for a Summer season or even beyond if it goes well.

You always fail if you don't try, yep, yep...

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sounds like a plan !! good luck with that -


it is quite unfortunate, but no commercial spaces around here lease for less than 1 year
so ... 5Kx12 + 35K for a summer is a bit hard for me to come up with
soon though ... soon

Ah, Caffenol! I was looking for a group of coffees, grades 1,2,3 & 4,

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i'll be happy to help you with a fine robusta varietal that will make your film and paper sing ...

Rudeofus said:

You say you work in restructuring and analysis of companies which have fallen from grace. I assume a major part of your job is telling people who don't see what's wrong with their bankrupt company that something has to change. You probably encounter lots of resistance as the jobs of many folks depend on these companies not changing their ways. You see executives desperately sticking to a business model which the market won't bear. The success of your operation may depend on your willingness to tell these people over and over again that they are in trouble and need to change, and you may have to resort to the bleakest possible pictures to make these people understand and accept the facts.

APUG is none like this: we are not decision makers at Kodak, most here don't work for Kodak and never did, the income and financial well being of most here is not dependent on Kodak's product line. There is no point in drawing an overly bleak picture for us because we don't stand in the way of Kodak's possible recovery, quite to the contrary, our loyalty to Kodak film may help them regain profitability one day. We don't need some shock and awe therapy for some higher goal. Hearing a balanced view won't cause economic damage to Kodak or anyone involved. Analog Rapture hasn't happened almost a month after Kodak's filing for ch 11 and it won't happen even if you keep writing about it.

Kodak did: they killed their digicam business. Eat this!

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Kodak is becoming Creo.

There. Someone had to say it.

My job is actually telling governments what does and does not work economically from a risk management perspective. Equity and insurance. I met with an actuary today.

All I am doing on APUG is trying to cut through the silliness where people say things like "20% increase in film sales" when the actual Kodak financial data says not.

All I have ever said is that film—a declining product line (Kodak's words)—cannot survive inside a public company where revenue growth is in freefall due to a shrinking customer base. It's not me saying this. It is Kodak, the "decline" part. Not in their "I heard from..." PR Dept., but in their raw financials. My comparative experience is that Kodak will butter up the film division because they need to sell it off or spin it out. Of course they'll tell Freestyle all is swell. He's the potentially biggest customer for a new FPEG owner! It's all honey and rosewater when he's on the phone.

Kodak is not going private. It has to stay public. The new shareholders will be the current creditors. They will not buy a net revenue loss on their equity which is what the FPEG unit represents. Something has to give. If film cannot stay, who will buy it? I think (and here is my conjecture) that Kodak's film group,all of FPEG, will have a better chance of survival outside Kodak and in private equity hands. I doubt a film-only Kodak spin-off can be public. No one would fund the IPO.

I look to a Hollywood tie-in for a potential match. Of course that leave Kodak film divorced from EK. That's some sad business history.

Yeah yeah we heard you the first 50 times buddy.

Go shoot some film while we keep our heads in the sand.

Here I am in Rochester surrounded by EK employees and retirees. For every one I talk to there are 2 or 3 "rumors" as to what will happen and what is going on right now. Everyone "knows".

The news on TV reports one thing on CH10 and another on 9 and another on 8. Every night.

The WSG, NYT and other paper media report other stories such as those about Perez. (Look some of those up)

Anyhow, no one knows. And, you would rather keep these threads alive with speculation rather than go out and shoot some pix. I spent the day advancing analog. I think that this is my second or 3rd post today. Good luck guys with your divining rods! What will be will be. At present, on one knows.

There are things going on behind the scenes that you have no inkling of! None whatsoever. (I don't really, but can guesstimate by the range of rumors).

PE

Aristophanes said:

Kodak is not going private. It has to stay public. The new shareholders will be the current creditors. They will not buy a net revenue loss on their equity which is what the FPEG unit represents. Something has to give. If film cannot stay, who will buy it? I think (and here is my conjecture) that Kodak's film group,all of FPEG, will have a better chance of survival outside Kodak and in private equity hands. I doubt a film-only Kodak spin-off can be public. No one would fund the IPO.

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Wait a minute! Guys, isn't this the exact outcome that so many around here have been hoping and praying might someday have a chance of happening? Perhaps not in terms of additional EK job or benefit losses, of course. Lord knows no one wants to see that. But perhaps a bit more selfishly in terms of at least a chance that the Kodak film operations may yet be spun off and survive in some form or another? The mere possibility (and that's all it really is at the moment) that Kodak film survives in any form at all sure beats the certainty that it will die if it remains in-house at Kodak. Doesn't it?

Perez has been saying for how long now - over five years? - that film was not in Kodak's future. During that time he (and the BODs) created the current environment in which, regardless of what happens to him now, film absolutely cannot survive as part of Kodak's public future. Regarding film he did exactly what he said he was going to do all along. No surprises. All we had to do was listen to him.

You may not like hearing it 50 times in row. But then again, it shouldn't have taken more than once or twice...

Aristophanes said:

I look to a Hollywood tie-in for a potential match. Of course that leave Kodak film divorced from EK. That's some sad business history.

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Given Eastman Kodak's contributions to this country's history the last century or so, this is by far the saddest outcome of all.

Ken

Aristophanes said:

Kodak is becoming Creo.

There. Someone had to say it.

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WTH is "Creo?"

EDIT: Looked it up, still can't really tell what it is. Some kind of imaging server system or consortium or something involving Kodak and a lot of printer makers. Ok, whatever.

Roger Cole said:

WTH is "Creo?"

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Creo

Ken

Ken Nadvornick said:

Creo

Ken

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Thanks. That makes a little more sense than the Creo web site.

Aristophanes said:

My job is actually telling governments what does and does not work economically from a risk management perspective. Equity and insurance. I met with an actuary today.

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Governments are in the same position as the companies you are supposed to help, so my original point stands. It's your job to draw an overly bleak picture of a situation so you get them to focus their attention onto a manifest problem and so they are willing to act. Most APUGers on the other side have been exposed to the "film is dying" meme for a decade by now - and film is still alive and kicking today. To many here you don't look like an outside expert with eagle view pointing them in the right direction but rather like on of these folks wearing "the world ends soon" signs at large public gatherings.

Aristophanes said:

All I am doing on APUG is trying to cut through the silliness where people say things like "20% increase in film sales" when the actual Kodak financial data says not.

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I've already pointed out the difference between photographic still film sales and overall film sales. These people claiming "20% increase in film sales" don't sell movie print film and their reports are neither silly nor misleading. Their reported increase in still film sales shows that people start to use this medium for its merits, not because they are too poor to buy a digicam or too dumb to operate one. Remember that Kodak's and Fuji's last film releases were professional film, not el cheapo consumer film.

Aristophanes said:

All I have ever said is that film—a declining product line (Kodak's words)—cannot survive inside a public company where revenue growth is in freefall due to a shrinking customer base. It's not me saying this. It is Kodak, the "decline" part. Not in their "I heard from..." PR Dept., but in their raw financials. My comparative experience is that Kodak will butter up the film division because they need to sell it off or spin it out. Of course they'll tell Freestyle all is swell. He's the potentially biggest customer for a new FPEG owner! It's all honey and rosewater when he's on the phone.

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The decline is there because of movie print film. It's leveling off because the transition to digital movie projection is almost done (as you stated), while big blockbuster movies are still shot on film and analog still photography even seems to recover somewhat. This means a potential market in the range of 1B and it is stable and profitable for many players in that market.

CGW said:

It's looking like a contrarian proposition to many who I try to sell here in Toronto, where the oldest and largest pro lab in the city just closed after 57 years in business. It just wasn't viable. That leaves one good full-service(quality E6/C-41/B&W processing) pro lab in an urban area of just over 6 million. That's not naysaying, just the truth.

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Well, no one has said that that is not sad, or that it is not the truth.
But it is also not the whole picture, because the Lomographic Society International (LSI, which is now already a bigger company than Ilford, Foma, Fotokemika, InovisCoat, Filmotec, Adox, Maco together) has recently opened a big Lomography Gallery Store (LGS) in Toronto.

http://microsites.lomography.com/stores/gallery-stores/toronto

The LSI does intensive market research of the local markets before they invest huge sums to open a new store. Their conclusion was there is a big enough market for all their film related products in Toronto, and that it makes sense to invest there in a LGS.
So, the situation for film shooters in Toronto may be worse compared to other cities, but it is obviously not all "doom and gloom".

I live currently in a city with 'only' 500,000 inhabitants. Very small compared to Toronto. But here 3 professional labs are working, two of them offering E6 as well.
For Germany that is not unusual at all, most cities of that size have more than one professional lab, even lots of 100,000 or 200,000 inhabitant cities have at least one professional lab.
The number of professional labs has been stable here for the last three years.
But even in the cities and small towns which don't have a local lab getting your films developed and prints done is very easy. Every local store of the drugstore chains offers that service, and at extremely low prices. Even in the smallest town you have access to film development (C-41, E6, BW, 135 and 120) by these drugstore chains. They also offer film (consumer housebrand CN films ISO 200 and 400, Kodak Farbwelt 200 and 400, Kodak BW 400CN, partly AgfaPhoto APX 100, Elitechrome 100 or AgfaPhoto CT Precisa slide film).
Developing by mail order is also very convenient here. Lots of professional labs offer it. Turnaound time only two days.

CGW said:

Magical thinking won't stem falling demand, much less reverse it.

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No one here is doing magical thinking. I've worked in the photo industry, was involved in technological and economical research. I know the challenges and the numbers.
But therefore I know as well that there is a realistic chance for film stying alive. The market potential is existent. But the markets "don't fall from the sky", they have to be developed. Marketing for film as a photographic medium is the key factor.

Will it be easy? No, certainly not. Lots of efforts needed. We all have to do our part: Manufacturers, distributors, labs, photographers.
Will it be possible? Yes. If we stop crying and complaining and take action.
Let's be part of the solution. Everyone of us can do his part to keep film alive.

Best regards,
Henning

Henning Serger said:

Well, no one has said that that is not sad, or that it is not the truth.
But it is also not the whole picture, because the Lomographic Society International (LSI, which is now already a bigger company than Ilford, Foma, Fotokemika, InovisCoat, Filmotec, Adox, Maco together) has recently opened a big Lomography Gallery Store (LGS) in Toronto.

http://microsites.lomography.com/stores/gallery-stores/toronto

The LSI does intensive market research of the local markets before they invest huge sums to open a new store. Their conclusion was there is a big enough market for all their film related products in Toronto, and that it makes sense to invest there in a LGS.
So, the situation for film shooters in Toronto may be worse compared to other cities, but it is obviously not all "doom and gloom".

I live currently in a city with 'only' 500,000 inhabitants. Very small compared to Toronto. But here 3 professional labs are working, two of them offering E6 as well.
For Germany that is not unusual at all, most cities of that size have more than one professional lab, even lots of 100,000 or 200,000 inhabitant cities have at least one professional lab.
The number of professional labs has been stable here for the last three years.
But even in the cities and small towns which don't have a local lab getting your films developed and prints done is very easy. Every local store of the drugstore chains offers that service, and at extremely low prices. Even in the smallest town you have access to film development (C-41, E6, BW, 135 and 120) by these drugstore chains. They also offer film (consumer housebrand CN films ISO 200 and 400, Kodak Farbwelt 200 and 400, Kodak BW 400CN, partly AgfaPhoto APX 100, Elitechrome 100 or AgfaPhoto CT Precisa slide film).
Developing by mail order is also very convenient here. Lots of professional labs offer it. Turnaound time only two days.



No one here is doing magical thinking. I've worked in the photo industry, was involved in technological and economical research. I know the challenges and the numbers.
But therefore I know as well that there is a realistic chance for film stying alive. The market potential is existent. But the markets "don't fall from the sky", they have to be developed. Marketing for film as a photographic medium is the key factor.

Will it be easy? No, certainly not. Lots of efforts needed. We all have to do our part: Manufacturers, distributors, labs, photographers.
Will it be possible? Yes. If we stop crying and complaining and take action.
Let's be part of the solution. Everyone of us can do his part to keep film alive.

Best regards,
Henning

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Lomography amounts to a drop in the bucket in the huge N. American market. We've been here before and toy cameras are inconsequential as a source of new demand--sorry. And please, that store on hipster row along Queen St. W is a hole in the wall boutique that's decidedly not busy. With respect, you're talking through your hat about the city I live in. Labs close due to low/no traffic. Today's photo industry in N. America probably isn't the one you knew.

Aristophanes said:

Read the financials.

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Better: Understand the financials. Kodak's film division has been profitable during the last years (with the exception of one quarter).
Learn to understand a balance sheet, please.....
That is the reason why Kodak has kept the film division: They needed these profits to partly compensate the losses in the digital areas.
If the film division would have not been profitable, Kodak would have axed it some time ago.

Aristophanes said:

No one is making new cameras in any volume.

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Sorry, that's wrong. Let's have a look at the facts:

1. In 2010 the Lomographic Society International (LSI) alone sold more than 500,000 new cameras. Last year they topped that result and achieved an overall sales record in cameras and films.
And then you have to add all the Holga and Superheadz cameras sold to these numbers. In an interview with the German news magazine "Der Spiegel" the founder of Universal Electronics Industries (that is the HonkKong based company which manufactures the Holga camera line) Mr. Lee said that until 2009 more than 1 Million (!) Holga cameras has been sold. And the demand is increasing.
At Photokina 2008 Patrick DelliBovi from Freestyle told me that FS alone is selling some ten-thousand Holga cameras each year.

2. If you want, you can buy the following new precision cameras:

- Nikon F6 and FM10

- Leica M7 and MP

- CV Bessa R3A/M, R4A/M, Bessa III, Bessa III W

- Zeiss Ikon ZM

- Mamiya 7II, RZ 67, 645 AFD-III

- Hasselblad 503CW

- Rolleiflex (DHW) 2,8 FX, 4,0 FW, 4,0 FT, 6008 AF, Hy6, Rollei 35

- Fuji GF 670, 670 W, Natura, Klasse W and S, Clear Shot

- and LF cameras from more than 20 manufacturers worldwide

3. Let's have a look at the numbers of recently produced new film cameras:
The CIPA (organisation of Japanese camera manufacturers) has published the production numbers over the years:

During 2000 and 2010, the decade in which digital became the main photographic medium of the masses, significantly more than 91 (!!) million film based cameras were sold. Yes, 91 millions, it is not a typo.
So much young, "fresh", cameras are in the market.
And about 300 million older ones which are in working condition.
There is a huge excess of analogue cameras in the market.
Much much much more cameras than phtographers out there.

The film manufacturers have to face lots of challenges. But a lack of film cameras? No, definitely not, this problem is simply not existent at all!
And because of the huge number of working cameras in the market, that will be no problem during the next 40 - 50 years.

Aristophanes said:

No labs—the total backbone of industrial film production—are opening.

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Wrong in such general terms. The LSI is integrating labs in some of their new Lomography Gallery Stores. It is planned to extend this in the future.
About 12 new LGS in metropol areas worldwide will be opened this year. During the next three months for example in Istanbul, Mumbai and Bangkok.
I know of two independant new labs here in Germany, too.

Best regards,
Henning

CGW said:

Lomography amounts to a drop in the bucket in the huge N. American market.

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Sorry, that's simply wrong. You don't know the numbers.
LSI is meanwhile one of the biggest sellers of film both in North America and worldwide! They sell millions of films every year, and their numbers are continously increasing.
Kodak is quite happy to coat the colour negative films for LSI (and the X-Pro 100).

And it is not LSI alone:
What do you think why Freestyle is concentrating for years on selling the Holga line of cameras? Why they market themselves as "Holga headquarters"?
They know what they do. That film market is big and an essential part of their business.
Without the demand from this lo-fi photo movement much more film types would have been discontinued.
That's the reality, whether you like that or not.

Best regards,
Henning

Lomo toy cameras are interesting (I have a sprocket rocket) but they are mostly sold as a fashion accessory. The local store here sells them as that. I think Lomo is a genuine photo effort, but apparently 70% of US households have a fishing rod, but less than 10% regularly use them. Digital cameras have replaced film for vernacular, volume shooting.

I do think there is a market for film. I've never said otherwise. But film cannot economically compete with digital, nor should it try. L

Henning Serger said:

Sorry, that's simply wrong. You don't know the numbers.
LSI is meanwhile one of the biggest sellers of film both in North America and worldwide! They sell millions of films every year, and their numbers are continously increasing.
Kodak is quite happy to coat the colour negative films for LSI (and the X-Pro 100).

And it is not LSI alone:
What do you think why Freestyle is concentrating for years on selling the Holga line of cameras? Why they market themselves as "Holga headquarters"?
They know what they do. That film market is big and an essential part of their business.
Without the demand from this lo-fi photo movement much more film types would have been discontinued.
That's the reality, whether you like that or not.

Best regards,
Henning

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Think we've been here before--data instead of infomercial hype for a change? Recall the evidence was a bit lacking from the last time you pitched this.

Last I looked CIPA stopped listing film camera sales 4 years ago when demand fell off a cliff and all major manufacturers stopped P&S camera manufacture Maybe I am wrong, but I looked and cannot find them.

They also count disposable cameras.

CGW said:

Think we've been here before--data instead of infomercial hype for a change?

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O.k., you call facts you don't like informercial hype....
LSI sold about 7 million films last year.

Regards,
Henning