Kodak Axes Digicams, but keeps film

[keithwms]

Should we rebrand APUG in Analog Photography Undertaker Group after you lost your favorite lab

thanks for that good morning chuckle

 

[CGW]

When Henning posted 90+ million analog cameras sold after 2000, (there was a url link here which no longer exists). Now it's suddenly old news? Jeez.

He didn't talk about personal facts but about market research he did and was paid for. Nobody has paid you for your doom&gloom "research" so far and there may be a good reason for that. Think about it.

In the last few days you have provided no facts and confronted those who did with cynicism, ridicule and attacks to their credibility. Interesting enough, (there was a url link here which no longer exists) in this very thread, which you conveniently left unanswered: what's your point, CGW? Should we all give up film now because Canadians don't shoot enough analog to support their pro labs? Should we rebrand APUG in Analog Photography Undertaker Group after you lost your favorite lab in Toronto? What is it? Care to tell us? Or is (there was a url link here which no longer exists) indeed correct? Or is it (there was a url link here which no longer exists)?

Henning has an issue with documenting his assertions with data others could check. If you, Henning, or anyone else here is sufficiently innumerate to read time series data or financial statements, then don't be surprised when you're called on it.

 

[CGW]

With the amount of crap spewed in here, I have mostly this to say:

The lack of camera manufacturing is maybe important for the film market in the short (5-10 years) term because the market can't really grow by more than 2x-4x its current levels... and I think it won't grow much at all and there's more than enough reliable old equipment around to support the current market level for a decade. Easily.

Within that time frame (absolutely no longer than 10 years), I expect to see open-source camera plans being released that can be executed using 3D printing and laser cutting technology. The manufacturing tech is here now and while it's a little expensive at the moment ($1-10k for a 3D printer, $5-50k for laser cutting and/or high quality milling), it's good enough to make everything in an RB67 except the lens cells. Prototype manufacturing is a huge area of current research and within a decade, you can expect to be able to send a design file to a contract manufacturer and receive back a complete mechanical camera kit. Maybe assembled.

Slightly more plausible is a new species of high quality, affordable scanners. Can't think of anything more likely to keep--maybe even increase--film consumption.

 

[Rudeofus]

Henning has an issue with documenting his assertions with data others could check.

Unlike you, Henning has a job in this business which usually means he can't talk about this freely. Neither does PE write freely about Kodak's trade secrets, nor would Ryuji Suzuki post all his new recipes. All three have high authority here, though.

If you, Henning, or anyone else here is sufficiently innumerate to read time series data or financial statements, then don't be surprised when you're called on it.

Freestyle's press release is not in contradiction with financial data, but with numbers you conveniently extrapolate and want to sell us as "hard financial data". The financial data (there was a url link here which no longer exists) many times ends in Q3/2011, which means you have no data on 2011.

And once more again: what's your point? Should we all ditch our beloved gear and use dSLRs instead? Or should we nuke Canada from high orbit for its lack of love for analog photography? Or does it suffice to mail you a "Condolences, we all weep with you because your lab closed, CGW" card? Here, have some.

 

[CGW]

Unlike you, Henning has a job in this business which usually means he can't talk about this freely. Neither does PE write freely about Kodak's trade secrets, nor would Ryuji Suzuki post all his new recipes. All three have high authority here, though.

Freestyle's press release is not in contradiction with financial data, but with numbers you conveniently extrapolate and want to sell us as "hard financial data". The financial data (there was a url link here which no longer exists) many times ends in Q3/2011, which means you have no data on 2011.

And once more again: what's your point? Should we all ditch our beloved gear and use dSLRs instead? Or should we nuke Canada from high orbit for its lack of love for analog photography? Or does it suffice to mail you a "Condolences, we all weep with you because your lab closed, CGW" card? Here, have some.

It's your choice to ignore whatever troubles you. The trend line Aristophanes traced isn't likely to be altered by Q4/11 or Q1/12 numbers. The rest of your post is just splenetic rant.

 

[Rudeofus]

It's your choice to ignore whatever troubles you. The trend line Aristophanes traced isn't likely to be altered by Q4/11 or Q1/12 numbers.

So what was "hard financial data" suddenly turns out to be "isn't likely to be altered" drivel ? This is what you base your aggressive rants about? THAT'S IT ???????

Give it a rest already, will you ?

 

[Aristophanes]

Henning,

That 15 million of still photo consumer may not be there as of 2012.

Kodak'S FPEG posted about $1.35 billion in sales for 2011. See the Q3 financials. There are no Q4 nor 2011 AR because of the Ch.11.

Their pro forma estimate for 2011 was about 2x that:

http://business.library.wisc.edu/resources/kavajecz/09 Fall/kodak_rep.pdf

The market for film-related products fell much, much faster than Kodak anticipated. The traded share values reflect this loss of revenues interpreted as a loss of equity.

Someone did a nice summary graph from 2010:

Dead Link Removed

Kodak is #1 with about 65% of the film market. FPEG doesn't break it down, but sources say that well over 70% of FPEG revenues come from the motion picture side due to sheer volume. I've heard as much as 90%. It is not clear if this revenues or some unit of measure (per meter?) but MP film probably dominates. If it's a revenue scenario then total non-MP film sales are worth let's say $500 million to Kodak.

That means the whole market for still photo film is maybe $900 million including Fuji and the smaller players. Apparently Ilford is $35 million in sales. I am not sure that if that is from film or what the breakdown is there. I only offer it as perspective.

So how much film is consumed per consumer? Here's a study (p.15):

http://www.pace.edu/emplibrary/tfinnerty.pdf

8.2 rolls per year. That's the average rate that sustained the film market for decades. Let's use the highest average on the chart even though it is for the wealthier N.A. and Japanese markets. Notes also how poorly Europe fares at 50% the consumptive rate marking only the richer economies of France, Germany, and the UK.

Let's make an assumption and that today's film shooter are more enthusiastic as the casual shooter is now digital. Let's triple that to 25 rolls per year. Just an exercise tapping into APUG enthusiasm.

Let's add another factor, the cost/roll. Let's use Portra 400 @ $6.75/roll at today's prices, but we'll drop $1 off that to reflect a tiered pricing system with less costly B&W in the mix. We're at $5.75/roll, all in 35mm to keep it simpler.

Let's just work with gross sales at the consumer/retail mark. No margins or profits. We know Kodak's net, so for this let's go for the absolute big number of all transactions at MSRP.

25/rolls per year x $5.75/roll x 15 million consumers = $2.16 billion in annual revenues.

But today's numbers show ~$900 million net across the industry. So even if the margins at retail and distribution are 2x that to get us back to retail gross, the market has already fallen below the 15 million person mark AND I've tripled their consumption per year from the average just to close AND I banged up the cost/roll assuming they are more discerning top-tier purchasers.

If we drop those average consumption closer to the WORLD average of less than 5 rolls/year we are already well below the ~$900 million from the 2011 financial concatenation.

I suspect right now far more shoot film than 15 million. I bet it's closer to 100 million or more as an educated guess. But they are shooting far, far less than 8 rolls/year because they also shoot digital. They are not even close to shooting 25 rolls/year (APUGers excepted). Even if we assume there are close to 200 million film cameras still in circulation, they are not being used often enough as refelcted in declining film revenues.

Translation: There's no market punch to get the film camera out. That's why I emphasizes camera sales because, as Lomo has figured out, a new camera in the hand spurs shooting. Creating a market expectation that more advertising will get people's old film cameras out of the closet to shoot film with all the added development costs and time is not a market to bet on. Why is it that in your view new Lomo camera sales are a good consumer driver to film, but new SLR's or AF P&S's are not? You want to generate excitement in a product, Biz school 101 is you need a complete package, not eBay closet cleaning leftovers.

The caveat is that we don't know the breakdown in coated production between still motion picture and still photography for FPEG. Even if it is 50% there is still a severe demand problem for still photo film; lots of potential consumers but far, far too few shooting often enough to float sales and keep labs going. What this demonstrates is that still photo roll and cartridge fill depends absolutely on the motion picture side to keep revenues up and keep the Kodak (and probably Fuji) coating factories humming.

And frankly, I don't believe your Euro observations. Hard financial data shows that Europe well under-performed on film consumption.

What's the critical mass to keep to production going and film affordable? I don't know.

This also does not represent the over-productive capacity on the supply side. Do these machines produce so much in a session that they have to stay idle for weeks of the year? If so, the price goes way up. Lots of variables.

 

[Photo Engineer]

It is axiomatic that some of us have an inside track to what is going on. I have more information than most, but still not enough to satisfy me and enable me to make conclusions as I have seen some do here. I do know that the truth lies half way between the worst and the best, as that has been the case throughout all of my life's experiences!

So, take it from me. NO ONE has the truth here. A couple of us are closer than others! Rudeofus has said it well!

PE

 

[CGW]

It is axiomatic that some of us have an inside track to what is going on. I have more information than most, but still not enough to satisfy me and enable me to make conclusions as I have seen some do here. I do know that the truth lies half way between the worst and the best, as that has been the case throughout all of my life's experiences!

So, take it from me. NO ONE has the truth here. A couple of us are closer than others! Rudeofus has said it well!

PE

I prefer published sources. Hearsay, inside tracks, unnamed sources, and unconfirmed reports remain just that till verified. That's what I regard as axiomatic.

 

[Photo Engineer]

And that is why what you have to say is limited. My comments are also limited but for another reason.

PE

 

[Aristophanes]

It is axiomatic that some of us have an inside track to what is going on. I have more information than most, but still not enough to satisfy me and enable me to make conclusions as I have seen some do here. I do know that the truth lies half way between the worst and the best, as that has been the case throughout all of my life's experiences!

So, take it from me. NO ONE has the truth here. A couple of us are closer than others! Rudeofus has said it well!

PE

With all due respect, the truth is Kodak stock trades at $0.40.

There are dozens of institutional investors who have made similar calculations to mine. Each through their own methodologies reached market consensus.

 

[Rudeofus]

Kodak'S FPEG posted about $1.35 billion in sales for 2011. See the Q3 financials. There are no Q4 nor 2011 AR because of the Ch.11.

So there you have it. There is NO hard financial data for 2011, yet you claim that Freestyle and others lie through their teeth because what they say contradicts number you make up by simple and linear extrapolation. Your extrapolation boils down to

It is not clear if this revenues or some unit of measure (per meter?) but MP film probably dominates. [...] I am not sure that if that is from film or what the breakdown is there.
[...]
Let's make an assumption and [...] Let's triple that to 25 rolls per year.
[...]
[another factor, the cost/roll. Let's use Portra 400 @ $6.75/roll at today's prices, but we'll drop $1 off that to reflect a tiered pricing system with less costly B&W in the mix. We're at $5.75/roll, all in 35mm to keep it simpler.
[...]
far more shoot film than 15 million. I bet it's closer to 100 million or more as an educated guess.
[...]
The caveat is that we don't know the breakdown in coated production between still motion picture and still photography for FPEG.
[...]

(bold added by me)

This may not be less informed than some other postings here including mine, but please don't sell this as hard numbers. They may be right but they may be way off. So please refrain from accusing people of lying if they report different numbers.

 

[Aristophanes]

So there you have it. There is NO hard financial data for 2011, yet you claim that Freestyle and others lie through their teeth because what they say contradicts number you make up by simple and linear extrapolation. Your extrapolation boils down to

(bold added by me)

This may not be less informed than some other postings here including mine, but please don't sell this as hard numbers. They may be right but they may be way off. So please refrain from accusing people of lying if they report different numbers.

Kodak Q3 financials are hard data. They even say they anticipate Q4 2011 to show the same relative decline.

If anything I made the case for current film consumption and possible scenarios optimistic. If we go off the historic averages, then a scenario for industrial roll and cartridge film production does not exist, not with the current downward trajectory of lost revenues. By all means, disagree with my assumptions.

I was specifically responding to Mr. Henning's 1% arbitrary # of consumers exclusive to film. I think that highly ambitious. A better scenario is 5% of the market dabbling in film closer to the average consumption (or slightly higher) of 5.x rolls/year. The market cannot be seen as film or digital in exclusives; film will depend on large numbers of digital shooters who seek alternative processes. I suspect most people buying vinyl also have iPods. Same concept. Film is a parasitical alternative, and that's not a bad thing. in fact, it's a marketing opportunity.

It still depends on MP film for economy of scale. B&W will depend on lab-processed C-41 film for the same. The home darkroom set depend on all of the above. The idea that there will be industrial film production for home darkroom printing is a fantasy. There are pyramidal dependencies. This is why FPEG doesn't split their data.

I did not even get to price scenarios. If you reduce demand you lose economy of scale. Prices will therefore rise. If prices rise, less consumption will occur.

I will reiterate that the wild card here is the sustainability of MP film. Myabe Quentin Tarantino will buy Kodak :confused:

 

[Wayne]

Didnt I say that about 5 pages ago?

 

[clayne]

Aristophanes, I think you have an issue with wanting to be right at all costs. It's the tireless rebutter effect. We all realize you have an opinion and some fair points about the situation - but I think if you don't let off with it after a certain while, you're going to (and already have) alienate the same people who could eventually help you.

We're all well aware of the situation with Kodak - and as long as you keep trumpeting the sky is falling line, you'll be a target here.

 

[PKM-25]

Aristophanes gives an impressive amount of data and opinions because of it, PE does the same from his vast experience and of course Henning offers his best insights....The rest of us form our own opinions based on what we knew before we read all of this and what we took away from it. Aristophanes actually gives a form of road map in how Kodak could emerge from this still making film...but none of us are in the position to tackle that kind of financial investment.

So when I asked where do we, the enthusiast or pro film user, go from here and what do we do with this info...I got no answer that would apply to us. I know why that is...there is no answer right now but to either freak and stock up like the stuff will be gone tomorrow or just do the best we can and assume that like PE says, it will all most likely play out that it ends up somewhere between the best and worst case scenario.

So I am doing things like selling stuff I don't use, re-evaluating stockpiles of rare films that I have like Techpan and even holding off on buying a home this year despite the market. I am reacting to this info in the middle of the worst and best case scenario in both stocking up and rotating stock with regular purchases as stocks are depleted. I am also putting out the good vibes, having more shows and doing my best to put a positive spin on it all.

So what Aristophanes tells us, the users of film, really does not put us in any position to help other than buying and using more film and promoting the craft better, we can not help Kodak keep film around other than that. With two threads like this amassing some 35,000 views and nearly 800 posts in a very short time, I have to say that these kinds of threads cause more damage than good when it comes to keeping people more positive about using film.

But if it bleeds, it leads, right?

 

[Aristophanes]

Aristophanes, I think you have an issue with wanting to be right at all costs. It's the tireless rebutter effect. We all realize you have an opinion and some fair points about the situation - but I think if you don't let off with it after a certain while, you're going to (and already have) alienate the same people who could eventually help you.

We're all well aware of the situation with Kodak - and as long as you keep trumpeting the sky is falling line, you'll be a target here.

If you want to turn something into a flame war or mud-slinging, that's your emotional take and you are entitled to that challenge.

A discussion is a discussion but a good discussion is one armed with facts and references. If there is one thing that gets me it is internet memes based on unsubstantiated corporate PR. A US housing market floated on that for too long, so I come by that approach honestly.

So, no, I don't think everyone understands the Kodak situation. Sadly, as with many investor and market activities, the uninformed (or un-self-informed) parrot the easy news and don't dig for the real data. Maybe I am commenting on a societal attitude in general. YMMV.

This isn't about help. It's just a mental exercise to dissect markets and suppliers. If it's not your cup of tea, don't read. I could not care less about Pyro developing

 

[ciocc]

After reading Cteins' article in OP titled: "Securing your film photography future", I've decided to take his advice and fill my freezer with a lifetime supply of my favorite film: Kodak Tmax 400-2 and stop worrying. As he says, I'll be happier in both in short and long run. To be clear, he only recommends this to those who *truly* believe their favorite film will no longer be available, and only with B&W. He's says color is more problematic and offers no solution. I already did this with my favorite B&W paper which subsequently disappeared, and having a freezer full of it makes me sleep good at night. I'll sleep even better with a freezer full of TMY-2. In replying to a comment to his article, he states that he believes only a tiny fraction of photographers will actually stock up on a lifetime supply of their favorite film - most will "work within the sytem".

 

[fotch]

The trouble with all these expert opinions is they are probably wrong.

The old saying, "If your so damn smart, why ain’t you rich?

If your rich, why are you wasting your time here?


Time will tell us how the story unfolds; I am willing to wait, please, go on to bigger and better things already.

 

[Hatchetman]

A discussion is a discussion but a good discussion is one armed with facts and references. If there is one thing that gets me it is internet memes based on unsubstantiated corporate PR.

Annual reports are loaded with unsubstantiated corporate PR.

 

[ciocc]

snip----->If it's not your cup of tea, don't read.,<-----snip

Agreed. However, I think your argument can be distilled into 3 simple statements: 1. Investors care about growth, growth and more growth. 2. There simply aren't any long term growth prospects for film. 3. This makes film a very unattractive market for an investor.

 

[Thomas Bertilsson]

Dear Aristophanes,

I'm sure you, and everyone else have valid viewpoints.

I'm sure you realize that all those that would like to discuss this matter from a viewpoint other than yours, are shoved aside because of your determination to prove your point, whatever it is. You tell me that if I don't want to read it to just abstain, but I'm afraid you leave little choice since you're omnipresent in these threads.

I'm not saying you're wrong. Remember that. But you are overbearing and dominant, and even though you're probably an expert in your field, I recommend pausing to consider just HOW important it is, not only to you, but to the rest of us as well, that you are right.

Over and out. I'm going on APUG vacation for a couple of days.

 

[Henning Serger]

Concerning the whole film market consumers have always been the most important user group of film. 80 - 90% of the film was shot by consumers, not by pros in the glory days of film.

This was never the case in the huge N. American market. Pro labs collapsed when pros stopped shooting film(get it?) and consumer mini-labs vanished when consumers stopped shooting film. Denying this is like denying gravity.

Sorry, wrong again.
Due to official data from PMA in the peak sales period of film (1999 - 2001) more than 160 million SUCs were sold in the US (in 2010 still 36 millions).
Only SUCs, normal consumer film not included.
The SUC sales alone surpassed the whole market for professional film.

You said the sales numbers for professional have been higher than consumer film.
Have you ever realised that professional film has been 3x - 6x more expensive than consumer films of the same speed? Is that because professional film is 3x - 6x better than consumer film?
No, it is because consumer has been and still is sold at much higher volumes than professional film.
The reason why I can buy Fuji made ISO 400 CN film for only 85 Cents in the drugstores , and have to pay about 4,5x - 5x more for the professional Fuji Pro 400H is primarily that the consumer film is made and sold in significantly higher numbers. Economies of scale.

The whole professional market has always been relatively small compared to the consumer and enthusiast amateur market (relative terms, not absolute terms).
Hasselblad/Imacon made a statement concerning this fact at one introduction of their digital backs. Their CEO said that about 250,000 photographers worldwide are fulltime professional photographers. 250,000 compared to a whole market of more than 1,5 billion.
At my two factory visits at Franke&Heidecke (Rolleiflex; now DHW) I discussed this topic intensively with their marketing%sales rep D. Kanzer. He said that 80% of their medium format cameras has been sold to enthusiast amateurs, only 20% to professionals. He said the whole professional market has always been very dependant on amateur demand. Most professional cameras could not have been developed without the demand from the amateurs.

Of course the professionals generated a huge film demand in absolute terms which kept the professional labs running. No one is denying that.
But this has never been the majority of film consumption, it was not dominating the photofilm market.

Regards,
Henning

 

[Photo Engineer]

I have said over and over that NO ONE - including myself can be right about this. There is not enough information in the public domain about Kodak.

However, I do agree that Henning has a lot of data correct. You see, he is not an armchair observer. He goes out and digs up data and does attend trade shows. I remain in contact with dozens of people still working in the industry as well. Even so, neither of us can be 1005 sure of anything at this point.

Kodak was in court this AM and I have not heard the latest news.

PE

 

[Henning Serger]

Thanks for the good information and patience, Henning.

You are welcome.
I want to write for the apuggers who are interested in solid information.
Yes, patience is needed here indeed.........and sometimes a good old Single Malt . Thanks my Scottish friends for this wonderful stuff

One thing that we should probably come to terms with is the benefit of narrowing the number of films in production. This will be an uncomfortable question for some of us, but: do we really need an ISO 25, 50, 100, 400, and 3200 b&w films, and several of those with different grain types? And from different manufacturers?

Perhaps it's time to start advocating more versatile films and spend less time complaining about the loss of niche products.

Fully Agreed.
Yes I have now less slide films than 15 years ago. But the films I have today are much much better than the old stuff.
If I have the choice between 10 mediocre films, and 3 excellent films, it's absolutely no question, I'll take the three excellent films!

Why crying about the dicontuniation of EPP or EPN? E100G is a much better film in all respects.
Provia 400X surpasses most ISO 100 slide films of the 90ties.
Why crying about Neopan 400? TMY-2 surpasses it in all parameters.
Why crying about the loss of APX 25? With Agfa Copex Rapid in Spur Modular UR New I get much better results.

Best regards,
Henning