Kodak committed to making film "as long as there's demand"

[brbo]

Kodak's only serious competition in the color film market is Kodak. But motion picture films have very different mechanisms controlling their pricing compared to C-41, which at this point is just catering to a niche market.

Not really. Kodak probably makes more money per roll of ECN-2 film that is shot in a still camera than from a "regular" C-41 roll it sells to Alaris. It's Alaris that is loosing (making less) money and with Alaris' pricing lately I kinda find it hard to sympathise.

 

[MattKing]

Not really. Kodak probably makes more money per roll of ECN-2 film that is shot in a still camera than from a "regular" C-41 roll it sells to Alaris.

Somehow I don't see this - perhaps because Eastman Kodak isn't finishing/confectioning any of the ECN-2 films being re-purposed for still use.
And the costs and bottlenecks relating to finishing/confectioning play a huge role in the costs being passed on to Kodak Alaris.

 

[cmacd123]

The vison ECN-2 film sold for still use also does not impact the still film finishing capacity at Kodak, with the exception of a few folks like CineStill,

the video posted by "Smarter every day" showed a Rotary Movie perforating machine. which can perforate and edge sign Movie Negative in "real time" (ie over 90 ft a minute)

Most of the stock is finished at 400 and 1000 ft rolls in the Movie film finishing department, and a third party is responsible for loading it into still Cassettes. even Cinestill likely gets there special runs as unperforated pancakes and uses another film to perforate and package it.

 

[Don_ih]

Somehow I don't see this - perhaps because Eastman Kodak isn't finishing/confectioning any of the ECN-2 films being re-purposed for still use.

Eastman Kodak selling the motion picture film in 2000 foot rolls to places like Analogue Wonderland, who pay some guy named Mr. Whatever minimum wage to spool that into cassettes and put a sticker on them. That's what makes all those "brands" possible - the fact that anybody can but a 2000 foot roll and do whatever they want with it.

So, undoubtedly, Eastman Kodak is making more money selling that film to those clowns than they make from selling finished individual rolls of Portra to Alaris. I thought you'd be the first to say that.

 

[MattKing]

Eastman Kodak selling the motion picture film in 2000 foot rolls to places like Analogue Wonderland, who pay some guy named Mr. Whatever minimum wage to spool that into cassettes and put a sticker on them. That's what makes all those "brands" possible - the fact that anybody can but a 2000 foot roll and do whatever they want with it.

So, undoubtedly, Eastman Kodak is making more money selling that film to those clowns than they make from selling finished individual rolls of Portra to Alaris. I thought you'd be the first to say that.

It is hard to say where Eastman Kodak is making more money in total - the volumes to KA are probably still significantly higher that the sales of ECN-2 film not going into movies - but I've no doubt that the ECN-2 re-purposers are adding significantly to the Eastman Kodak bottom line.
Who knows how much of the coating line time is also devoted to non-photographic products. That is apparently an area of significant growth.

 

[Alan Edward Klein]

Turning the expression, "what they can't make in markup they'll make up in volume" on it's head, Eastman Kodak probably is squeezing the highest prices they can from their sales to Alaris, since Alaris has to buy film from Eastman and nowhere else. How much attention Eastman pays to sales volume and final selling price by Alaris is suspect. They just let Alaris eat the difference by forcing them to lower their markups when sold to the public to keep volumes up. So Eastman may be getting the bulk of the overall profits. So Eastman gets a profit of let's say 40% and Alaris gets a profit of let's say 15%. Who knows without seeing both side's sales orders.

 

[BrianShaw]

That seems quite plausible, Alan.

Another complete unknown seems to be Eastman Kodak’s relationship and business with the government(s)… at one time a huuuuuuge customer.

 

[brbo]

If Eastman Kodak have been collecting huge margins from Alaris then they have been lying in their financial reports. Which, I think, is illegal. They've improved their position slightly with increased quantity/price mix, but nowhere near anything as drastic as the price increase that the customers have experience in recent years.

I think Alan's speculation is just that, pure speculation with zero evidence to support it.

On the other side we have millions of rolls of "hand rolled" Eastman Kodak coated film that must be a magnitude more expensive to finish that those rolls available to Alaris. And yet they can compete with Alaris in recent years. I wonder what caused this market to open up for them. EK lowering their prices for non-Alaris customers or Alaris raising prices?

 

[MattKing]

I wonder what caused this market to open up for them.

COVID 19 and how it affected Kodak Alaris and its relationships with both its customers and its suppliers (Eastman Kodak and Sino Promise and others).
We are still an immense distance away from the way things were before the pandemic.

 

[Anon Ymous]

COVID 19 and how it affected Kodak Alaris and its relationships with both its customers and its suppliers (Eastman Kodak and Sino Promise and others).
We are still an immense distance away from the way things were before the pandemic.

Uh, I disagree. Someone's pricing policy gave them this opportunity.

 

[MattKing]

No - Kodak Alaris was put into serious, near business ending difficulty by the pandemic.
The contract in place is a replacement of the one that was put into breach by the near shutdown, world-wide of all the markets.

 

[MattKing]

No.
I have no knowledge of the replacement terms, other than reliable communications that make it clear that they have increased Eastman Kodak's flexibility with respect to the Cinestill types of film offerings.
If I knew more, I probably couldn't share that anyways.
I think we under-estimate as well how much KA was hurt by the pandemic in respect to their photo-chemistry and colour paper business. Who knows if the payment for that business was either made in full, or reduced tremendously by the pandemic's effects.
World-wide distribution businesses are tremendously expensive to run, and tremendously dependent on all the things that were most impacted by the pandemic.

 

[Sal Santamaura]

...Alaris has to buy film from Eastman and nowhere else...

Unless you have insider knowledge and are likely violating a nondisclosure agreement, you don't know that. I suspect, but don't know, that Alaris is prohibited from sourcing film anywhere except Eastman Kodak and then marketing it as Kodak film. What's unclear is whether the agreement prohibits Alaris, which is a marketing and distribution entity, from obtaining film from another manufacturer and reselling it without the Kodak brand. Like all corporations, Alaris' exists solely to earn profit for its owners. As Eastman Kodak continues to extravigantly raise prices, most likely decreasing the size of Alaris' black and white film market, we don't know if Alaris could repurpose some of its infrastructure by performing the same functions for, say, HARMAN. In the U.S. it might offer a better deal than Roberts, for example. This is pure speculation, but not outside the realm of possibility.

 

[koraks]

Like all corporations, Alaris' exists solely to earn profit for its owners

Hm, so that's what decades of work on CSR and business ethics has resulted in. There's a long way to go, yet. But I'd wager to say that Alaris, like any corporation, also exists to serve a couple of societal needs, such as income for employees, opportunities for people to develop themselves, consumer requirements being met etc. The whole "organization as a nexus of interests" view wasn't even new when I went to university and it's certainly well-established today. Add to this the questionable shareholder value for some corporations, including really big ones, and sometimes for extended periods, and it's easy to see that the view you expressed does not accurately capture the role of corporations in society.

 

[faberryman]

I think we under-estimate as well how much KA was hurt by the pandemic in respect to their photo-chemistry and colour paper business. Who knows if the payment for that business was either made in full, or reduced tremendously by the pandemic's effects.

It is hard to underestimate or overestimate when we have no basis on which to estimate. And since we don't know if payment for the business was made in full or reduced tremendously (or not tremendously), we can't draw any rational conclusions.

 

[faberryman]

What's unclear is whether the agreement prohibits Alaris, which is a marketing and distribution entity, from obtaining film from another manufacturer and reselling it without the Kodak brand

It is not unclear. It is unknown

As Eastman Kodak continues to extravigantly raise prices...

Without knowing the reasons for the price increases, we cannot say the price increases are extravagant. The price increases could be unjustified, partially justified, or fully justified. And was it Eastman Kodak or Kodak Alaris, or both, who increased prices, and, if both, in what proportion?

This is pure speculation, but not outside the realm of possibility.

Yes, it is pure speculation or, perhaps more accurately, pure imagination.

 

[MattKing]

FWIW, Eastman Kodak's B&W film business has been smaller than Ilford/Harman's since before either of them were in receivership/bankruptcy, and continues to be smaller.
The Kodak B&W still film business is not the major motivator in these issues.

 

[Alan Edward Klein]

If Eastman Kodak have been collecting huge margins from Alaris then they have been lying in their financial reports. Which, I think, is illegal. They've improved their position slightly with increased quantity/price mix, but nowhere near anything as drastic as the price increase that the customers have experience in recent years.

I think Alan's speculation is just that, pure speculation with zero evidence to support it.

On the other side we have millions of rolls of "hand rolled" Eastman Kodak coated film that must be a magnitude more expensive to finish that those rolls available to Alaris. And yet they can compete with Alaris in recent years. I wonder what caused this market to open up for them. EK lowering their prices for non-Alaris customers or Alaris raising prices?

Kodak didn't break out their profits from film so how do we know what margins they have?

 

[Alan Edward Klein]

Unless you have insider knowledge and are likely violating a nondisclosure agreement, you don't know that. I suspect, but don't know, that Alaris is prohibited from sourcing film anywhere except Eastman Kodak and then marketing it as Kodak film. What's unclear is whether the agreement prohibits Alaris, which is a marketing and distribution entity, from obtaining film from another manufacturer and reselling it without the Kodak brand. Like all corporations, Alaris' exists solely to earn profit for its owners. As Eastman Kodak continues to extravigantly raise prices, most likely decreasing the size of Alaris' black and white film market, we don't know if Alaris could repurpose some of its infrastructure by performing the same functions for, say, HARMAN. In the U.S. it might offer a better deal than Roberts, for example. This is pure speculation, but not outside the realm of possibility.

If Alaris was distributing other manufacturers' films beside Kodak's, I think we would know about it. After all, they would be distributing to retailers and wouldn't want to keep it secret. Is anyone aware this is happening?

 

[Don_ih]

Oh yay, another Eastman/Alaris tennis match thread....

 

[BrianShaw]

Oh yay, another Eastman/Alaris tennis match thread....

Man, oh, man… I’m glad I read this again. The first time I thought I saw “cage fight”…

 

[cmacd123]

On the other side we have millions of rolls of "hand rolled" Eastman Kodak coated film that must be a magnitude more expensive to finish that those rolls available to Alaris. And yet they can compete with Alaris in recent years. I wonder what caused this market to open up for them. EK lowering their prices for non-Alaris customers or Alaris raising prices?

I am reminded of the LAST time that Much Motion Picture stock was diverted to the still market, BUT the business cases were different them

In the 1970s, Much TV production was filmed on Motion Picture film, think Star Trek, Hill street Blues, MASH and so on. that combined with Acuall Movie production created a Lot of "short ends", Repack rolls loaded into a camera na dremoved unshot, and production overruns, (where a production would buy 50 rolls and wrap up with 5 rolls left.)

So small Movie labs saw this as an oportunity, and started offering cheep or free 35mm Cassettes of Eastman Colour film, with a warning that Only the movie labs could process it because of the rem-jet. some even used names like "Lab 47" as the 100T eastman colour at the time was 5347. 5293 and (that eras) 5294 ware 320T and 400T ISO which cemented the look of shows like Hill Street Blues, and also was a great speed for available light shooting. {the 5294 number is now resused for the current Ektachome 100D)

the labs would do a one light contact print on Movie print stock and mount the result as as slides. (and some of the print stock in those days was not designed to resist fading as theater prints were generally destroyed after 6 months)

then as now, the lower contrast of Movie stock did not make for great paper prints when directly printed. the practice gradually faded away, except for Movie profesionals wanting to see what a location would look like on film. with Digital capture, the supply of short ends also dried up.

the new wave seems to be using film bought as fresh from Kodak, and also digital prints can adjust the contrast of the movie stock to create "normal looking prints. Even a contact print on 5383 will no longer fade.

the motivation these days may be a combination of wanting to do things different, and also easier logistics. if you take Flic as an example they can repack Vision 3 with a very small crew.

 

[Sal Santamaura]

...Like all corporations, Alaris' exists solely to earn profit for its owners...

Hm, so that's what decades of work on CSR and business ethics has resulted in. There's a long way to go, yet. But I'd wager to say that Alaris, like any corporation, also exists to serve a couple of societal needs, such as income for employees, opportunities for people to develop themselves, consumer requirements being met etc. The whole "organization as a nexus of interests" view wasn't even new when I went to university and it's certainly well-established today. Add to this the questionable shareholder value for some corporations, including really big ones, and sometimes for extended periods, and it's easy to see that the view you expressed does not accurately capture the role of corporations in society.

I freely admit to a lack of familiarity with corporate law in the UK where Alaris is headquartered. In the U.S., I stand by my observation. All the things you list are, here, nothing but PR window dressing. The corporate entity has a fiduciary responsibility to maximizing its shareholders' value and nothing else. I've long understood that, and it was explicitly confirmed to me as the way things are run during lunch with the then-President / CEO of my former employer, the largest aircraft manufacturer in this country.

...What's unclear is whether the agreement prohibits Alaris, which is a marketing and distribution entity, from obtaining film from another manufacturer and reselling it without the Kodak brand...

It is not unclear. It is unknown...

A difference without a distinction. Next.

...As Eastman Kodak continues to extravagantly raise prices..

...Without knowing the reasons for the price increases, we cannot say the price increases are extravagant. The price increases could be unjustified, partially justified, or fully justified...

The reason(s), whether "unjustified," "partially justified" or "fully justified" (whatever those things mean, where a seller need not justify its prices) are irrelevant. From the perspective a retail purchaser of black and white film, compared to the alternatives available, current Kodak film is priced extravagantly.

...This is pure speculation, but not outside the realm of possibility.

...Yes, it is pure speculation or, perhaps more accurately, pure imagination.

Once again, a difference without a distinction.

If Alaris was distributing other manufacturers' films beside Kodak's, I think we would know about it. After all, they would be distributing to retailers and wouldn't want to keep it secret. Is anyone aware this is happening?

Of course not, Alan. I never stated, expressly or implicitly, that Alaris is doing that now. Rather, if its agreement with Alaris permits, doing it would be an alternative revenue stream that built upon Alaris' marketing/distribution infrastructure, facilitating corporate survival as Eastman Kodak skyrocketing film prices put Alaris' continued existence in peril.

 

[mshchem]

I wonder what Cinestill pays to EK for exclusive rights to Remjet free Vision 3 films?

Holy guacamole!

 

[cmacd123]

the resonsiblity of a corporate board to stakeholders was decided by what some consider a bad court case in the states as being strictly to be in the interst of the shareholders. In many other places the rule is that it is a duty to be best interest of the company. (which may require taking the hit for a bad year to protect the future of the firm for example) Many items of US law are different from how things are interpreted in even the rest of the common law world.