KODAK: DID YOU MAKE THE WRONG MOVE A DOZEN YEARS AGO?

[Aristophanes]

Question to all of you: Was digital technology something that people simply migrated to? Or were they trained to?

The technology migrated to the people. Sensor, film, whatever. The processing is no longer a storefront but a chip the size of your fingernail.

You got a smaller camera with its own processing, and it can do video as well.

For how the vast majority take and use photographs (social media now), it is clearly superior.

But it should NOT be the only way.

 

[DREW WILEY]

Why would I give it a rest? This is what I am paid to do. I can tell a helluva lot about the future of a
company by a face-to-face interview with the CEO and his key staff. Schmoozy incompetent CEO's hire "yes" men who only tell them what they want to hear, tend to lay off the experienced ones who built the company in the first place, and rarely interact with their actual customers. They pontificate
from ivory towers. A CEO who means business, on the other hand, wants to hear the problems and potential solutions, and places a premium on people with a proven track record. Other warning signs are when you want to sever your traditional customer base and take things off in a completely different direction; diversification is important, but not if it makes enemies of your existing customer base. If I was an investor per se, Kodak would have red flags all over the place. But I'm a distributor spending someone else's money, so have to be even more careful. I wasn't exaggerating at all; quite the opposite. Sometimes the only stupider person I meet in a big corporation other than the marketing MBA's is the CEO himself. He'll be super friendly and energetic - the Frat president type, still known for throwing the best parties - but otherwise clueless. I've seen it happen over and over and over. Wall St is all about smoke and mirrors, often at the expense of the investors and the long term health of the corporation itself.

 

[MaximusM3]

Why would I give it a rest? This is what I am paid to do. I can tell a helluva lot about the future of a
company by a face-to-face interview with the CEO and his key staff. Schmoozy incompetent CEO's hire "yes" men who only tell them what they want to hear, tend to lay off the experienced ones who built the company in the first place, and rarely interact with their actual customers. They pontificate
from ivory towers. A CEO who means business, on the other hand, wants to hear the problems and potential solutions, and places a premium on people with a proven track record. Other warning signs are when you want to sever your traditional customer base and take things off in a completely different direction; diversification is important, but not if it makes enemies of your existing customer base. If I was an investor per se, Kodak would have red flags all over the place. But I'm a distributor spending someone else's money, so have to be even more careful. I wasn't exaggerating at all; quite the opposite. Sometimes the only stupider person I meet in a big corporation other than the marketing MBA's is the CEO himself. He'll be super friendly and energetic - the Frat president type, still known for throwing the best parties - but otherwise clueless. I've seen it happen over and over and over. Wall St is all about smoke and mirrors, often at the expense of the investors and the long term health of the corporation itself.

Taking all the sentimentalism and romance out of the equation, from a strictly business point view, I think that you are 1000% correct...or at the very least how it applies to Kodak.

 

[jrhilton]

A quick search after reading another thread here shows 35mm and 65mm movie film cameras still being produced for production..

ARRI, Panavision and Aaton have ceased production of film cameras, and they were the big boys.

Panavision made their last Millennium XL in 2009 and Arri moved to building on demand in 2009 from existing stock parts. Aaton's last film camera was the Penelope and they only sold around sixty according to a creativecow interview with Jean-Pierre Beauviala, they are now only interested in the digital Penelope.

The demand for new movie film cameras dried up a few years ago because there are so many good used ones, sitting around at rentals, underutilised at best, unused at worst.

 

[CGW]

Why would I give it a rest? This is what I am paid to do. I can tell a helluva lot about the future of a
company by a face-to-face interview with the CEO and his key staff. Schmoozy incompetent CEO's hire "yes" men who only tell them what they want to hear, tend to lay off the experienced ones who built the company in the first place, and rarely interact with their actual customers. They pontificate
from ivory towers. A CEO who means business, on the other hand, wants to hear the problems and potential solutions, and places a premium on people with a proven track record. Other warning signs are when you want to sever your traditional customer base and take things off in a completely different direction; diversification is important, but not if it makes enemies of your existing customer base. If I was an investor per se, Kodak would have red flags all over the place. But I'm a distributor spending someone else's money, so have to be even more careful. I wasn't exaggerating at all; quite the opposite. Sometimes the only stupider person I meet in a big corporation other than the marketing MBA's is the CEO himself. He'll be super friendly and energetic - the Frat president type, still known for throwing the best parties - but otherwise clueless. I've seen it happen over and over and over. Wall St is all about smoke and mirrors, often at the expense of the investors and the long term health of the corporation itself.

Truisms. Do you have an MBA?

 

[Aristophanes]

It's not MBA's who have been solely responsible for the end of motion picture and still film photography cameras being manufactured.

Without the assembly lines for cameras continuing, the emulsion lines stop as well. That's one valid why shareholders are withdrawing from Kodak. Even roll film B&W is endangered, and LF sheet film. It doesn't matter how it's cut, it's all part of the necessary economy of scale.

 

[wblynch]

Have you been to B-school, have a business degree, tried to get one?

I answered you above. Yes.

Have a great weekend.
-----

To jnanian, you are correct. Not all are the same, and I have painted a broad stroke. Of course I speak in generalities to trends.

I give an example... (don't want to go crazy in case studies)

A Very Large Company, spent 3 years and over 35 million dollars US to build a computer system that in the end failed and did not work.

Not only was the system late and over budget and (as already mentioned) did not work... it generated hundreds of millions of unnecessary financial transactions that overwhelmed the financial system and had to be turned off. So it was WORSE than simply a system that didn't work because it broke other systems that did.

Now, considering that management made a decision to eliminate local talent with vast experience and background in favor of lower-cost labor from an off-shore source, would one consider this a COST SAVINGS?

Someone sitting in front of a spreadhseet looks at the hourly cost and declares they're saving money but they get nothing for their money. No Value.

Yet no one challenges the development model because everyone KNOWS that offshoring saves money. - MBA mentality

 

[wblynch]

Being someone that does have a MBA from Stern/NYU I have been on both sides of discussions of passion versus dollars...

...God bless the kids with the toy cameras and the 120 film with no idea what an f-stop is. I am glad they are wearing plaid and buying farms with their hipster girlfriends and figuring things out as they go. Maybe its the 20 somethings that will save the last few pieces of what we were too careless to pay attention to.

Old Crow, a great post !

.... Sometimes the only stupider person I meet in a big corporation other than the marketing MBA's is the CEO himself. He'll be super friendly and energetic - the Frat president type, still known for throwing the best parties - but otherwise clueless. I've seen it happen over and over and over. Wall St is all about smoke and mirrors, often at the expense of the investors and the long term health of the corporation itself.

Drew, also a great post

---

I'll bet the manufacturers of Magnetic Recording Tape only wish their users had been as passionate about that medium.

 

[tomalophicon]

Old Crow, a great post !



Drew, also a great post

---

I'll bet the manufacturers of Magnetic Recording Tape only wish their users had been as passionate about that medium.

Well there is still a market for what is being made and sold.
http://www.quantegy-online.com/audio.html

 

[CGW]

I answered you above. Yes.

Have a great weekend.
-----

To jnanian, you are correct. Not all are the same, and I have painted a broad stroke. Of course I speak in generalities to trends.

I give an example... (don't want to go crazy in case studies)

A Very Large Company, spent 3 years and over 35 million dollars US to build a computer system that in the end failed and did not work.

Not only was the system late and over budget and (as already mentioned) did not work... it generated hundreds of millions of unnecessary financial transactions that overwhelmed the financial system and had to be turned off. So it was WORSE than simply a system that didn't work because it broke other systems that did.

Now, considering that management made a decision to eliminate local talent with vast experience and background in favor of lower-cost labor from an off-shore source, would one consider this a COST SAVINGS?

Someone sitting in front of a spreadhseet looks at the hourly cost and declares they're saving money but they get nothing for their money. No Value.

Yet no one challenges the development model because everyone KNOWS that offshoring saves money. - MBA mentality

Could have fooled me about a business degree 'cause I'm not sure you'd know a 10-K if it bit you from your comments here.

 

[zsas]

Film is an expendable (to anyone not on Apug); therefore, when it is now baked into the offering (iphone, digi P&S, DSLR, etc.,)...what is the question? Kodak seems to me to be a manufacturer of expendables (film/ink/paper) and thus the problem at hand. Someone posted how Kodak retrofitted a Nikon a few years ago to contain a CCD back in the early days of digi, well, that didnt work, why, the old saying, when you control the board (i.e. make the camera), you make the rules....the consumers (pro/consumer) changed from playing Monopoly (film) to playing Risk (digi) and someone else saw the light (Canon/Nikon/Sony/Apple). Lets just see what happens to Canon/Nikon in a few years when the P&S is coupled with the phone...we saw a glimpse of it today with millions of phones sold with better camera capabilities than most have (not here on Apug though)

 

[waynecrider]

ARRI, Panavision and Aaton have ceased production of film cameras, and they were the big boys.

Panavision made their last Millennium XL in 2009 and Arri moved to building on demand in 2009 from existing stock parts. Aaton's last film camera was the Penelope and they only sold around sixty according to a creativecow interview with Jean-Pierre Beauviala, they are now only interested in the digital Penelope.

The demand for new movie film cameras dried up a few years ago because there are so many good used ones, sitting around at rentals, underutilised at best, unused at worst.

Thanks for that inside info. Interesting. You would expect by their websites everything is available so I guess it's not as expected. Still, AFAIK, recent movies are still being shot on film. You would have to think that with as much usage a film movie camera gets there would have to be a repair service and parts available otherwise there might be nothing but digital production.
What's your take on digital projectors? Is that a bottleneck or are they burning somehow to film?

 

[jrhilton]

Thanks for that inside info. Interesting. You would expect by their websites everything is available so I guess it's not as expected. Still, AFAIK, recent movies are still being shot on film. You would have to think that with as much usage a film movie camera gets there would have to be a repair service and parts available otherwise there might be nothing but digital production.
What's your take on digital projectors? Is that a bottleneck or are they burning somehow to film?

Yep loads of movies are still being shot on film and there are plenty of cameras in rental houses being very well maintained. It is fair to say that the last generation of 35mm movie cameras really were/are great and very well designed and built and will last for years if correctly maintained. Parts shouldn't be too much of a problem as the industry has a long history of canabalising spare cameras when parts finally run out from oem manufacturers or third parties when that time eventually comes.

The tide is turning for the capture side though. Each generation of digital cinema camera is better than the last. One to watch out for is Sony's new F65 at an eye watering $64k. It is 4k resolution at 16bit RAW @ a 19Gbps data rate and has a colour depth which is greater than 35mm colour film and 14 stops of usable dynamic range vs say Kodak Vision3 film which Kodak themselves claim gives up to 13 stops of dynamic range.

But it is the distribution side that consumes the most film and that is where the decreases are happening most of all at the moment. Last data I saw showed there were more than 30,000 digital screens around the world and the conversion is continuing. If you assume a film is 90 minutes long, and each screen shows maybe six different films a year, that is c236 million meters of film no longer being used for release prints. That is a lot of 135 or 120 rolls!

In terms of projectors and feature films, it doesn't matter if something is shot on film or digital, it is all edited digitally these days. Then the edited feature is either burnt to an intermediate negative (usually at 2k resolution to save money and time) and then duplicated traditionally, or distributed digitally to cinemas for projection using a digital projector at either 2k or 4k. In terms of which is best, because most 35mm release prints are only 2k on a postage stamp size frame and possibly several generations from a master combined with projection gate weave, 4k digital projections look sharper, and in many cases 2k can too. There are many other factors but in general I prefer a digital 4k projection to 35mm.

Interestingly all of these are areas where Kodak could have made a lot of money....

 

[Paul Howell]

Sometimes it is just no ones falut, techonolgy and market forces just overtake a company. In hind sight it is easy to say what Kodak should have, could have, may have done, but sometimes nothing will work. I think analog has legs with the smaller folks, Ilford or Forma, maybe even Kodak as a coating company, but in the end lack of new cameras will kill film.

 

[DREW WILEY]

Well, I look at it this way ... when a mfg corp hires someone to run the show who has no background in
that particular industry, I ask, what th...??? One equip mfg I personally did several hundred grand a year with which had been around and big time since the 1930's hired a CEO from a potato chip co,
and he sank the thing in less than a year. I could tell you about a dozen perosnal stories like that from just the last decade. And people wonder why this country doesn't have any job anymore?? I started to
notice how morale was going way down at Kodak well before the current crisis, just from talking to people who worked for them. Sure, folks will get agitated at the thought of layoffs; but this was the
kind of response that comes from bully mgt who just doesn't want to listen. Putting something in the
suggestion box is the equivalent of a resignation. Some CEO's listen to their experience staff and their
customer base, while some are just too important to do that - and the outcome is very predictable.

 

[CGW]

Well, I look at it this way ... when a mfg corp hires someone to run the show who has no background in
that particular industry, I ask, what th...??? One equip mfg I personally did several hundred grand a year with which had been around and big time since the 1930's hired a CEO from a potato chip co,
and he sank the thing in less than a year. I could tell you about a dozen perosnal stories like that from just the last decade. And people wonder why this country doesn't have any job anymore?? I started to
notice how morale was going way down at Kodak well before the current crisis, just from talking to people who worked for them. Sure, folks will get agitated at the thought of layoffs; but this was the
kind of response that comes from bully mgt who just doesn't want to listen. Putting something in the
suggestion box is the equivalent of a resignation. Some CEO's listen to their experience staff and their
customer base, while some are just too important to do that - and the outcome is very predictable.

Some data. Jobs depend on demand:

In 2000, Americans bought 800 million+ rolls of film; by 2011, the bought only 20 million+31 million disposables.

The PMA placed domestic film camera sales at 20 million in 2000;by 2009, sales had dropped to 280,000 with estimates of less than 100,000 in 2011.

http://www.shutterbug.com/content/industry-perspective-closing-end-era

 

[tomalophicon]

An incredible amount of film cameras sold this year. Or does that include disposables?

 

[CGW]

An incredible amount of film cameras sold this year. Or does that include disposables?

Read the post, dude. Single-use cameras are counted as<<wait for it>>rolls of film.

Given the fact the US population is 312 million, I'm not so impressed. Maybe in OZ with just shy of 23 million, the <100,000 sales figure would look more impressive. At any rate, it's an estimate.

 

[Rudeofus]

While the number of new film cameras sold seems to drop fast, the 100.000 estimate differs vastly from the "and no film cameras are made anymore" statements I have read so frequently in this very thread. I'm surprised that so many people actually buy new film cameras these days, since used professional analog gear in all formats can be bought in excellent condition at really low prices.

 

[CGW]

While the number of new film cameras sold seems to drop fast, the 100.000 estimate differs vastly from the "and no film cameras are made anymore" statements I have read so frequently in this very thread. I'm surprised that so many people actually buy new film cameras these days, since used professional analog gear in all formats can be bought in excellent condition at really low prices.

Could be anything considered new that swallows film. No clue how PMA did the survey. People do still buy new Mamiya, Hasselblad, Leica, Voigtlander, Nikon, plus toys and offbrand 35mm SLRs.

 

[DREW WILEY]

Why do some folks think Kodak's gloomy forecast is directly proportional to film sales? That's never been
their only business, at least within my lifetime. And some of the reason new camera sales are way down
is that lots of the old ones are still functioning just fine. If you want repeat sales you need expendables.
Film is an expendable; inkjet supplies are certainly expendable; and a considerable segment of the amateur camera market is also highly expendable - it the toy cameras don't break down, the software
will expire, or something cooler will come along. Some companies evolve sucessfully and some don't.
For all its hype for quite awhile now, and for all its galavanting off in twenty different directions at once,
Kodak hasn't evolved very successfully. That's a mgt problem. It's also an attitude problem. If everyone
is demoralized and infighting, that's a red flag. And you don't gain solid new customers if you've gotten a
reputation for burning bridges behind you and leaving your old loyal customers behind a ditch. These problems go way back. Shifting technology seems to me to be only an ember to start burning down what
was already a big stack of hay just waiting for trouble.

 

[CGW]

Why do some folks think Kodak's gloomy forecast is directly proportional to film sales? That's never been
their only business, at least within my lifetime. And some of the reason new camera sales are way down
is that lots of the old ones are still functioning just fine. If you want repeat sales you need expendables.
Film is an expendable; inkjet supplies are certainly expendable; and a considerable segment of the amateur camera market is also highly expendable - it the toy cameras don't break down, the software
will expire, or something cooler will come along. Some companies evolve sucessfully and some don't.
For all its hype for quite awhile now, and for all its galavanting off in twenty different directions at once,
Kodak hasn't evolved very successfully. That's a mgt problem. It's also an attitude problem. If everyone
is demoralized and infighting, that's a red flag. And you don't gain solid new customers if you've gotten a
reputation for burning bridges behind you and leaving your old loyal customers behind a ditch. These problems go way back. Shifting technology seems to me to be only an ember to start burning down what
was already a big stack of hay just waiting for trouble.

Film sales tanked after 2000--read the numbers. People replaced film cameras with digital cameras and never printed much again. Old cameras weren't being fed film because people stopped using them and coudn't understand buying new ones. Plummeting demand for film and film cameras hurt the film business. Kodak Canada closed in 2005. I wonder why?

I don't believe you work for EK or are privy to its management meetings, so why play like you are?

 

[DREW WILEY]

I've heard about all kinds of major problems at Kodak before the public ever saw a digital camera.
Kodak has been shooting themselves in the foot as far back as disc cameras. Then they lost their black and white paper business, not because of lack of demand, but because of lack of will and consistency on their part. Too big for their own good, with too many neglected stepdaughter divisions. Of course, they've had their bright points meantime. But sooner or later you have to figure out where you came from and who you want to be; and in my experience, once you sever your brand name from what put
you on the map in the first place, it's the beginning of the end. Imagine if Ford decided to no longer make cars and instead wanted to be the world's biggest mfg of waffle irons and golf clubs.

 

[CGW]

I've heard about all kinds of major problems at Kodak before the public ever saw a digital camera.
Kodak has been shooting themselves in the foot as far back as disc cameras. Then they lost their black and white paper business, not because of lack of demand, but because of lack of will and consistency on their part. Too big for their own good, with too many neglected stepdaughter divisions. Of course, they've had their bright points meantime. But sooner or later you have to figure out where you came from and who you want to be; and in my experience, once you sever your brand name from what put
you on the map in the first place, it's the beginning of the end. Imagine if Ford decided to no longer make cars and instead wanted to be the world's biggest mfg of waffle irons and golf clubs.

More 99cent management consulting truisms. Kodak never really stopped being an imaging company, as today's IMAX deal suggests. You're also a bit wide of the mark on Kodak b&w paper--it wasn't selling:

http://www.dpreview.com/news/0506/05061601kodak_bwpaper.asp

 

[tomalophicon]

While the number of new film cameras sold seems to drop fast, the 100.000 estimate differs vastly from the "and no film cameras are made anymore" statements I have read so frequently in this very thread. I'm surprised that so many people actually buy new film cameras these days, since used professional analog gear in all formats can be bought in excellent condition at really low prices.

I bought a new film camera last year. A Voigtlander. I sold it this year, though