Kodak Files for Bankruptcy Protection 1/18/2012

[Photo Engineer]

Capitalism and Democracy can both be very short sighted!

What else is new?

PE

 

[Aristophanes]

In "Super Capitalism" Robert Reich talks about the decline of Corporate heads as Stewards of the Nation and the rise of the purely profit-driven corporation. You're right, it's a terrible weakness in the system. I'm convinced that there is enough market demand for film to support two bigger (in film) players. But Kodak is huge; the market that a Kodak needs is never coming back. About a smaller coating plant? Well I don't know, but nobody else here does either. We're just working our jaws while it plays out.

The weakness is assuming that most capital structures are publicly traded. Less than 5% of all wealth is tied up in securities, less than 10% in traded paper financials.

Yet we are all supposed to get rich and supplement our non-growing incomes as an investor class.

Companies like Kodak cannot shrink if their market does because everyone has piled into the expectation of growth from what is really a small segment of the world's economy.

I foresee the entire film coating sector to be less than $150 million in 7 years. I foresee none in 10 unless someone starts making cameras to put that film into. Film is parasitical. It needs a host camera. eBay salvage is not a viable market for capital investment of even $150 million.

 

[Aristophanes]

Because on coating machine can coat more film in one hour than one lab can handle in one year?

An exaggeration, I am sure, but a good trial example to show the error of your idea. You see, the coating machine is up to 70+ inches (2 meters) wide which is split down into strands of film. It runs at thousands of feed per minute (thousands of meters too for that matter). So, one coating machine can ALWAYS outstrip one processing machine.

PE

Oh, I understand the oversupply issue.

You'll need a bigger lab.

But if the market is returning toper unit consumption levels of 1899....and they did it then...?

 

[kb3lms]

Kodak needs to advertise pictures - pictures on paper you can handle, look at and re-live the memory. They did this for a hundred years and then gave up. But get people to want pictures again and keep your paper operations up and running and profitable. (I'm not saying they aren't, just keep it that way and increase demand.) Paper handles film and digital so you address everyone. Keep the consumable flowing.

Then they need to go through a 130 years of film technology and find the niche cases that film handles well and digital doesn't. Advertise the hell out of them and make people want that. Teenage girls aren't going to buy film to take pictures of their friends. They have cell phones for that. The niche is to find what the cell phone doesn't do. It's there.

Marketing and advertising is the art and science of creating demand. Any successful business centers on delivering things that people need but cannot or do not want to do or make themselves. Nobody needs you for things your pet hamster can do. Work those niche markets like car companies work the sports car market. Nobody needs a Corvette but there are sure a lot of people that want one. Demand can be created. Nothing needs to be invented here, it's just marketing. Remember all those Kodak commercials of years gone by that made you want to get out the camera and take a picture right that moment? I haven't seen a Kodak ad in years. They did this well for a hundred years and then walked away. Dumb, dumb, dumb.

I think everybody in the business, and especially Kodak, underestimates the pain-in-the-ass that many, many people consider trying to do something with their computer to be. The slogan "You press the button, we do the rest" worked a hundred years ago and it will work today if you can market it and show the value. You have to make it convenient and cheap enough that people will use it. I firmly believe that whosoever successfully re-invents the output business will own the market.

Here's a thought: set up a "Kodak" store like an "Apple" store. A place where you can go in and Kodak will set you up with a camera or printer, conduct photo lessons, fix your photo problems, whatever. Digital or Film - do it all. Maybe even partner with Apple. The two companies got along very well at one time. License it through their dealers (to keep them in the revenue stream) and re-invent the brand. They already own the brand awareness and thats probably half the battle. Apple makes a mint off the iPhone and nobody actually needs it.

I sure hope they do read this thread and take some of our ideas seriously. There's a world out there that only wishes the best for Kodak.

 

[Papa Tango]

Kodak needs to advertise pictures - pictures on paper you can handle, look at and re-live the memory. They did this for a hundred years and then gave up. But get people to want pictures again and keep your paper operations up and running and profitable. (I'm not saying they aren't, just keep it that way and increase demand.) Paper handles film and digital so you address everyone. Keep the consumable flowing.

We have several generations out there now that do not care. Image quality? The scaled down and mediocre rubbish that is posted to FarceBook and Flikr is fine with them. It's all about memory prodding and fast circulation. I do see some "printing" their thumb drive or MC contents at the Kodak kiosks. But I seriously doubt that we will return as a society to one that appreciates the value of "the print" for general photography. The new Brownie is the Smartphone...

 

[clayne]

We have several generations out there now that do not care. Image quality? The scaled down and mediocre rubbish that is posted to FarceBook and Flikr is fine with them. It's all about memory prodding and fast circulation. I do see some "printing" their thumb drive or MC contents at the Kodak kiosks. But I seriously doubt that we will return as a society to one that appreciates the value of "the print" for general photography. The new Brownie is the Smartphone...

As I said before, I don't think photography is treated with the same respect it used to be.

Reasons:

1. Dime a dozen crap photography pumped out with little to no cost, direct to digital.
2. Over-consumptive society less interested in taking the time to view, which leads to...
3. All time-low attention-span of the masses where "images" are just consumed and quickly passed over after viewing, on to the next twitch...

 

[Wayne]

But I seriously doubt that we will return as a society to one that appreciates the value of "the print" for general photography.

And yet, making that happen even in a small way seems like the only chance Kodak has. Morphing into a successful digital competitor with an oh-by-the-way-we-make-film-too department seems way beyond hopeless.

 

[PHOTOTONE]

Kodak has in the past protected its dealers, by not selling direct, unless you were a processing lab over a certain volume. This local sales of film is gone, gone, gone, and a new model needs to be promoted and advertised to sell film. (not movie film, but still film). We willl never have smaller local photo stores risking their dollars stocking film. Never again. But..we can see film being sold with advertising and direct sales.

 

[Wayne]

This local sales of film is gone, gone, gone, and a new model needs to be promoted and advertised to sell film. (not movie film, but still film). We willl never have smaller local photo stores risking their dollars stocking film. Never again.

My small local photo store (population 85,000) stocks film and processes film, and says there is still a lot of demand for some films-Tri-x for the old users, HP5 for college students. They stock a couple others too (unfortunately no FP4) . The store itself is about 1/4 the size it used to be though.

 

[kb3lms]

I've got to think even the "real" digicam manufacturers have got to be taking a serious hit over having cameras in cell phones. Especially with most of the population not caring one bit about image quality.

The part about getting the general population to value real pictures on paper again (aka snapshots) is all about creating demand. It can be done.

Yeah, the teenagers will continue to put everything on facebook straight from the phone. My own kids have nice digital cameras and they use their phones almost exclusively. (Unless they take out one of the film cameras - which they seem to be doing more and more lately.)

It will be the adults that would want a little more permanence, especially as they get older. That's your target market. They also happen to be the people with money. (I'm not talking about the elderly - I mean middle age people) Facebook's day will pass and then where will all those pictures be? How do I get the baby pictures back after the facebook account is long gone and my M$ junk PC crapped out 5 years ago with no backup? How many people do you really think make regular backups? Lot's of people have shoeboxes full of pictures (or better yet negatives) that can be scanned all over again and posted to the next wonder website. But you can't post what you haven't got.

One of my soccer friends told me about a real problem that they had a few months ago. The kid (5th grade) needed to have baby and child pictures for a timeline as part of an autobiography project. (You know where this is going) They couldn't figure out which memory card they were on OR it was long ago erased. Now what do you do? There weren't any pictures. Oops! They weren't the only ones in that class.

 

[hoffy]

To a degree, this is already happening in Australia, but its not being led by Kodak. One of the bigger retailers heavily promotes its 9c prints (6x4, from Digital media only....doesn't that kill ya).

And here's the thing. You go into there stores and you will see rows and rows of consoles.....all Fuji Crystal Archive. As a matter of fact, in every facility that I go to except for 1, its all Fuji Crystal archive.

 

[OzJohn]

To a degree, this is already happening in Australia, but its not being led by Kodak. One of the bigger retailers heavily promotes its 9c prints (6x4, from Digital media only....doesn't that kill ya).
And here's the thing. You go into there stores and you will see rows and rows of consoles.....all Fuji Crystal Archive. As a matter of fact, in every facility that I go to except for 1, its all Fuji Crystal archive.

It's fairly well known here in Oz that the reason Fuji has such a stranglehold on the consumer printing business is that they have reduced the material costs to a few big retailers (eg HN and BigW) to a point that Kodak won't or can't afford to match. Kodak Express stores here are going out of business weekly but so are smaller independent Fuji outlets that don't get the benefit of the keen prices (particularly on paper). I don't expect that Fuji's strategy has only been deployed in Australia either but that's how business operates in the free world.

If 24 sq inches of processed RA4 material can be retailed for 9 cents even at minimal or no profit, the stuff must be bloody cheap to make and must have the potential for a significant future price rise thus giving hope that someone will keep making it for many years to come. IMO RA4 is still the best material on which to print colour photos irrespective of how they were originated. OzJohn

 

[zsas]

Interesting...

"Kodak Wants Out of Contract at Kodak Theatre"
http://www.13wham.com/mostpopular/story/kodak-theatre/4ThfMz4NyUSCAkkzH2njYA.cspx

 

[zsas]

So per the above ""Kodak is proud of its important role in the Entertainment industry, and our long standing relationship with film makers. Our motion today reflects our commitment to ensure that we are maximizing value for our entertainment customers, creditors and other stakeholders," the company said in a statement."

So they made the determination that they are not "ensure that we are maximizing value" to the film industry by advertising their connection with film making?

 

[fotch]

Its what you do to survive. Cut cost, try to make a profit. The contract ends in 2013 anyway. They should also look at some of the cost of the top management and do the same.

"any benefit related to these rights likely does not exceed or equal the Debtors’ costs associated with the Contract."
"expiration of its contract with the theater owner after the 2013 season."

 

[zsas]

I just see this as a symbolic contract term is all. I am sure they will market in other more meaningful areas that more affect their bottom line (ie commercial B2B marketing - trade shows, etc)

This removal of their name is in essence removing their commitment to the motion pic industry (in spirit). See what I mean? Yeah the motion pic industry has changed too, so it was coming, just kind of sad is all I lament

Would be real interesting if Fuji comes in and buys the rights...

 

[Photo Engineer]

Kodak has not really been "marketing" in any appropriate area as far as I can see. The only thing I have seen from Kodak lately is a letter from its lawyer reminding us of the terms of the bankruptcy and what it might mean to our pension and benefits plans and a second note from Kodak reminding us of the same and telling us what parts would stop immediately. Of course those notes may as well have been in some alien language for all we could understand them. But wait! They were! It is called "legalese" with plenty of words such as may, might could, perhaps and the big one "wait and see". It is the rest of the gobbledegook that renders it meaningless.

In the words of "The King", "I'm waitin, o yes indeed" etc....

PE

 

[CGW]

Kodak has not really been "marketing" in any appropriate area as far as I can see. The only thing I have seen from Kodak lately is a letter from its lawyer reminding us of the terms of the bankruptcy and what it might mean to our pension and benefits plans and a second note from Kodak reminding us of the same and telling us what parts would stop immediately. Of course those notes may as well have been in some alien language for all we could understand them. But wait! They were! It is called "legalese" with plenty of words such as may, might could, perhaps and the big one "wait and see". It is the rest of the gobbledegook that renders it meaningless.

In the words of "The King", "I'm waitin, o yes indeed" etc....

PE

Were Kodak workers unionized?

 

[Photo Engineer]

Kodak was one of the largest non-union companies in the US. It worked for over 100 years.

I should be clear about this as well. The Steelworker's union killed the steel industry in Pittsburgh! I have seen workers go for 6 months on strike for $0.50 / hour raise and they were never able to recoup their 6 months of lost wages, but they thought they had a win. The 13 week vacation was a real killer for USSteel.

PE

 

[Tim Gray]

Kodak has not really been "marketing" in any appropriate area as far as I can see.

I saw a big back cover ad from Kodak on a magazine targeted towards cinematographers just last month.

 

[CGW]

Kodak was one of the largest non-union companies in the US. It worked for over 100 years.

I should be clear about this as well. The Steelworker's union killed the steel industry in Pittsburgh! I have seen workers go for 6 months on strike for $0.50 / hour raise and they were never able to recoup their 6 months of lost wages, but they thought they had a win. The 13 week vacation was a real killer for USSteel.

PE

I guess paternalism has its downsides, too.

 

[tomalophicon]

Dang 13 weeks would be heaven.

 

[cmacd123]

So per the above ""Our motion today reflects our commitment to ensure that we are maximizing value for our entertainment customers, creditors and other stakeholders," the company said in a statement."

So they made the determination that they are not "ensure that we are maximizing value" to the film industry by advertising their connection with film making?

One line in the story mentions that the OSCAR folks (AMPAS) is uneasy about the OSCAR night happening at a theatre named after a now Bankrupt company. The TV coverage would have to mention the Kodak Name, and OSCAR folks might not be happy to do that. If they can kill the contract, the theatre could be called something else by Oscar night.

 

[cmacd123]

I saw a big back cover ad from Kodak on a magazine targeted towards cinematographers just last month.

One of my habits to to read "American Cinematographer regularly. Every issue for the last couple of years has had at least one ad (usually the back cover) with a famous cinematographer talking about why they like to use film. The ads refer back to a full interview on teh Kodak website. Often there is also another ad inside about the latest "Vision" stock and or another plea to "shoot Film". Fuji had been also ramping up on the film theme, although they have slowed down this fall. They were up to about 6 colour pages around teh time that "The Black Swan" came out having been shot on Fuji Eterna 16mm film.

While still shooters were not seeing Kodak ads, They were (quite rightly) advertising stongly to a market where it would mater, with the message that if you care about your cinematography, you will do it with film and not digital, and you can find information on our web site that you can use to talk to the producer to explain that film is not really more expensive to use than Digital.

 

[Photo Engineer]

You also have to sell film to the Pro still photographers and to the general public.

PE