Kodak's financial woes

CGW · Oct 4, 2011

clogz said:
Bad news...but it was not the digital revolution -although Kodak made the wrong decisions there- it was most likely stupid management that caused all this. Digi came up....but then downsizing a top heavy management layer is well nigh impossible. It is the blight of our world today. A pity Kodak is not a bank as in that case the tax payer would have been forced to pay for its shaky survival. Let's buy our film and chemicals and paper from companies that know the present-day market and are interested in their products and in their customers.

Hans

With respect, you should look at film sales since 2000 and rethink this. Management/marketing/strategic blunders aside, digital imaging inflicted lasting pain at Kodak. "Companies that know the present-day market" may well decide to abandon it when it comes to film and chemical sales. Sorry but wishful thinking won't change the damage done in the past decade.

Jeff Searust · Oct 4, 2011

Aristophanes said:
Actually, film *is* the segment that may go away.

Actually film is one of the areas in which Kodak makes money. While the Kodak board is perhaps the worst corporate board in the known world, if they were to drop one of the products that actually brought money into the company they would deserve an evil fate.

Aristophanes · Oct 4, 2011

Jeff Searust said:
Actually film is one of the areas in which Kodak makes money. While the Kodak board is perhaps the worst corporate board in the known world, if they were to drop one of the products that actually brought money into the company they would deserve an evil fate.

We don't know that. How Kodak internally cost-shifts and subsidizes is referenced in analyst concerns. What we do know is that Kodak and morin picture film is the make or break, and that cinema is increasingly digital. That's not to say inevitable as the entrenched industry has some advantages.

Still, it is hard to manage any company that loses 90% of it's core biz in a decade. The problem with Kodak is not the choice to be a digital player, but the execution. If there is an asset sale the film unit may not survive outside of a comprehensive Kodak environment of retained and sustained technical knowledge and new capital. Without new capital, they may be forced to shut down film. I am right now involved in an industrial deleverage where a very profitable and newly invested product line is dragged down by another product line so much so that both are likely to perish because of a lac of capital. All the engineers are already leaving the ship. It's very sad.

lensworker · Oct 4, 2011

Jeff Searust said:
Kodak has some issues with the direction they have chosen--- from a film/camera company to a printer company. There are many divisions within Kodak that are still profitable, among them is the film and chemical groups. A restructuring of Kodak that may spin off these parts for us, users of the film and chemistry from Kodak would be the best thing. Kodak also possesses a patent portfolio worth an estimated 3 billion dollars. Spinning this off and selling it is going to produce a one time cash infusion that can keep the rest of the company going through any restructuring--- Just because a company goes through bankruptcy does not mean the products it sells are not going to be available.

Remember For Kodak, the film is the part that WON'T be going away...

Apparently Kodak should have long ago ceded the printer market to Epson and focused on their strengths - film, chemistry and paper and continued their digital sensor and camera technology work.

Instead, it appears that they became obsessed with unseating Epson as the printer king and continued to head butt a brick wall. Not a smart move.

Kodak is now paying for their poor decision making. Poor decision making pretty much equals poor management, or lack of strategic vision and planning at the very minimum.

Going to war with a company who is the world leader in a given market segment in an attempt to steal a chunk of their cash cow looks to be a fool's errand. Common sense should tell a corporation to follow the money - their own money, not another company's money.

JMHO.

Aristophanes · Oct 4, 2011

lensworker said:
Apparently Kodak should have long ago ceded the printer market to Epson and focused on their strengths - film, chemistry and paper and continued their digital sensor and camera technology work.

Instead, it appears that they became obsessed with unseating Epson as the printer king and continued to head butt a brick wall. Not a smart move.

Kodak is now paying for their poor decision making. Poor decision making pretty much equals poor management, or lack of strategic vision and planning at the very minimum.

Going to war with a company who is the world leader in a given market segment in an attempt to steal a chunk of their cash cow looks to be a fool's errand. Common sense should tell a corporation to follow the money - their own money, not another company's money.

JMHO.

But that's the problem.

Their shareholder value was tied up in a revenue stream from film that had been obliterated. Sensors are now dominated by CMOS and by electronics companies: Sony, Canon, Samsung, and Panasonic. Kodak clings to some CCD processes, but with tiny volume. Public companies and sometimes their entire product line can disappear along with share prices.

Film might be profitable if it avoids competition with digital, but the real issue is investor capital. It's vanishing. When it goes, the expertise goes, the technical knowledge, etc. One can hardly blame the management for going digital as that's where the consumer went and 99.99% of the market. Kodak customers overwhelmingly have gone digital. Even for B&W survival of mass manufactured film depends on end product demand. This demand can, in the short term, be met through legacy cameras, but with no new film cameras being made en masse, who will recapitalize a film factory? Hollywood/Bollywood?

I scan tech portfolios looking for any interest in film and camera manufacture and there is no investment interest anywhere. No new cameras in volume = no new film in volume.

cmacd123 · Oct 4, 2011

The other issue is a change in sounsumer habits. 40 years ago, ( when I sold cameras as my first job )the Kodak rep expalined that they did not really try too hard to make money on kodacolor, but that they basically had a stranglehold on the photo finishers. Everything at a commercial lab could and generally did come from Kodak Park (or here in canada from Camera Heights).

This was just at the time that Fuji started selling little green boxes in Canada. And before their was a Noritsu in every mall.

The competition has had both firms running hard to make far better products.

Flash forward and the consumer does not have to depend on the lab to reveal their images, and even worse, they JUST DON'T BOTHER TO MAKE PRINTS. So all that Photofinishing market has gone. and the little that is left is shared with Fuji.

Back then Motion pictures were a small potatoes product line done mainly for the prestige, now they are the major market by square footage for all film. Fuji is neck and neck their too, with an "Eterna" for every "Vision"

Did Kodak make some stratigic blunders, YES! if they had of seen the size of the makrket we know see, one of the plants they demolished might have been the right size. Camera Heights was designed to make 10% of the volume of Kodak park back when Canada was 10% of the size of the US, and was behind a tariff wall. That plant did make any of the products that Kodak makes now. In fact for a while it made almost all of the Motion Picture Negative in North America. It is now a housing development.

bblhed · Oct 4, 2011

Just wondering, while we all know the Kodak name and can probably see a Kodak product from where we are sitting, can anyone tell me the last time they saw a Kodak commercial on TV, not an infomercial, but a regular 30 second spot? I can't remember either. I will say that name recognition will get you quite far, but people knowing your name and people being reminded that you are selling things are two different things.

tomalophicon · Oct 4, 2011

CGW said:
I can understand the widespread denial here but film has been circling the drain for a decade and the spin is dizzying now. Crappy E6 service used to be easy to find around Toronto; now any type of E6 service, especially quality work, is restricted to a couple, maybe 1 lab. Consumer film has all but vanished aside from a few forlorn rolls of Fuji Superia 400. Cheap 35mm C41 processing is dead.There's insufficient demand to prompt pro photo stores to stock much more than what fits inside a small bar fridge.

There's no apparent evidence to suggest b&w has a long-term future--wishful thinking notwithstanding. Harmon/Ilford will probably be the last man standing in b&w but only if demand holds and grows. Some miracle may save Kodak's film production but its dealer/consumer unfriendliness will have to shift to an embrace of a small niche market that loves its products. Who knows?

Toronto isn't anything like Australian towns or cities in that regard. From where I stand, film is very much alive and well.
I visited 3 towns with populations under 4000 over the last fortnight and was able to buy Portra 160 and Ektar in 120 in one town, Tri-x in 35mm in the next, and have 3 rolls of the colour rollfilm processed in under an hour (for 5 bucks a roll) at the next town.
Almost every supermarket sells 3 kinds of consumer film and I have never seen any that is out of date.

I have however, only seen E6 processing available in the larger cities.

Roger Cole · Oct 4, 2011

Wow. All film except consumer C41 35mm is almost impossible to find in Atlanta. I think there's one shop that carries a selection but when I tried to get there via GPS I couldn't find it. It's either moved or has an ambiguous address. Even consumer 35mm C41 is now semi-scarce, and I don't know where people who don't do their own and don't want to mail it out send it. (I mail mine out for now, getting back into color at home soon.)

But, with the Internet especially, if you're going to send it out it matters little whether it's across town or across the country, as long as you aren't in a hurry. If I were in a real hurry I would shoot digital, or black and white and run home and to the darkroom.

Meirronaldi · Oct 4, 2011

I have been away from film photography for a long time only recently wanted to put my 4x5 Sinar to use. It it seemed the only way to get a high quality image file without dropping over 20k. To say the least I was stunned to find out that so much film product was being discontinued. I originally thought i have this highly capable camera and lenses why not buy some film and put it to use. This may prove to be viable for only a short while. But it is not just by Kodak. Fuji also seems to be leaving the film market. Certainly Kodak made some huge gaffs but it seems like a perfect storm of recession, rapid changes of consumer preference, well designed digital cameras etc. All of this combined seems to be dooming film and all kinds of other analog things. Bankruptcy, if it does take place, may free Kodak to make decisions outside the pressure cooker of being a publicly traded company. Being publicly traded comes with a lot of problems. From here on out film will be a highly selective and specialized product for those who make the artistic decision that it is vital to what they want to do. Like hand written letters. Beautiful but no longer practical. General consumers will not return to film with high quality cameras being in every mobile device for free. We can only hope that the products we want will remain available

tomalophicon · Oct 4, 2011

railwayman3 said:
I hope you're right, of course...and I'm sure that B&W will still be available for many years. I'm not so optimistic about color film, particularly transparency and the availability of reasonable quick and affordable processing for E6.

(And I'm not sure that recording tape and cassettes are a totally comparable product...thin film coating on plastic, etc., is a mature technology and relatively simple(thinking of sticky tape, etc.!), but photo film demands further complex stages in the production of the different types and speeds of emulsions, plus the specialist chemicals needed, coating and cutting in a controlled dark environment, and all the complications of packing and distribution to a small market.)

I remember also when there was a vast range of cassette tapes to suit every need...the only ones now seem to be the basic ferric setting of just one length...

Railwayman, I do agree that the two media are not easy to compare. I was merely stating that such a niche product is still being made and is in high demand, in a world where it would seem impractical to use it. But tape users, like us, understand that there is something special about these technologies, and are not prepared to let them go the way of the Dodo.

hoffy · Oct 4, 2011

Aristophanes said:
But that's the problem.

Their shareholder value was tied up in a revenue stream from film that had been obliterated. Sensors are now dominated by CMOS and by electronics companies: Sony, Canon, Samsung, and Panasonic. Kodak clings to some CCD processes, but with tiny volume. Public companies and sometimes their entire product line can disappear along with share prices.

Film might be profitable if it avoids competition with digital, but the real issue is investor capital. It's vanishing. When it goes, the expertise goes, the technical knowledge, etc. One can hardly blame the management for going digital as that's where the consumer went and 99.99% of the market. Kodak customers overwhelmingly have gone digital. Even for B&W survival of mass manufactured film depends on end product demand. This demand can, in the short term, be met through legacy cameras, but with no new film cameras being made en masse, who will recapitalize a film factory? Hollywood/Bollywood?

I scan tech portfolios looking for any interest in film and camera manufacture and there is no investment interest anywhere. No new cameras in volume = no new film in volume.

Excellent reply. When I started my film re-birth, in my own mind I knew that the biggest limiting factors would be new cameras. Yes, as has been argued many times before on this forum, there is a mountain of cameras for sale on any auction/swap/sell site, but this is a finite resource. What happens in 10 years time when all the bones have been picked dry and there is nothing worthwhile left (Kind of like trying to build a hotrod today out of a early 1930's Ford.....the problem is its a bit hard to buy a fibre glass shell for a Nikon FN). Who in their right mind would want to invest in film at a corporate or big business level?

Anyhow, just a bit of side information from a recent tour I took. My Photography club was invited to look through a Professional Photo finishing shop. They had printing equipment from both Kodak (optical - LED) and Epson(Inkjet) on site. The owner loves the Kodak equipment, but hates the Epson. Why? Even though the Kodak equipment was >10 year old (I can't 100% remember how old it was), Kodak still offered support for it and repaired it as needed through an on going maintenance plan. The Kodak equipment was start of the art when new, but still held it own now (seriously, how much better can you get when it comes to optical printing?). Compared this to the Epson. He had to purchase this outright. They offered no maintenance plans and when ever it needed repairing, was given the hard sell to buy something better(?) and newer. In the time he had the Kodak machine, he had been through numerous inkjet printers.

Maybe this is and was Kodak's problem? The products and the service they offered was too good, which in turn means no sales of new equipment?

anorth · Oct 4, 2011

I think Kodak should take up ilforld latest trick by selling 4x5 pinhole cameras with film included in the box, for more info http://www.ilfordphoto.com/products/product.asp?n=75&t=Photo+Accessories+&+Equipment

anorth · Oct 4, 2011

I like to see a 8x10 model

tomalophicon · Oct 4, 2011

Hoffy, there is a boatload of new film cameras being made. You won't find them in Harvey Norman though

Roger Cole · Oct 5, 2011

tomalophicon said:
Hoffy, there is a boatload of new film cameras being made. You won't find them in Harvey Norman though

Where are they? Other than craptastic Holgas, Dianas etc. and some pinhole models, there are maybe one or two 35mm SLRs, some disposable cameras still made I think and...what else?

hoffy · Oct 5, 2011

Roger Cole said:
Where are they? Other than craptastic Holgas, Dianas etc. and some pinhole models, there are maybe one or two 35mm SLRs, some disposable cameras still made I think and...what else?

Tomalophicon actually is right, to a degree. If do look into, there are new rangefinders and large formats out there. But, as for the mainstay of film being 35mm SLR's, they are very much lacking

Ken Nadvornick · Oct 5, 2011

Roger Cole said:
But, with the Internet especially, if you're going to send it out it matters little whether it's across town or across the country, as long as you aren't in a hurry. If I were in a real hurry I would shoot digital, or black and white and run home and to the darkroom.

I dunno, Roger...

Two Thursdays ago I dropped into Glazer's in Seattle and picked up three rolls of in-date 35mm Provia 400X for less than B&H asks online. Then two Saturdays ago I used two of those rolls at an airshow at Paine Field up in Everett.

The following Monday at exactly 5:00pm I mailed those two rolls to Dwayne's Photo in Parsons, Kansas, the old Kodachrome place. Exactly 43 hours later, at 12:00pm on the following Friday, the postman handed me my finished slides.

Tough to argue with that. Seattle is a long way from Parsons. I'm still not sure how Dwayne's even did it. I've got exposed b&w negatives awaiting my darkroom processing from a lot further back than 43 hours.

And for the record, the slides were neat, clean, and perfectly processed and mounted...

Ken

tomalophicon · Oct 5, 2011

Roger Cole said:
Where are they? Other than craptastic Holgas, Dianas etc. and some pinhole models, there are maybe one or two 35mm SLRs, some disposable cameras still made I think and...what else?

There's a large list on this thread
(there was a url link here which no longer exists)

OzJohn · Oct 5, 2011

I think Tomalophicon may have stumbled upon a rare oasis of film availability but as a fellow Aussie I have seen very little evidence of widespread availability of these products. I live in a Qld town of about 13000 and I've just checked out the local supermarkets. We have both Coles (they carry no film) and Woolies have 5 single packs of Fuji Superia200/24 plus a few disposables. No pharmacy in town still keeps film. The one remaining minilab has Kodacolor 200 and 400 as well as disposables and a few rolls of that horrible C41 black & white film that Kodak currently makes. The minlab develops C41 one day a week. This is not a town in decline either - it has increased its population by 20% in the past 5 years.

I can think of only one outlet within 100km of me where I might be able to buy a roll of pro film such as Portra or any Ilford product and only about three places in the state capital Brisbane. Sad fact is almost nobody wants it anymore and that is not likely to change. I think we'll be able to buy B&W materials for a long time yet as long as we are prepared to pay the price but I equally think colour film is a goner. But, if things really become desperate, remember it must be a hell of a lot easier to coat B&W on the kitchen table than trying to make Kodachrome in the garden shed! OzJohn

Roger Cole · Oct 5, 2011

As a devoted 4x5 shooter I should have included the LF offerings, but those won't keep film alive if all you have are a few of us view camera nuts.

I use Dwaynes too but it usually takes a couple of WEEKS and I'm not much farther than you. I mailed some on Sunday so they went out on Monday morning, one package of 35mm E6 and one of 120 C41. I will try to remember to check in here when they arrive.

I don't mind the delay but many people with modern (i.e. short) attention spans often do.

I envy you in Seattle then. If there is comparable film availability in the Atlanta area I don't know where it is. I order ALL my film. I was used to this in the old days anyway as I lived in a small town and even in the 90s a good selection aside from 35mm C41 was hard to find so I was already used to ordering film.

lxdude · Oct 5, 2011

Aristophanes said:
How Kodak internally cost-shifts and subsidizes is referenced in analyst concerns.

Look at quarterly reports over the past several years, and you will see that any profit was on the film side. Digital has been a consistent money loser.

Steve Smith · Oct 5, 2011

Before the likes of Kodak came along and turned photography into a consumer led, mass produced industry, it was solely a DIY activity. I don't think it will ever go back that level but even if it did, that's not the end of photography - just a lot more work for those of us who want to continue!

Steve.

tomalophicon · Oct 5, 2011

OzJohn said:
I think Tomalophicon may have stumbled upon a rare oasis of film availability but as a fellow Aussie I have seen very little evidence of widespread availability of these products. I live in a Qld town of about 13000 and I've just checked out the local supermarkets. We have both Coles (they carry no film) and Woolies have 5 single packs of Fuji Superia200/24 plus a few disposables. No pharmacy in town still keeps film. The one remaining minilab has Kodacolor 200 and 400 as well as disposables and a few rolls of that horrible C41 black & white film that Kodak currently makes. The minlab develops C41 one day a week. This is not a town in decline either - it has increased its population by 20% in the past 5 years.

I can think of only one outlet within 100km of me where I might be able to buy a roll of pro film such as Portra or any Ilford product and only about three places in the state capital Brisbane. Sad fact is almost nobody wants it anymore and that is not likely to change. I think we'll be able to buy B&W materials for a long time yet as long as we are prepared to pay the price but I equally think colour film is a goner. But, if things really become desperate, remember it must be a hell of a lot easier to coat B&W on the kitchen table than trying to make Kodachrome in the garden shed! OzJohn

That's unfortunate for you. Maybe your supermarkets have die-hard digital store managers.

I have k-mart, Big-W, Coles, Woolies and all of them sell a respectable offering of film and disposables. The population is around 25,000.

hpulley · Oct 5, 2011

Roger Cole said:
...
I use Dwaynes too but it usually takes a couple of WEEKS and I'm not much farther than you. I mailed some on Sunday so they went out on Monday morning, one package of 35mm E6 and one of 120 C41. I will try to remember to check in here when they arrive.

I don't mind the delay but many people with modern (i.e. short) attention spans often do.
...

I processed film long ago but stopped when labs got so convenient. While labs around here offered same day service, even same hour or same morning I didn't bother developing anything myself, I just dropped the film off before work or at lunch and picked it up at lunch or after work, sometimes shooting another roll before I went there so I was often picking up and dropping off at the same time, usually something every day and always something a few times a week. For most things, their print services were good enough too if I didn't mind cropping after the fact.

But a few years ago it went from hourly and same day to perhaps the next day, then perhaps the next week and the quality went downhill too (chemicals not being replenished as often I suspect). So I did what I hadn't done for decades: I went back to developing it myself. Now I have results drying in less than half an hour for film or prints and I have full control again. Makes me wonder why I ever used labs but they sure are convenient and let you have more time for everything else.

I can process films for under a dollar a roll myself so it is way cheaper until I factor in my own time which is 'free' of course but there are other things I could be doing.

I never liked mail away which is why I was (boo, hiss) always more of an E6 fan than K14. Nothing like one hour slide service! Once E6 went to send away I stopped shooting slides. Now I prefer negatives anyways as they're easier to print (no one wants to see my slide shows anymore).

Kodak's financial woes

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