Kodak's financial woes

[Aristophanes]

Like I said, go digging on the CIPA site. I did.

I don't think things went better for other makers than it did for Nikon:

http://www.nytimes.com/2006/01/12/technology/12nikon.html

It sounds like Kodak dumped film cameras before Nikon.

If Kodak goes into bankruptcy, the future of it's film production is entirely at risk because the # of cameras under manufacture to serve as a vehicle for the film product is too small now to even warrant data collection.

Film sales are now entirely dependent on legacy cameras which are subject to physical depreciation and exit from the market. Therefore the film supply must dwindle correspondingly. Even if current film sales are OK, the medium and long-term prospects are a problem for any entity purchasing the film manufacturing segment. This is reflected in the stock price. Even Ilford is subject this problem. Kodak's financial freefall, and Fuji's huge pullback both signal an inability to properly capitalize the market.

For roll film to survive what is required is:

Camera manufacture in a variety of known design types.

Labs that offer traditional services plus scanning, all affordably. Rationalization through mail order may actually improve the quality/cost ratio. Tie-ins to social media and improved "retronomics" marketing are required. The original Kodak slogan of "You push the button, we'll do the rest" is prescient and ironic. That's where film is today.

The manufacture of scanners and lab equipment. For the tiny % of people who home develop, the continued manufacture of enlargers, parts, etc. There is probably not enough home darkroom demand to sustain any roll film industry, so lab services are essential to broaden the market.

Papers, chemicals, and so on should not be a problem. Nor should distribution. The film industry would be so small that storefronts can be Internet based. Think ham radio, audiophile, telescopes.......

This is all sunk cost stuff.

 

[DREW WILEY]

Sometimes bankrupty is the best thing that can happen in a scenario like this, because there are always
investment groups looking for a bargain and willing to rethink what went wrong in the first place. Best of
all, it is sometimes the only way of purging out the old mgt. But it's always a roll of the dice. The new
mgt might be worse. Publicly traded corps are highly subject to the willy-nilly winds of media hype, which in the case of film becomes a self-fulfilling prophecy, not because the foreseen demand for film
is no longer actually profitable, but because investors are basically speculators looking for a quick buck,
and frequently don't even understand the nature of the business they're putting their money into (or that some mindless computer is automatically doing for them). A more tightly-held rearrangement could
in theory buffer out some of this nonsense and still hold toghether Kodak's viable divisions, while ridding
them of the hopeless ones. Unfortunatley, the last people they'd ever sell their film patents to would be
Fuji, and Fuji is the only competitor at this point in a position to make high-quality color films and papers.

 

[DREW WILEY]

PE - for once I've got to slightly disagree with you. As once a heavy 35mm film user, prior to converting
to large format, I personally stopped using Kodachrome once they spun off the development to Kodalux
and the processing got horrible. I heard the same story from other photographers, over and over. Then
when the silver bullet of 120 Kodachrome came along, the processing disappeared almost as fast. It's a
matter of reliablilty. Kodak repeatedly burned their own reputation among pros. They wiggle their little toe into the water and then pull it out if the temperature isn't just right. Typical of corporations that are
just too big to manage properly and treat their minor divisions like unwanted stepchildren. I had friends
who were put out of businesses a lab owners because they signed onto extremely expensive service
contracts for scanners etc, then found out that just when they needed the service, Kodak had pulled
out and left them high and dry. But even for a small fry like me back then, spending a week in the wilderness and then seeing a big scratch all across your roll of Kodachrome didn't inspire confidence.

 

[CGW]

PE - for once I've got to slightly disagree with you. As once a heavy 35mm film user, prior to converting
to large format, I personally stopped using Kodachrome once they spun off the development to Kodalux
and the processing got horrible. I heard the same story from other photographers, over and over. Then
when the silver bullet of 120 Kodachrome came along, the processing disappeared almost as fast. It's a
matter of reliablilty. Kodak repeatedly burned their own reputation among pros. They wiggle their little toe into the water and then pull it out if the temperature isn't just right. Typical of corporations that are
just too big to manage properly and treat their minor divisions like unwanted stepchildren. I had friends
who were put out of businesses a lab owners because they signed onto extremely expensive service
contracts for scanners etc, then found out that just when they needed the service, Kodak had pulled
out and left them high and dry. But even for a small fry like me back then, spending a week in the wilderness and then seeing a big scratch all across your roll of Kodachrome didn't inspire confidence.

Pros stopped using Kodachrome in droves by the mid 90s when Velvia knocked it off photo editors' light tables. Processing quality was beside the point. Kodak bought some time with the revised Ektachromes but by 7-9 years ago the same pros dropped E6 materials for digital. There were lots of lab options besides Kodak. The accelerating collapse of film sales after about 2001 was unstoppable and had little to do with Kodak's management.

 

[Photo Engineer]

Ummm, Drew, did you forget the Consent Decree by the US government?

With that decree, Kodak could no longer sell Kodachrome with processing included, and they were forced to sell processing chemicals to others. So, what happened? Customers went for the cheaper processing and got the associated quality. It took a few years, but that is what happened. Same thing for E6 and C41 processing, but there the results were resoundingly better due to the simplicity of the processes.

So, again, you have outside parties and the government which caused the decline in Kodachrome processing quality.

PE

 

[railwayman3]

Ummm, Drew, did you forget the Consent Decree by the US government?

With that decree, Kodak could no longer sell Kodachrome with processing included, and they were forced to sell processing chemicals to others. So, what happened? Customers went for the cheaper processing and got the associated quality. It took a few years, but that is what happened. Same thing for E6 and C41 processing, but there the results were resoundingly better due to the simplicity of the processes.

So, again, you have outside parties and the government which caused the decline in Kodachrome processing quality.

PE

Here in the UK Kodachrome was always sold "Processing Paid by Kodak"...and was always processed by Kodak themselves at "P.O. Box 14, Hemel Hempstead, Herts".

In the 70's -90's, the processing went to pieces, scratches, random blue spots,
frames burnt by the heat-sealing of the card mounts, and dozens of amateur photographers deserted Kodachrome in despair, myself included.

I went on a once-in-a-lifetime holiday to the Far East and Australia in 1994, using what I thought was the flagship films from the top manufacturer...K25 and K64...about 25% of the frames were unusable through Kodak's own crappy processing. Believe me, a free replacement film and a pro-forma apology letter doesn't put that right! Sorry, I admire your understandable loyalty, but you can't blame that on anyone other than the Almighty Kodak!

I finally went back to Kodachrome in the last year...and found a tiny firm called Dwaynes who knocked spots off Kodak for Quality Control.

 

[Photo Engineer]

Hmmm, that would be the plant at Harrow.

I know what prevailed here in the US. I cannot explain what happened in the UK.

I do know that the evening news on NBS today is going to run a segment on Kodak according to local news. I look forward to what they say. And, based on a lot of factors, I have little loyalty left. I feel more betrayed than anything else, by the BOD of Kodak along with top management. I share the opinion of many Kodakers and ex Kodakers in this. I merely try to report what I know here and I was aware of US process problems and the reasons behind some of it. I did not know of the UK problem.

Sorry.

PE

 

[railwayman3]

I do see and understand that what you say about the Consent Decree and the independent labs in the US....independent (non-Kodachrome) processing here in the UK also certainly left a lot to be desired at times!

It's all ancient history now, but I do remember. from my Father, and also personally, the frustration which resulted in many amateurs "trying out" other makes, even though, arguably, Kodachrome had the final edge on quality over the other films available at that time. Something slipped somewhere, which should not have happened with the flagship product....I also recall actually feeling quite sad that the obvious quality of research and manufacture of the film was being let down by nothing more than careless processing.

Anyway, I've just had back my E6 (Kodak films) from a holiday last month, and they're great (well, technically at least! They're not great art, just mostly family memories!). But, they make digital shots taken at the same time look totally shabby.

 

[DREW WILEY]

Thanks for that tidbit of relevant information. But merely not allowing Kodak not to sell preprocessing with Kodachrome film would not seem to be a reason for not processing it at all, and spinning it off to someone else. As far as Velvia knocking them off the block or off the lightbox, that was well after the
Kodalux fiasco. E6-films at the time were hardly up to par, though the processing simplification was of
course desirable for independent labs. Velvia was difficult to print and difficult to scan from (still is in
some ways), so that explanation falls a bit short. Kinda like all the theories of why the mammoths and
mastodons started dying off around the end of the ice age - might have been the cumulative effect of
several different factors. I'd still be using Kodachrome if it was around. Looked at some 5x7 Kodachromes
last year and must say, even back then it had a look that would make E6 films today envious. Now I'm
banking on Ektar (and my freezer, just in case).

 

[Marvin]

Kodak on NBC news tonight.http://www.msnbc.msn.com/id/44888892

 

[CGW]

Thanks for that tidbit of relevant information. But merely not allowing Kodak not to sell preprocessing with Kodachrome film would not seem to be a reason for not processing it at all, and spinning it off to someone else. As far as Velvia knocking them off the block or off the lightbox, that was well after the
Kodalux fiasco. E6-films at the time were hardly up to par, though the processing simplification was of
course desirable for independent labs. Velvia was difficult to print and difficult to scan from (still is in
some ways), so that explanation falls a bit short. Kinda like all the theories of why the mammoths and
mastodons started dying off around the end of the ice age - might have been the cumulative effect of
several different factors. I'd still be using Kodachrome if it was around. Looked at some 5x7 Kodachromes
last year and must say, even back then it had a look that would make E6 films today envious. Now I'm
banking on Ektar (and my freezer, just in case).

Kodachrome was already circling the drain by the mid-90s. Commercial photographers liked Velvia because photo editors bought work shot on it. What's not to get? The publishing industry quickly adapted to these new materials and new hybrid/digital workflow and never looked back. FYI, Kodachrome wasn't exactly scanner-friendly compared to the vastly better E6 materials that started hitting the market in the 90s.

 

[Aristophanes]

Kodak on NBC news tonight.http://www.msnbc.msn.com/id/44888892

The ink supply termination is a sign that someone is not getting paid. The means some sort of restructuring, likely overseen by the court, is imminent.

 

[Photo Engineer]

There were many reasons for the death of Kodachrome and for the lack of health at EK. One could not list them all here even if they knew them all. You would wear out your keyboard.

Fisher is quoted as saying something to the effect that he could not cure Kodak's ills in a dozen lifetimes.

PE

 

[OzJohn]

I had a look at the NBC link that Marvin posted above. I have a keen interest in the history of photography and obviously Kodak is one of the biggest players in that story. I doubt that our networks here in Oz will pick up this story since Kodak is no longer newsworthy here having closed and demolished their factory in Melbourne about 2006 (same deal as Toronto). If anybody has a web link to the televised segment could you please post it?

I don't pretend to understand either the pension or healthcare systems in the US but I do appreciate that access to both is an important part of salary packages and retirement planning. I feel for those Kodak employees who may have to pay a very high price if everything goes pear-shaped - here's hoping some solution will be found amongst the corporate mess. OzJohn

 

[Marvin]

There was a video at that link yesterday but I don't think it is available now.
Marvin

 

[lxdude]

The ink supply termination is a sign that someone is not getting paid. The means some sort of restructuring, likely overseen by the court, is imminent.

That's not the only possible explanation. For example, they could be worried that a bankruptcy is upcoming and don't want to be entangled in it. Note that the contract is for commercial printers, not the ones sold to the general public. Without knowing the terms and conditions of the contract I think it unwise to assume an action always means only one thing. Your statement is speculation, not fact.

 

[Photo Engineer]

With no information on the ink company, I can say that local news reported that the ink company was alleged to have breached their contract. The reasons were not given.

Also, many companies who were buying large Kodak printers for the printing industry have suspended purchases due to doubt of Kodak's sustained presence in that market. This (like the comments here on APUG about going to Ilford or Fuji products) is hurting Kodak badly.

Kodak has lost a lot of sales across product lines due to this type of thinking whether it is true or not.

And, no one here has a full grasp of the entire picture, including myself.

PE

 

[old crow]

I think the use of film sales in 2000 is way off the mark if you are trying to make a statement about the decline of the use of film. People are still buying and using film as they can afford. Lets face it, people are all worse off in the wallet then they were in 2000. You are also a little off in your thinking that everything in public companies is out on the table. There is a big issue of illegal trade practices and trade manipulation that is at play at all times. There is a great deal of money to be made from people thinking a company is going under. Companies like Kodak can win from folding in a sense. If the prices of stocks slide at a regular rate, traders that projected that slide can make a win-fall if they get the numbers right. Also if they have stock prices that have fallen to a place where it would be good for another large photo company to step in an make a buy of the company then it is a win-fall as well. Names are worth a great deal of money, since there are memories that are often tied to names.

People that love one product and use one product will be drawn to purchasing more of that product if they think it will no longer be around (think polaroid) then when the dust settles and there just happens to be a product being offered from another company that works with the accessories of the dead product and looks a lot like the dead product then there is a surge to buy it up while using the fear that it will be gone (think fuji instant film). So there is money to be made.

Film companies have come and gone, camera companies as well. Digital did not kill film, it just changed it from being the everyday vehicle for the industry. You must be aware of the large number of people that are turning away from digital and moving backwards to see what was once done. You can see the use of wet plate in main stream magazine articles and the use of pop printing in mainstream as well. So there is not much to fear about.

When technology got into the automotive market people did not throw away their old cars for fear of getting parts for them. They knew that if they used it like many others did, then someone somewhere would make the parts. So lets not get all bent thinking that we will have to sell our film gear and all go get canon 5d set ups.

Hell with all the kids using Lomo cameras there is a ton of film being sold right there. Yes we may lose a company or two, but we will still have our film and still be able to shoot what we want when we want. We may have to work harder to find some stuff, but you know what it may be good to actually have to try to find something that is not simply two clicks away on the web.

Lets not be snobs over what you shoot and how you shoot it, drop the BS view about what camera you use makes you a better photographer. Thats utter crap. The picture is all in the shooters eye and hands and a ton is left to luck and natures hand in it all. Toy cameras shoot film, and so does every other size and shape of camera. New films come along all the time, and kodachrome was left rotting in the store rooms. It needed to be dropped because it was dead. You dont keep bad milk in your fridge for ten years with the hopes it might get used some day. So why do you think kodak should have done that?

 

[cmacd123]

Ummm, Drew, did you forget the Consent Decree by the US government? With that decree, Kodak could no longer sell Kodachrome with processing included, and they were forced to sell processing chemicals to others.
PE

But that only applied to the USA market. Elsewhere, Kodachrome was normaly sold with Processing included, and most independent labs just reshipped it to the local Kodak Lab. In the 1970's Kodak had a pick up service at many Canadian Photo stores just to allow free drop off and pick up of Kodachrome.

After Kodak spun off their labs as Qualex, the quality faded. Even for C-41, I used to send a lot to Charles Abel in Toronto, and the quality went west when Qualex took over (Abel retired and the family sold the lab)

 

[Photo Engineer]

Charles;

I've commented on your concerns in a subsequent post. Yes, other companies gave lower quality because customers wanted low prices, not high quality. So, we had photofinishers and quality pro labs split apart. We have 2 kinds right here in Rochester today. And this contributed to all of the problems which are legion!

Kodak is not blameless. Look at the quality from Verbatim before and after Kodak purchased them and look at the problems that came about with Drivetek after Kodak bought them!

But in the photofinishing argument, customers wanted local labs and low low prices. That is why you had the development of the minilabs too.

PE

 

[Plate Voltage]

But that only applied to the USA market. Elsewhere, Kodachrome was normaly sold with Processing included, and most independent labs just reshipped it to the local Kodak Lab. In the 1970's Kodak had a pick up service at many Canadian Photo stores just to allow free drop off and pick up of Kodachrome.

After Kodak spun off their labs as Qualex, the quality faded. Even for C-41, I used to send a lot to Charles Abel in Toronto, and the quality went west when Qualex took over (Abel retired and the family sold the lab)

Kodachrome came with processing mailers included in the price of the film in Canada until a couple of years before the end when processing was finally detached from film purchase. This meant that for most of the time I spent shooting Kodachrome, I had two options: Use the included processing from Kodak or eat the loss of that by paying for processing elsewhere like A&I or Dwaynes, i.e. pay twice for processing. I couldn't afford that so I ended up accepting scratched film as the price of shooting Kodachrome. Kodak's been their own worst enemy at times, that's for sure. I haven't walked away from them but how many people have? You can only kick your customers so many times before they seek alternatives.

 

[CGW]

I think the use of film sales in 2000 is way off the mark if you are trying to make a statement about the decline of the use of film. People are still buying and using film as they can afford. Lets face it, people are all worse off in the wallet then they were in 2000. You are also a little off in your thinking that everything in public companies is out on the table. There is a big issue of illegal trade practices and trade manipulation that is at play at all times. There is a great deal of money to be made from people thinking a company is going under. Companies like Kodak can win from folding in a sense. If the prices of stocks slide at a regular rate, traders that projected that slide can make a win-fall if they get the numbers right. Also if they have stock prices that have fallen to a place where it would be good for another large photo company to step in an make a buy of the company then it is a win-fall as well. Names are worth a great deal of money, since there are memories that are often tied to names.

People that love one product and use one product will be drawn to purchasing more of that product if they think it will no longer be around (think polaroid) then when the dust settles and there just happens to be a product being offered from another company that works with the accessories of the dead product and looks a lot like the dead product then there is a surge to buy it up while using the fear that it will be gone (think fuji instant film). So there is money to be made.

Film companies have come and gone, camera companies as well. Digital did not kill film, it just changed it from being the everyday vehicle for the industry. You must be aware of the large number of people that are turning away from digital and moving backwards to see what was once done. You can see the use of wet plate in main stream magazine articles and the use of pop printing in mainstream as well. So there is not much to fear about.

When technology got into the automotive market people did not throw away their old cars for fear of getting parts for them. They knew that if they used it like many others did, then someone somewhere would make the parts. So lets not get all bent thinking that we will have to sell our film gear and all go get canon 5d set ups.

Hell with all the kids using Lomo cameras there is a ton of film being sold right there. Yes we may lose a company or two, but we will still have our film and still be able to shoot what we want when we want. We may have to work harder to find some stuff, but you know what it may be good to actually have to try to find something that is not simply two clicks away on the web.

Lets not be snobs over what you shoot and how you shoot it, drop the BS view about what camera you use makes you a better photographer. Thats utter crap. The picture is all in the shooters eye and hands and a ton is left to luck and natures hand in it all. Toy cameras shoot film, and so does every other size and shape of camera. New films come along all the time, and kodachrome was left rotting in the store rooms. It needed to be dropped because it was dead. You dont keep bad milk in your fridge for ten years with the hopes it might get used some day. So why do you think kodak should have done that?

Film sales went off the cliff after 2000. Film camera sales tanked in the same period. The earth is round. Film isn't being sold widely now in N. America. Cheap c-41 processing has thinned. Where have you been for the past decade?

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

http://theonlinephotographer.typepad.com/the_online_photographer/2011/05/film-falls-off-a-cliff.html

 

[cmacd123]

Kodak is not blameless.
But in the photofinishing argument, customers wanted local labs and low low prices. That is why you had the development of the minilabs too.
PE

All I am saying is that when Charles Abel was independent, I could ship off a roll of C-41 film and get "acceptable snapshots" in a week at a low price. When Abel sold out to Qualux, A Kodak Company, the service was not as good. Abel was one of the larger low price photofnishers. (woolco, later walmart was who I used to send the film out through).

At that point I turned to a local Minilab as they actually gave better results than Qualux.

I did find it disturbing as at one time, Kodak in Toronto was the premium choice, at a higher price and much better quality than anyone.

 

[Photo Engineer]

Charles;

You are actually putting forth one of the arguments used to develop the minilab. Better quality and faster turn around times.

And yes, Qualux did give high quality initially but went downhill from there. Just as many people, a company can be misled or harmed by a business partner, or the partner may have good intentions and may just slip. IDK, but what you say is true and still does not invalidate my comments.

PE

PE

 

[DREW WILEY]

GCW - mid 90's?? Heck, I gave up on Kodachrome twenty years before that, and so did a lot of other
serious shooters due to unreliable processing. Velvia didn't even exist then, and no E-6 film had anywhere near the neutrality orfine grain as Kodachrome. If you wanted to do it right, you shot sheet film anyway (I still do).