Phoenix II - released 2025-07-16 - speculation and hints during the lead up

[dcy]

How else are they supposed to fund R&D on a product that took huge multinational companies decades and many millions to perfect?

Speaking of funding R&D, I seriously prefer Harman's model than the "kickstarter" model. My 4 rolls of Phoenix II arrived in the mail today. With Harman's model, I get a product right now, and I am fully aware of its limitations. I wish more companies were able to fund R&D this way instead of doing a kickstarter (I know that's not always an option, I just wish it was done this way more often).

Having just one competent manufacturer of CN film is not healthy....as great as Kodak's products are.

Not only that, but that one competent manufacturer is seriously hamstrung in its ability to make or sell new CN film products. I cannot legally go out and buy a roll of CN film from Eastman Kodak.

 

[MattKing]

Not only that, but that one competent manufacturer is seriously hamstrung in its ability to make or sell new CN film products. I cannot legally go out and buy a roll of CN film from Eastman Kodak.

Just as you cannot legally go out and buy an iPhone from FoxConn.
The decision to go entirely B2B was a direct result of Eastman Kodak descending into bankruptcy due to the huge weight of costs imposed by its pre-existing distribution and marketing infrastructure - infrastructure that was far greater in size and scope than their R&D and manufacturing operations.
Many business entities have had to make similar decisions.

 

[mshchem]

My theory is that Harman has a "perfect" 400 speed Ektar beating color film ready to go, however they have a dozen master rolls of the development mules that they have on their books that they need to get rid of first.
So we have at least Phoenix II to VII to get through first before we get to the good stuff.

 

[dcy]

Just as you cannot legally go out and buy an iPhone from FoxConn.
The decision to go entirely B2B was a direct result of Eastman Kodak descending into bankruptcy due to the huge weight of costs imposed by its pre-existing distribution and marketing infrastructure - infrastructure that was far greater in size and scope than their R&D and manufacturing operations.
Many business entities have had to make similar decisions.

The comparison to FoxConn isn't apples to apples. FoxConn did not invent the iPhone. My understanding of the settlement is that Eastman Kodak is literally not allowed to sell Kodak Gold retailers like B&H Photo, or even market it. A better analogy would be if Apple lost the right to sell the iPhone to retailers or make ads for it. Eastman Kodak currently sells movie film to CineStill. They cannot sell still film to CineStill. So this is not about going B2B. I am not expressing an opinion on whether the settlement was good or bad. I'm just saying that it's a legal constraint, not a simple business decision they could change their mind about.

 

[MattKing]

The comparison to FoxConn isn't apples to apples. FoxConn did not invent the iPhone. My understanding of the settlement is that Eastman Kodak is literally not allowed to sell Kodak Gold retailers like B&H Photo, or even market it.

No - Eastman Kodak sold that part of their business, and in return were both released from a large number of their obligations, and paid hundreds (600?) of millions of dollars, which together were sufficient to, along with sale of certain other assets, result in them being able to emerge from bankruptcy.
The sale had to be approved by the courts, but other than that, it was simply a sale of the major part of the Eastman Kodak business.
They went from a large, multi-national and international marketing and distribution entity with a relatively small manufacturing base and valuable but rapidly depreciating in value patent library (and thousands and thousands of employees) to a vastly smaller entity, with far fewer employees, and a business that includes a relatively small division that manufactures products based on coating technologies. Those products include, but are not limited to, products related to film photography.
Most of the employees either lost their jobs, or continued working for the company set up by the purchasers of the marketing and distribution business, who again paid hundreds of millions of dollars and gave up claims worth much more for the rights to sell or market the product.
Eastman Kodak remains the owner of the film related technology. Still photographic film is a relatively small portion of their business, which itself is mostly related to the commercial printing industry.

 

[dcy]

No - Eastman Kodak sold that part of their business, and in return were both released from a large number of their obligations, and paid hundreds (600?) of millions of dollars, which together were sufficient to, along with sale of certain other assets, result in them being able to emerge from bankruptcy.
The sale had to be approved by the courts, but other than that, it was simply a sale of the major part of the Eastman Kodak business.

So... theoretically... if Eastman Kodak wanted to sell Kodak Gold to B&H Photo, they could?

I'm sure it doesn't make sense for them financially. I'm just asking about what they are allowed to do in principle... If they decided they wanted to start a new business venture and compete with Kodak Alaris in the sale and marketing of sill film, can they do that?

Eastman Kodak remains the owner of the film related technology. Still photographic film is a relatively small portion of their business, which itself is mostly related to the commercial printing industry.

To make sure I understand. Kodak Gold is still manufactured in Rochester NY by Eastman Kodak. Right? If Eastman Kodak had the inclination to start selling it to retailers, they could?

 

[dcy]

One sentence that caught my attention:



"... Matt Perry, who's the marketing manager [of Harman] and he made it very clear during that interview that color is a big part of the future of Harman."

 

[ChrisGalway]

..... I honestly cannot imagine what they could have done better ....

Well, they could have done what many companies developing new products do: (1) Establish the business case (for a new high-quality CN film), (2) raise the necessary investment and (3) work away with multiple internal prototypes until the final product met the specifications (of a high-quality CN film).

Harman chose another route, selling their low-quality prototypes to help fund their R&D. I agree that they have been totally transparent about their approach, but my point is there could have been another approach ... that used by a very large number of companies developing innovative products. However, their chosen approach is better than Kickstarter in my opinion.

 

[Agulliver]

Yep I see this as the beginning of Harman playing a long term role in the colour film market. Their main disadvantage is starting almost from scratch...but one of the aces up their sleeve is their distribution network. Let us also not forget the £10m pumped into them by Lloyds and the huge medium term vote of confidence that means.

And through all this, they fully intend to keep the complete range of Ilford and Kentmere B&W products available at realistic prices. Win/win. I fail to see anything opaque or "insidious" here. Harman are very clear about the experimental nature of Phoenix I and II, and describe the likely differences compared to more conventional C41 film honestly. Therefore it's not confusing anyone or conning anyone into thinking they're buying a Portra beater. We all have the information we need to decide if this is a journey we want to join in or not. I've partaken a little bit while some have bought dozens of rolls. If others prefer to wait until the film is a "normal" C41 film that's fine too. Harman aren't forcing anyone to buy or making any dishonest claims to persuade less knowledgeable customers to do so.

"I don't like this and it isn't for me" is perfectly valid. "I don't like this so I don't want it to exist" is not. Surely the world is a better place for having Phoenix in it.

 

[Agulliver]

Well, they could have done what many companies developing new products do: (1) Establish the business case (for a new high-quality CN film), (2) raise the necessary investment and (3) work away with multiple internal prototypes until the final product met the specifications (of a high-quality CN film).

Harman chose another route, selling their low-quality prototypes to help fund their R&D. I agree that they have been totally transparent about their approach, but my point is there could have been another approach ... that used by a very large number of companies developing innovative products. However, their chosen approach is better than Kickstarter in my opinion.

I think you *massively* under-estimate how much this endeavour will cost, or *massively* over-estimate how much Harman have to invest in R&D.

No other approach was viable, that's been laid out already. We either get Phoenix in it's incremental steps hopefully arriving in some years as a high quality film...., or no CN film from Harman at all. The process will cost millions, that Harman don't have even with the partnership and funding injection from Lloyds.

 

[ChrisGalway]

I think you *massively* under-estimate how much this endeavour will cost, or *massively* over-estimate how much Harman have to invest in R&D.

No other approach was viable, that's been laid out already. We either get Phoenix in it's incremental steps hopefully arriving in some years as a high quality film...., or no CN film from Harman at all. The process will cost millions, that Harman don't have even with the partnership and funding injection from Lloyds.

I agree that a large investment is needed, but this is what the vast majority of companies with innovative products do.

Imagine if medical device or pharma companies took Harman's approach! (Fortunately there are agencies like the FDA to keep an eye on this.)

Lucky have just released their ISO200 CN film ... looks nice, first time. They made an investment.

 

[koraks]

I agree that a large investment is needed, but this is what the vast majority of companies with innovative products do.

Imagine if medical device or pharma companies took Harman's approach!

You're now ignoring some very fundamental differences between a firm like Harman and med.tech and pharma companies, among several domains in terms of financial structure. Is that on purpose or are you honestly not aware of why the comparison doesn't make any sense?

 

[brbo]

Lucky have just released their ISO200 CN film ... looks nice, first time. They made an investment.

But this investment was on top of huge investments made decades ago.

 

[ChrisGalway]

You're now ignoring some very fundamental differences between a firm like Harman and med.tech and pharma companies, among several domains in terms of financial structure. Is that on purpose or are you honestly not aware of why the comparison doesn't make any sense?

On purpose (I worked in the med tech industry for a while) and of course the two industries are different.

I'm just making the point that, although Harman were transparent in their approach, there WAS another approach, and the vast majority of companies trying to make innovative products, especially startups, take this approach to achieve their goals. Typically they do not choose the route of releasing prototypes to the general market but wait until their prototypes meet their initial specs.

 

[koraks]

On purpose (I worked in the med tech industry for a while)

Then you also should understand that access to capital is a really different story for Harman given the market it operates in (and a lack of diversification in that regard, which is where your parallel with Lucky breaks down).

Typically they do not choose the route of releasing prototypes to the general market

For a multitude of reasons. Although the concept of marketing an MVP has become a rather common for startups in plenty of industries. Especially with consumers products this often makes good sense. So also in that respect Harman isn't doing anything odd or outrageous.

And whether you like it or not, how long are people going to whine and complain about this? You like it, you buy the product. You don't like it, you steer clear of it. Simple. It doesn't make sense to keep going on about something that just evidently works differently in practice from what you'd want it to be. "Oooh, that Eiffel tower would have looked so much better if they had illuminated in pink." It's just completely ridiculous.

 

[brbo]

I'm just making the point that, although Harman were transparent in their approach, there WAS another approach, and the vast majority of companies trying to make innovative products, especially startups, take this approach to achieve their goals.

The perception that vast majority of companies operate that way is not correct since you never hear of companies (or potential companies) that never release new products because the risk of such approach is just too high.

Typically they do not choose the route of releasing prototypes to the general market but wait until their prototypes meet their initial specs.

Typically they do. You just don't perceive their products as prototypes because they release something that doesn't exist and then quickly iterate the product to a level where the first iteration is definitely a prototype in comparison. Harman are just unlucky that they are playing in a field where the N-th iteration already exists and lucky that the producer of that very good product is only concerned in lowering the costs of production of that product.

 

[dcy]

Well, they could have done what many companies developing new products do: (1) Establish the business case (for a new high-quality CN film), (2) raise the necessary investment and (3) work away with multiple internal prototypes until the final product met the specifications (of a high-quality CN film).

I absolutely do not think that that would have been better. I think that plan would've failed. I doubt they'd be able to find an external investor to gamble on something as risky as developing a new CN film from scratch in 2025. If they did find such an investor, I would expect the investor to want a pretty significant ownership share of Harman; perhaps even a controlling share, and I'd really worry about what that would mean for the future. They would also be missing out on all the real world testing and feedback that they're now getting.

I think Harman's fully in-house, step-by-step approach, with community engagement and frequent feedback is a much safer and surer way to make a good CN film.

Harman chose another route, selling their low-quality prototypes to help fund their R&D. I agree that they have been totally transparent about their approach, but my point is there could have been another approach

Well, my question was whether they could have done anything *better*.