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The end for Kodak?

Aristophanes said:
Their film divisions has lost money Q over Q at about 10% per.

It's a steep decline of demand with no bottom in sight.

Who buys a product with a declining customer base?
Click to expand...

Those losses compare pretty well to overall demand losses across the board; almost nobody producing consumable or durable goods has fared well over the past year or two. And petrochem has been especially volatile.

Also, the losses in EK's film sector probably have less to do with decreasing demand than an overall lack of internal strategy for how to maintain demand while expanding market share. A small, streamlined company possessing brands, capable manufacturing equipment and knowhow, and not encumbered with a lot of overhead and legacy expenses could probably grow their market share even as film demand weakens. There is good precedent of this; think of the tobacco industry. Few industries have had their bottom line so singularly attacked... realize that it actually became illegal for the tobacco industry to do their most effective advertising. Nevertheless, Philip Morris grew revenue very substantially, mostly by claiming a bigger chunk of the market share in the US, by looking abroad for other consumers.... and by looking at adjacent sectors and reaching into those.

So, a smaller, more agile company with less flab to carry might be just what the doctor ordered for EK.

I am not sayiing it's all roses, mind you; I am just saying it is possible that a film-focused spinoff could do better than the company as a whole.
 
There has been a possitive side to Kodaks coating division in the past 2-3 years with the continued introduction of imroved films despite the dire problems with the rest of the company.

I'd pick up your last sentence because I had to switch from Kodak Tmax films about 5 years ago because I just couldn't get tnem easily when outside the UK, there was plenty of consumer C41 but nothing else, Iford & Foma films are very mucheasier to find.

Ian


 
"At the bottom end, how difficult can it be to build a 21st century version of an Instamatic or Hawkeye? How difficult can it be to partner with an existing manufacturer to produce a film version of an existing dslr by taking out 90% of the circuitry, adding film handling hardware and slapping on a Kodak label? I doubt those companies have forgotten how to build a film body. If they dust off an old design, startup costs would be very low, mainly for tooling up the manufacturing.

Producing products for a niche market is very possible, especially if that niche is actually world-wide via sophisticated web marketin"

We're not living in an "Instamatic" or "Hawkeye" film world any longer. I see bins of old film p&S and low-end AF SLRs giveaway-priced and collecting dust at the outlet of a large camera chain in Toronto. There are no new film cameras because there's no demand sufficient to warrant production. These fact-free arguments won't turn back the clock. I'm hoping Ilford stays afloat. Kodak? We're all guessing.
 
MaximusM3 said:
And isn't it always this way? Negativity and negative attitudes are the life and blood of news, forums and controversy. Me, I just bought another 200 rolls of Tri-X 120 and shoot an average of two per day. Happy days!
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right on max !

i wish i had 200 rolls of tri x, instead i have 300 rolls of plus x

happy shooting !
 

I totally agree. it's a niche product unable to compete with digital, so it has to occupy a different space in the consumer mindset. In artistic and cultural terms this could be a silver [sic] lining. Kodaks' new films (Ektar and Portra) and their unique look are what got me back into film photography.

Any company buying Kodak assets to do this will need a lot of up-front capital, and that's where the problem lies. They have to cover operations, taxes, supplies, power, labour, management, etc. You have correctly identified the engineering resources being retained as critical. Absolutely. I would look not to the film photography clique for any saviour, because that's been coasting on the gross revenues of the motion picture side. There's where a white knight may be due to the strong allegiance and deep pockets of some very successful people who relied on film for their careers and have deeper pockets than anyone in static photography.

Financially, Kodak's film production and distribution cannot shrink as fast as the demand market is, and Kodak cannot see the bottom. Maybe someone wiser can if the production assets go for a fire sale. All I am saying is it's a lot of risk because the other side of the coin is the razor as opposed to the blade, and in 2004 Kodak (and others) stopped making film cameras. Now we have the other shoe dropping. Kodak was always relying on "someone else" to supply those cameras (at least Fuji has put our a couple of models in the last 5 years). Any purchaser of the film assets also has to rely on "someone else" to mas produce a few lines of cameras. Lomography is not that someone; their model is essentially parasitic, and now the host is dying.

The capital problem is that it may require miles of film production to be profitable, while demand may not equal miles of film. If there are no new cameras, then any investment is dependent on eBay and local sales of increasingly old equipment, and that equipment is sustained by a rapidly decreasing number of service companies.

That's a very difficult business model for any creditor extending capital to a white knight to get behind. That's the stumbling block I see, and it is huge because the issue is not a cash purchase of the assets, but the operational capital to keep it going. Distribution is especially problematic because of the high cost. You are right about centralized, internet-based marketing and distribution being key. This will also apply to (as Ilford has done) a mail order processing and scanning system. "...we do the rest" is a slogan in need of resurrecting.

For cameras, it's not Instamatic or Hawkeyes that are the need. It's higher quality, mid-priced stuff using decent glass, because a film camera will be a second (or third to the smartphone) camera for the enthusiast; a sidebar to their main digital shooter. Marketing will be nostalgia and heritage, and, ironically, convenience (there's a certain curse in having your PC as your darkroom). There will need to be PDAF autofocus in the mix, especially as high developing costs require less missed shots to avoid consumer disappointment. Any partnering is really a subsidy by the film manufacturer to the digital body, shutter, and lens maker. Will that premium passed along to the consumer be acceptable? Hard to say.
 
CGW said:
"[I There are no new film cameras because there's no demand sufficient to warrant production. These fact-free arguments won't turn back the clock. I'm hoping Ilford stays afloat. Kodak? We're all guessing.
Click to expand...

Well, that statement is not exactly true. Leica, Voigtlander and Zeiss all market high-quality film rangefinder cameras. There are low-end film SLR's from Vivitar and Cosina/Voigtlander, Hasselblafd makes a medium-format SLR with an available film back. The current incarnation of Roelli sells medium-format film cameras. There are a wealth of large-format cameras from makers all over the world. One can still get disposable cameras preloaded with C-41 film.
 

Any corporate entity buying the film assets will pretty much need to also buy those cameras and give them away free to spur sales of film. I am the grateful recipient of some of those bargain bin SLR's (at Henry's downtown T.O....right?) and they are fantastic. But you are right; they do not sell side-by-side with a wall of digital products. Where they are is the wrong sales channel for anyone who values analog film. and somewhere in that same store is likely a new analog Leica and $20,000 worth of lenses.

As someone who recently got back into film after the better part of a decade away, the biggest impediment is developing, printing, and scanning. Ilford seems to have clicked into that gap with their mail order service because the home darkroom hobby market is far too small to sustain industrial emulsion production. We all want Kodaks' crow jewels to survive, but they need more elements to do so than just some buyer to keep the factory churning out Tri-X and Portra. All of Kodak's documents demonstrate is a continuous downhill slide in film demand, at 10%+ per annum, with more than 90% of the historic high point gone within the last decade. Any solution for analog roll and cartridge film survival will require a whole circle of products.
 

Let's say it's true enough. What about Canon/Nikon/Pentax/Minolta(oops, eaten by Konica, then Sony), Olympus? You know, the stuff that filled the shelves in 2000 that's nowhere to be seen now except on eBay, swap meets, Craigslist, and around/on our necks and shoulders. Leicas, Hassies, Rolleis and LF cameras weren't and aren't mass market. Yup, dollar stores are the "go-to" for new film cameras--got 10 Kodak flash disposables for my New Year's party for <20 bucks!
 
I'm so glad to see CGW and Aristophanes play their single "film is dying" tune *again*. How are you so sure that demand for photographic film is in free fall right now? Does ANYONE know anyone who shoots lots of film but will go digital real soon now? Funny, I see a lot more people going the opposite way right now ... Who in his right mind would spend 1$ on an old crappy P&S if you can get a decent one for less than film&dev costs in a year of moderate shooting? The reason few new film cameras are made is because there is a prolific used camera market. Film cameras used to last for 20+ years and were exchanged for digital cameras well before they were to break down, so the used market is flooded and will stay that way for a while.

For ten years people have predicted the imminent death of film, and I can still get color film, B&W film, chems and paper. As I said before, you remind me more of Clippy than Cassandra if you screamed about the downfall of Troy for ten straight years before it eventually happened.
 
I had a look at the link to the rangefinder forum. Based on what is being said there, has anyone had the heart to tell Simon Galley about the inevitable fate that shortly awaits Ilford as well? It seems that the worst case scenario( total failure ) is in fact the only case scenario but no-one at Ilford has spotted this yet.

Simon Galley may think he is helping to run a viable business but is actually arranging the deckchairs on the Titanic

On the other hand it might just be that the Ilford board knows a bit more about the future of their business than we as outsiders do.

pentaxuser
 
CGW said:
We're not living in an "Instamatic" or "Hawkeye" film world any longer. I see bins of old film p&S and low-end AF SLRs giveaway-priced and collecting dust at the outlet of a large camera chain in Toronto.
Click to expand...

I said "At the bottom end" and suggested a modernized version of that concept - the whole lomo thing is exactly that. You ignore that I also addressed the upmarket.

CGW said:
There are no new film cameras because there's no demand sufficient to warrant production. These fact-free arguments won't turn back the clock. I'm hoping Ilford stays afloat. Kodak? We're all guessing.
Click to expand...

Hmmm. What are all these?

http://www.bhphotovideo.com/c/buy/Film-Cameras/ci/9812/N/4294203945

I agree that there is not enough demand to warrant "mass" production. That is a very different thing from there not being enough demand for a niche producer. Kodak cannot survive as a mass producer, that is a given, and I am addressing the possibility of a niche-market successor. In declaring my argument as fact free, you have chosen to ignore that qualification.
 
pentaxuser said:
Simon Galley may think he is helping to run a viable business but is actually arranging the deckchairs on the Titanic
Click to expand...

Damn! And to think I was just about to pull the trigger on one of those non-existent brand new film cameras! One of the non-existent Fuji 667 folder bellows cameras, no less. I've got the money in hand, but apparently there is no existing camera in sight. Only advertisements and pictures at B&H. Do they know they don't have any? Has anyone told them?

And I was also counting on Simon for 120 film to put into that phantom camera. Has anyone told him that his company is on the short road to extinction? A Dead Man Walking?

Guess I'll have to buy an i-something instead. And find a virtual Fuji 667 to use on it. I'm sure there's an app for that.

What was I thinking? Glad I read this thread!

Ken
 
Film can't compete against the digital mass market, that's just stupid to think. Film is it's own thing and should (still) be branded as that. For artists and photographers it's a way of working and a tool to choose for the expression you want. For "normal" people the choice is more about workflow and less about the picture quality. I hear one thing a lot from customers, "My kids gave me a digital camera, but I use my film camera because it's easy to use and I get prints done easy." And for people using two-three rolls of film each year film is still cheap.

I totally agree with Aristophanes, the "You press the button, we do the rest" slogan is still something Kodak can work with. For many people, especially old, digital is not easy.

The days of high volume mass production multi billion business in the film industry is over, so those who want to be in the business must adapt to smaller volumes. The p&s family&holiday snapshot film market is soon dead, so it will defently be a niche market like the one Ilford has adapted to. When I say "dead" I mean there won't be a one hour minilab in each city, but it will of course be commercial labs for many, many years to come. For most people it will be via mail.
 

Just another fact-free argument. Despite a clinical level of denial, you seem to be mistaking a possible "dead cat bounce" for an uptick in the market. Demand for film has already cratered--why deny it? The reason no one buys new is that there is no "new." Used gear is a "long tail" phenomenon and testament to just how much film was shot and gear bought over the past 30-50 years. But let's see: no more Kodak b&w paper, film line-ups pared by Kodak and Fuji, Agfa dead, Ilford back from the dead(thankfully), mass extinction of pro labs and mini-labs in N. America, higher prices, local chem/paper access difficulties...

Sorry Rudeofus but you're reminding me of the Black Knight in the old Monty Python sketch from the "Holy Grail."

http://www.youtube.com/watch?v=zKhEw7nD9C4
 

Be sure to send us pix of you nuzzling your new Arca-Swiss, OK? Fact-free stands. We've lots of used gear to burn through, so much that it will probably outlast the future supply of film. The Kodak misery pains me deeply but there's reason to think "right-sizing" Kodak's photofilm production will be easier said than done.
 
Film is widely regarded by the masses as less than, obsolete, or flat out gone due to the hype of the digital juggernaught. So what it needs is brilliant imagery as it's front man. Unlike Flickr or other places drowning you with billions of images, this site has the unique opportunity to engage people based on this brilliant portrayal, but it falls short for a few reasons...

1. There could be a looping slideshow of some of the best new analog work out there on the home page, but there is not.

2. There could be a more flavor forward feel of the content of the images in analog being easily detected by the new forum reader, but again, there is not.

3. Perhaps lock out the forum topics from non-paying or visiting site users rather than the very things that are not only to bring in more potential film users but more paying site users, THE PHOTOS.

Instead, it is more and more technical just like a lot or other forums and in the case of those on here who are both outright uninformed and negative but love to hear them selves talk like Aristophanes and CGW, they do nothing to further either the craft of the medium or even the future of this site. I see no work by them and yes, it matters to me....and it matters to those who right this very moment might be asking "Why should I use film, show me why?"

We need more talented users of film to come forward and make great images readily accessible in *every* discussion, end of story. This site is missing out on being the advocate for analog use due to a lot of reasons, one of them being that one of the very first things a site visitor should see is great imagery on film.

This is a visual medium we are talking about here, you are not going to gain new film users by posting a bunch of hot air and have great imagery buried in a bunch of forum subsections and under lock and key...


 
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A great investment?

Anyone looking to take over the Kodak b&w film business will have their work cut out, that's for sure. First thing is, take a look at the competition. True, Fuji film has been dropping like flies (goodbye SS & NP1600) but most likely they'll carry on with NP400 & Acros (they are Fujifilm after all). Then there's Ilford offering a large range of film and paper as well as other European producers such as Foma & Efke not to mention Lucky in China. And you're going to turn this thing round on a dime in the middle of a recession (depression?). Personally I doubt it.
 

Kodachrome Project, right...

So we scan negs and trans and post them here. Flickr already contains zillions of film shots--some great, most not like much of Flickr content.

"Uninformed and negative" is a remarkable charge. You don't have a clue what I do to promote film locally. I was on photonet for years and never critiqued because I never posted. You seem to have been very busy there posting images. Did you help out in the forums? Your choice--and mine.

APUG probably works best by connecting film shooters locally. We often help former film shooters get back to reality; we know the local ecology of labs, services, and shops and share information they otherwise would miss. That works for me and seems to work for others. I live way more of my life in public than online and prefer it that way.

If you feel mobilizing interest in film is best served by posting images, then rock on. But don't crap on people you don't know, who do things elsewhere, and who work for a shared interest differently than you do.
 
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I'd hate to interrupt the entertainment so I will try to be succinct.

(1) Kodak isn't film photography;
(2) The US and European markets aren't the entire market for film;
(3) Some of us use the "other" technologies quite happily but also still see plenty of reasons to shoot film;
(4) The value of film-derived art is going up, not down; and
(5) Film photography is not Kodak.
 
Could we...Should we, make a Kodak vs Polaroid corporate comparison?

Polaroid went through two bankruptcies; a reorganization in 2002(?), and a liquidation in 2008(?), IIRC.
There are far more traditional film users in 2012, (market demand), then there were instant-film users in 2002 and 2008.
Polaroid had far worse corporate executives, (and a very limited, [dead] product line) then Kodak ever had.
Then...and now!

As with many companies in these trying times, Kodak needs to reduce their legacy costs, ie; retirement and health care.
We have seen the same reorganization happen with the major car manufacturing companies, airlines, and other [big-board] companies.

The sky is not falling. It's a bit cloudy, for sure, but Kodak's film division will survive for a long time to come.
 
I personally believe Keith has summed the situation up quite nicely with his item list, especially (1) and (5)...

Ken
 

I am not privy to their books, but I believe that Ilford have a far better position long term than do Kodak for film. The major part of Kodak's film business is colour film which goes to the motion picture industry, mostly in prints for distribution. Digital technology is replacing film for the distribution of film, which is leading to a massive drop in demand for colour film. Ilford product black and white film for the still imaging market, this has already gone through the major shrinking that resulted from digital imaging and is now stable, and possibly even growing.

It is because of this that I shifted virtually all of my workflow away from Kodak products to Ilford several years ago, and feel pretty comfortable that I will be able to grow old using Ilford film.
 
vpwphoto said:
I then used a $30,000 DICOMED digital back that had a $55,000 computer tethered to it to run. It made real nice images digital images (the latitude before highlights "bloomed" was that of slide film), that took a while to render also.
Click to expand...

One of my clients has an old Dicomed BigShot sitting in a cardboard box under a table, complete with Mac OS 9 software and a SCSI cable. Talk about fully depreciated!

My prediction is that digital will begin to flatten out. My son's point and shoot makes a 16 MB file every time we make a snapshot. It's ridiculous! Every time we turn around we've got 4GB of movies and snapshots!

I usually shoot on a Canon 5D, but I rented a 5D Mark II last year for a large commercial job. In 16 bit, with a few layers, the files were so huge that I could barely handle them on my not very old Mac.

The two big medium format digital companies, Leaf and Phase One, have now merged into one unit, with the Leaf backs being rebranded for Mamiya. Seriously sexy stuff, if you can afford it, but not many people can, nor find it necessary, which is why the companies merged. The local rep called me with refurb Leaf 22MP backs on sale for $4K. (Very tempting, but I'd probably only use it for my personal work.

Like you said, the hardware couldn't support the digital cameras for a long time. I think we are moving in that direction again, only this time it's "How Much Data Do I Really Need?" cause these 24MP files are making my computer crawl!

The 5D files are beautiful at 20x30 and larger. A good RIP can take a 10" file and make it a flawless 30" print, no problem. More mega pixels means longer downloads, more storage needed, faster computers, faster internet, etc.

So, I've avoided upgrading for these very reasons, as have others. My first book was shot on the 5D and looked fantastic - what more do I need?
 
I am not anti-film, but the patient is in cardiac arrest. It's death can be postponed perhaps forever if the right steps are taken now.

If you look at Kodak's books you see that Kodak is weighed down by pension and medical obligations. Chapter 11 will erase those. Very sad for those whose incomes and comfort disappear.

Kodak is also weighed down by debt accumulated to run its film production and distribution while the demand curve plummeted. Debt subsidized film for a very long time as Kodak de-leveraged production assets (blew them up). Gross revenues appear to have been maintained by the cinema side, but now that is collapsing as well. All analog product lines are unit-by-unit profitable, but the gross revenues are still in steep decline with no bottom. For a public company this is extremely problematic. They cannot borrow money to subsidize a declining product line, and they risk killing their other product lines if they cost-shift. Chapter 11 is aimed at unloading their film biz.

Debt was also used to fund the new investments in print operations and other digital positions. Those operations are actually profitable both against capital and operations, but they are burdened by the legacy debt and pension/medical loads. In fact, the Q3 statement shows the despite underlying economic headwinds, revenues were up. They had to discard some digicam lines but their imaging divisions made money. Sans the debt carried across all operations, and the benefits as well, this would actually be a success story. I do question, however, the long-term viability of the small printer market. Kodak sold their sensor business to deliver ink under a brand name. Kodak becoming a brand carrier for Made in China plastic ink boxes is a real decline in manufacturing and technical prowess. Not an Eastman concept. Truly tragic.

But for shareholders only the digital items contain any growth potential. This is backed up by the patent portfolio. The analog business is dead weight because there is falling demand. So Kodak will shed their film biz. As a public company and soon a creditor-demand company, they really have no choice.

But this is the troubling part. In order to buy the film biz, the new player, spin-off, white knight, venture capitalist, or whatever, will need to buy 3 things:

1) Buy the assets. They'll need the physical factories, the distribution channels, the IP for the analog side, and probably the Kodak brand name. Through Chapter 11 these might be had for a song. After all, digital Kodak needs these gone and the worth to Kodak shareholders may be nil because their operational overhead is a drag. Just get them off the books because further cost-shifting is not an option.

2) Buy the operational capital. Those factories require some pretty serious overhead to keep running and the lights on. They need raw materials and other supplies. They need to re-hire all the staff who just lost their pensions and medical benefits. They need to (desperately) retain the core engineering and R&D components and pay them in contract regardless of profitability. They need to keep their supply channels open or set up a new centralized web based delivery shop.

This is all pure overhead. Many companies borrow against future earnings to start a new business. That's the whole point of venture capital: keep the lights on while the market grows. Except this market is shrinking and no one knows the bottom. So whoever comes in will have to have money to burn while trying to find market bottom.

3) Buy the money. As noted above, most companies borrow money on a risk-weighted system to fund these concepts, especially through Chapter 11 and bankruptcy financing, because there is often a core, viable market. But with film the core market appears to be based on selling razor blades to people when virtually no one is making razors (cameras) anymore, and used razors are being sold at flea markets or junked. In the long run, borrowing money to fund both the asset purchase and the operational capital is a huge issue because without movement in the film camera market, there is no market for film in the on return on investment horizon. By definition there can't be. The cost of buying money is interest.

So no one will lend a new Kodak film operation money unless it is secured through surety against external assets. That's highly unlikely unless the new Kodak keeps film and cost-shifts. Certainly some creditors will not accept that proposition. The film business could be shuttered entirely because none can come up with enough operational capital or borrow it. Even a small volume operation is highly problematic because the scope of the production facilities etc. just do not scale down well, and core engineers will look elsewhere for personal job security (Dow, 3M, the oil patch). Roll, cinema, and cartridge film require large-scale industrial system to manufacture and precise, legacy knowledge through core personnel to execute.

A Kodak bankruptcy and a scenario where the film division is a troubled asset unable to find operational purchaser sends shockwaves through the remaining film producers and all those who depend on film processing, distribution, etc. It sends a signal to all creditors of Fujifilm, Ilford, and any other company making film that the market is in decline and your credit availability is under scrutiny. It sends a signal to all who extend credit to small photofinishing shops. It sends a credit risk signal to all suppliers of anything to do with analog film production and processing, period.

Any new creditors are going to be looking for the razor manufacturers as well, not just satisfied to keep lending money or extending credit to a guy making razor blades. Fuji is probably immune as they have almost entirely transitioned their biz to digital, but Ilford may struggle even if they gain some Kodak customers.

Someone used a car analogy. If I wanted to start a company making parts to go into biz making parts for pre-1980 Mustangs and Corvettes, my creditor is going to check to see how many of those vintage cars exist on the current market and what the depreciation is. If they see my market is a continually shrinking market, I will not get very limited credit. In short, the whole analog film business could be credit-starved (like greece) because of what is sign on with Kodak.

I focus on the lack of a coherent film/camera/processing dynamic because the Kodak shockwave is what every creditor throughout the industry is now going to zero in on. Even Mom & Pop photo labs clinging to a core market may feel the repercussions from this if they need to buy a refurbished Fuji Frontier on credit and such.

That's where I am coming from. It's my perspective because I have a background in this.
 
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