The facts of film production

[Photo Engineer]

Ok, and the short answer is for any 'smart' businesss owner....price your product to reflect TRUE cost, including spoilage (among other things including overhead, etc)...and yes in a declining market this can be somewhat of a moving target..

Now, if the market will not bear the cost increases...well, your done.

I financed several acquisitions of rapidly declining market businesses that were bought on the cheap, scaled down (read - dead weight overhead) and turned into cash cows in a declining industry/market. Sounds like the AGFA plant overseas...not sure if this is possible with Kodak...

But, a billion dollars in film sales is still a market...

Scott;

In my post above I describe how Kodak did the major R&D for process chemistry. For example, Ilford and Fuji sell B&W lines of chemistry and Fuji sells color lines that they never really had to do R&D for except for a few unique items. So, as a result, Kodak products reflect R&D costs that no one else had. As a result, by doing what you suggest, with already higher costs, Kodak found that sales of some products very nearly ceased. This was the case for B&W papers for example. Simply by doing good R&D, they priced themselves out of the market.

The development costs for C41, RA4, E6, HC110, Xtol, and etc. were not trivial and must be factored into the cost of the products. And, those processes continue to change today.

The same may be said of lower tier manufacturers. They are beginning to sell well in spite of defects. This will eat into Ilford sales and eventually Ilford might be priced out of the market just because the lower tier companies inject nothing into R&D and little into QC.

Do you see a picture for the future developing here?

PE

 

[pauliej]

Same problem for all American manufacturers - they can produce by the box-car (or train) load, but how the heck can they sell all that production? Nobody, and I mean NOBODY, on this planet can produce in volume like here in America, but how to sell at a profit and stay in business and keep Wall Street (not the camera store) happy too. Wally-Mart can sell the train-load of product, but not at prices you can make a profit with - the only profit is their's and that's how Sam wants it to continue.

We American consumers have chosen to buy foreign made goods, often made by American based companies, and we send our dollars overseas, maybe never to return. I dont know how it works in other countries, but I can see how Great Britain, etc. have lost their former world-class financial status, etc. and now the same is happening here. If Kodak, et al, cant sell film/paper/chems at a reasonable profit, then how can we expect them to continue losing money? By coming up with new tricks, like APS? Not a stable business model, I am afraid.

I hate like heck to pay $3.00+ a gallon for gasoline, but what choice do I have? Pay or park I think. Will we be paying $10/36 exposure 35mm in the near future? I dont like the thought of that, but again, what are the alternatives? What can we do about this?

Apologies for the ranting, and thanks for listening.

Paul

 

[Photo Engineer]

Paul;

Read my last post on product development costs. Think again what it would do to prices from Kodak if they had no more R&D and no more quality control. Prices could then drop by a great margin with no future improvements.

The two electron sensitization that made the new Portra and B&W films possible took over 15 years and millions of dollars to do in R&D.

APS was a joint design with Fuji, Kodak, Agfa, Nikon, Canon etc. Don't blame Kodak for that one. It was a design to normalize the size of electronic camera sensors and film image size for printing purposes, and also to allow for HD image ratios on still film. I'm not justifying the design, but do point out that APS did NOT originate with Kodak.

PE

 

[chrisf]

Hi Ron,

I have a question regarding the B&W papers in general and Azo in particular.
When Kodak announced they were going to quit making B&W paper (summer of 2005) was another run of Azo made before the end of the year? It is my understanding once the announcement was made someone came in and bought the remaining stock of Azo. It sure would have been nice to take one last order, much like the ULF film order, of Azo and made one last run before shutting the lines down.

Can you tell I miss Azo?

chris

 

[Photo Engineer]

Chris;

IDK if there was another run or not. I have two stories. One says no, and the other says yes, but it was not as good as expected and so was not sold or something. I have heard other stories that one person bought a huge cache of it.

IDK what the truth is. Sorry.

PE

 

[aldevo]

Scott;

In my post above I describe how Kodak did the major R&D for process chemistry. For example, Ilford and Fuji sell B&W lines of chemistry and Fuji sells color lines that they never really had to do R&D for except for a few unique items. So, as a result, Kodak products reflect R&D costs that no one else had. As a result, by doing what you suggest, with already higher costs, Kodak found that sales of some products very nearly ceased. This was the case for B&W papers for example. Simply by doing good R&D, they priced themselves out of the market.

The development costs for C41, RA4, E6, HC110, Xtol, and etc. were not trivial and must be factored into the cost of the products. And, those processes continue to change today.

The same may be said of lower tier manufacturers. They are beginning to sell well in spite of defects. This will eat into Ilford sales and eventually Ilford might be priced out of the market just because the lower tier companies inject nothing into R&D and little into QC.

Do you see a picture for the future developing here?

PE

I think you are somewhat incorrect regarding the price pressure Ilford faces.

I am 100% certain that if you were turn the clock back five years you'd see more manufacturers with greater visibility (Agfa, Konica, Fuji, etc.) selling their B&W film or paper products at a lower cost than Ilford.

Don't forget that a few years ago Ilford saw the need to allow retailers to re-brand their products at lower cost. They, apparently, feel no such pressure now...

I think Ilford's biggest worry right now is their lease of their production facilities and the gang-busters real estate appreciation in the UK that makes that lease a costly proposition. Yes, that's speculation on my part, but if I were a betting man...

 

[BobbyR]

Does anyone remember, as Henry Fonda used to say G-A-F.

How much R&D did they spend the years they were around.

Bob

 

[pauliej]

PE: What do the powers-that-be at Kodak say about the future of the film biz? Can you believe what they say about this, with any certainty? Can Kodak, or anyone, make a profit and continue with film/paper/chems, or does everyone need to move on to digital and put all the old stuff in museums, or on e-bay? I hope it can continue.

Just my 2 cents, less taxes...

Paul

 

[Photo Engineer]

I think you are somewhat incorrect regarding the price pressure Ilford faces.

I am 100% certain that if you were turn the clock back five years you'd see more manufacturers with greater visibility (Agfa, Konica, Fuji, etc.) selling their B&W film or paper products at a lower cost than Ilford.

Don't forget that a few years ago Ilford saw the need to allow retailers to re-brand their products at lower cost. They, apparently, feel no such pressure now...

I think Ilford's biggest worry right now is their lease of their production facilities and the gang-busters real estate appreciation in the UK that makes that lease a costly proposition. Yes, that's speculation on my part, but if I were a betting man...

I think we can respectfully disagree. Ilford faces price pressure in a sense that will grow, from EFKE and others.

There was a 30%+ drop in sales in one quarter of 2005, IIRC and this did in a lot of the big companies.

But, only time will tell.

PE

 

[Photo Engineer]

Does anyone remember, as Henry Fonda used to say G-A-F.

How much R&D did they spend the years they were around.

Bob

All of the initial GAF research was done by Agfa. They were once Agfa Ansco. Later they became GAF. They did R&D that piggybacked on Kodak technology or on Agfa technology.

PE

 

[Photo Engineer]

PE: What do the powers-that-be at Kodak say about the future of the film biz? Can you believe what they say about this, with any certainty? Can Kodak, or anyone, make a profit and continue with film/paper/chems, or does everyone need to move on to digital and put all the old stuff in museums, or on e-bay? I hope it can continue.

Just my 2 cents, less taxes...

Paul

Paul;

I have no idea what Kodak thinks. I can give my own opinon. As long as motion picture remains analog, analog photography can survive. If there is a rush to digital motion picure, analog will decrease rapidly, especially color. Along with that, I expect E6 films to vanish first.

PE

 

[BobbyR]

I was recently at the Pavek Museum (a broadcast museum) and was in the back room speaking with a gent who was recopying old tapes.

When I brought up the topic of permanence (saying that from what I had learned and read, that starting with film, and vinyl, each new tech. was less stable for a increasingly short period of time)

He said I was totally correct and that one thing they do do is take old tapes and put them on new, China to the rescue by making tape to put it on, but he said compared to the analog, the new digital has serious problems.
It will simply go away and as short term, compared to film or vinyl that audio and video tapes are, the digital stuff has the life of Mayflies.

I mentioned what happened in the analog age when the US detonated a thermonuclear device over the west coast, and it suffered a massive black-out.
I asked what will happen if one or two air-burst took place ten miles over the US, anywhere, and he said it would make the West Coast black-out seem minor, whilst also totally destroying and eradicating digital communications and recording systems, those parts of the country without some analog form of communciations which can be reset like a breaker switch, would be permanently dumb and blind.

One good point, they would not need a land burst to kill people, an air burst would shut the country down and in the panic, in parts of the country would destroy itself.
Bobby

 

[Photo Engineer]

Bobby;

This is an old topic here about A vs D.

The only burst(s) that I know of were in the desert in the southwest. They didn't cause all of the problems you think.

PE

 

[aldevo]

I agree - buying $50.00 of Kodachrome to try an create a market is silly. On the other hand, if you're into it, I'd say buy and freeze as much of it as you can afford 'cause it's going to disappear soon.

I'd question the logic of that; what good will the film be if you can't get it processed?

There are plenty of fine E-6 products out there that are of very good quality and more readily processed. Use that $50 to find out which you prefer...

 

[roteague]

Bobby;

This is an old topic here about A vs D.

The only burst(s) that I know of were in the desert in the southwest. They didn't cause all of the problems you think.

PE

A nuclear detonation in the atmosphere is much different than a ground burst. Check out High Altitude Electromagnetic Pulse (HEMP) and you will see what I mean. The above poster is correct in his assertions.

 

[Photo Engineer]

A nuclear detonation in the atmosphere is much different than a ground burst. Check out High Altitude Electromagnetic Pulse (HEMP) and you will see what I mean. The above poster is correct in his assertions.

Bob;

I'm probably more aware of that than most having seen a real one, and a simulated one.

I was not disagreeing with him. It was only the point that these bursts in the southwest were on towers or underground for the most part and in some cases went virtually unnoticed depending on the type of burst. Complete reading of the subject matter will give mixed results.

Digital products are harmed by the EMP. I have posted in this regard here before and am familiar with it. The government of the US buys EMP hardened computers which have special magnetic shielding on the case and cables to minimize the effect of an EMP.

I say again....... Old topic.

PE

 

[aldevo]

Paul;

I have no idea what Kodak thinks. I can give my own opinon. As long as motion picture remains analog, analog photography can survive. If there is a rush to digital motion picure, analog will decrease rapidly, especially color. Along with that, I expect E6 films to vanish first.

PE

At least one stock analyst fears that EK is about to feel the onset of just what you are describing:

http://biz.yahoo.com/ap/071116/eastman_kodak_ahead_of_the_bell.html?.v=1

Thankfully, these analysts are often wrong. DV still largely sucks, particularly when shooting at night. I am not aware of any recent innovation that changes that.

If such a sea-change does take place I am convinced its sole motivation will be cost. One need only to consider the reason for Technicolor's decline as an example (though I'm happy to say that the process is still alive; if on a very small scale). Faster, cheaper uber alles I guess...

 

[CRhymer]

I'd question the logic of that; what good will the film be if you can't get it processed?

There are plenty of fine E-6 products out there that are of very good quality and more readily processed. Use that $50 to find out which you prefer...

I have to agree that storing Kodachrome is only going to be effective for a while. No one will will process it after Dwayne's stops - for all the reasons that PE has listed in many threads.

It is the end of E-6 which concerns me, not that I use a great deal of it, but it is not that easy to make one's own processing chemicals (although easier than Kodachrome). PE predicted this, and I am seeing E-6 labs disappear by the number. Five or so years ago I asked a dip and dunk lab in Edmonton, Alberta to do some 8x10 E-6. Their response - it won't be ready until after 5:00 pm. I talked to the same people 10 months ago, and they said they no longer do it (they may do 35 and 120). I ordered four E-6 Kodak kits through them - good service and price - to do my own in a JOBO. As far as I know there is a lot of E-6 film still produced, but the lack of labs indicates that use is falling off. I'm not gloomy about this, perhaps unconcerned but not indifferent .

Cheers,
Clarence

 

[Photo Engineer]

Clarence;

E6 is repeating the Kodachrome story that started in 1990. It is in rapid decline.

PE

 

[roteague]

I was not disagreeing with him. It was only the point that these bursts in the southwest were on towers or underground for the most part and in some cases went virtually unnoticed depending on the type of burst. Complete reading of the subject matter will give mixed results.

That is true Ron. We didn't do those type of bursts in the mainland US, although we did some altitude burts in the Pacific Ocean (Starfish Prime - 1962??). In a previous lifetime, I did HEMP analysis for the Air Force; which is the reason this caught my attention. And you are right, this is old news. If we had an incident like this, we would have a lot more to worry about than digital cameras.

 

[Photo Engineer]

How about operation IVY Bob. I saw the classified films of that one! WOW!

PE

 

[Schafphoto]

I was driving around Los Angeles last week buying up all rolls of HIE that I could get my hands on. When I heard a news story on the radio about how Ford is lowering production, etc, etc because of slow car sales, etc, etc. The part of the story that caught my attention was when the analyst said that the car models with a small demand... "WERE A DISTRACTION TO A COMPANY THE SIZE OF FORD". I immediately thought of Tech Pan, Panatomic-X, and now HIE.

(I'm going to start another thread about HIE storage and see if anyone has any ideas, see my other "HIE discontinued -Cold Storage options?" Thread.)

BTW, The USA street price for HIE seems to be around $12.50 now. (We'll see about next week?)

What is my price threshold? Probably $20 to $25 dollars a roll, but not only do I like the look of HIE... but I insist on printing it in my darkroom. Just like the hand full of guys that like the look of Kodachrome and still use a slide projector to look at the beautiful projections on the screen (the way the film was intended). To tell the truth, I would already be shooting digital IR if all I wanted was a 900nm response and didn't despise the act of printing on an inkjet printer. (I know, I know, they're fabulous now, great DMax and all that... still I hate the act, rather scrub a Dektol tray than clean a clogged inkjet any day... but I digress)

IMHO, a replacement film would need to be comparable to HIE, in sensitivity and ISO!!! (the competition is not) and work with a visible red 23,25,29 filter, and under $25. Clearly a niche market for a small photo company. They would hopefully be able to step off from Kodak's R&D for their own R&D. HIE is a 25+ year old film, that was developed from similar film stocks of yore, all invented before the age of computers, perhaps in an age when the coating equipment at Chinese and Soviet/Eastern European coating factories was created. (BTW, without a viable long term development/processing line in place for Kodachrome, I don't see a future at all, at least black and white Infrared film can be developed by anyone with a sink.)

I see no reason for Kodak to suddenly become responsive to "Distractions"... Not gonna happen, just like I'm not going to develop 5x7s in my 24 x 30 trays... it's a not feasible to scale a behemoth like Kodak down, They scrapped their 5x7 trays a long time ago.

Hey, how long has HIE been around in it's current formulation? Could it be the oldest unchanged emulsion still being produced? I saw the font for the edge numbers change a few years ago, but I haven't noticed a change in film emulsion for 20 years.

-Schaf
www.schafphoto.com

 

[JanaM]

I think we can respectfully disagree. Ilford faces price pressure in a sense that will grow, from EFKE and others.


PE

Hi Ron,

I think we can respectfully disagree with you here due to the facts. Efkes production volume is too low to hurt Ilfords sales. Only about 30 employees are still working at Fotokemika Nova, and they make only some ten thousands films per production run. That is real small scale production (they run a production which you said it is nearly impossible ). No danger for Ilford at all.

A little bit more problematic is the remaining stock of Agfa films. Still some hundred thousands are in stock. And Agfa APX 100 is sold at only 2€ per film in Germany, that is half of the cost of the Delta 100 here. And APX 100 is high quality stuff.

The danger for Ilford may be the high quality materials from Kodak with the new TMY, perhaps a new Fuji Neopan Acros 400 (they have the technology for such a film), and the new Rollei Superpan 200, which will be introduced next year (test samples are yet available in Germany).
And the prices of Kodak and Fuji BW films are significantly lower than Ilford, at least here in Germany. We can buy T-Max 100 and Acros 100 for only 3€ per film (35mm). They have been never as cheap as today.

Best regards,
Jana

 

[JanaM]

Paul;

I have no idea what Kodak thinks. I can give my own opinon. As long as motion picture remains analog, analog photography can survive. If there is a rush to digital motion picure, analog will decrease rapidly, especially color.

Ron,

I don't think it is simple like that, because only Kodak and Filmotec are dependent on movie film. All other film manufacturers are not, they are much more diversified.
And Kodak / Filmotec are currently dependent on movie film. But if ever the movie industry will completely transfer to digital (I doubt that), the process will take many years, so there is time to adopt and to reorganise production processes. In case of Filmotec there is probably no problem at all, because BW movie film demand is stable for years. Filmotec has found an attractive market niche.

Furthermore it is very likely that color movie film will stay for many years, because digital projection in cinemas is extremely expensive, and the cinema owners can't get any return on investment on their digital projectors, because they can't get more visitors by changing the way of projection.
Recently there was a very interesting report concerning this issue in a german film publication: To install digital projection costs more than 100.000 € per screen! So even in a small cinema center in a small town with few visitors a cinema owner has to invest over 500.000 €. Very high costs, but not more income. For most of the cinema owners it is impossible to make such high investments. Therefore they say the film release firms have to pay for this, but the release firms say no, the cinemas have to pay.
Therefore at least in Germany only very few cinemas have installed digital projectors so far. And they have them installed parallel to the 35mm film projectors, not as a replacement!

So even for a industrial country digital projection in cinemas is very or even too expensive. And now look at India ("Bollywood" is much more film consuming than Hollywood), China, Asia in general, Latin America, Africa. It is very likeliy that movie film with its low costs will be state of the art in these areas for many many years.

Along with that, I expect E6 films to vanish first.

PE

Probably transperancy films will be more a niche product than in the past.
I don't think that slide films will vanish, because it is a unique medium. It is impossible to achieve the strongholds and characterics of slide films with digital technology.

Best regards,
Jana

 

[keithwms]

I don't think that slide films will vanish, because it is a unique medium. It is impossible to achieve the strongholds and characterics of slide films with digital technology.

I agree with Ron, I think slide films and their complicated process are the most vulnerable to replacement by digital. The weak points of digital capture are highlight tolerance, range, and overall tonality. These are all strengths of print film, not slide.

N.b. I am not saying that digital is better than slide! And I continue to joyfully consume a fair quantity of velvia 100 and provia 400x... nothing has more impact than a nice slide on a light table! But people are getting trained to look at low-res monitors and projections