The facts of film production

[Photo Engineer]

I thought it might be useful to make some statement of the problems facing analog film producers in general.

Let us take a hypothetical film that is made once a year in a 5000 ft roll, and that roll will supply the entire world demand for 1 year. Let us assume it keeps on our shelf for 2 years to give the film a reasonable lifetime when it gets into customer hands.

Year 1, we sell a whole roll and so year 2 we make another roll. At the end of year 2, we find we have 1/2 roll left, but what the heck it lasts for 2 years and so we do not coat. Instead we schedule a full roll for year 3.

Year 3 arrives and we find that due to a decline we have 1/4 roll left and it is now bad. So, we have discovered that it takes 3 years or more to sell something that used to move in 1 year, and which goes bad in 2 years.

What do we do?

Well, this is the question now faced by Kodak with 2 major products, namely HIE and Kodachrome. They cannot sell a full production run in the time it takes for the stored raw film to go bad and so the remainder is scrap and must be destroyed. Production costs are greater than profits on this type of operation and therefore the product must be cancelled. There is no other choice.

Of course there are a lot more factors that go into this, but here is a simple case for you to understand, and remember that Ilford also makes film in 5000 ft rolls (approx) and at about the same width and are therefore faced with the same analogy. Analog products spoil on the shelf and in the cold store.

If you work backwards from this too, lets look at the IR sensitizing dye which is very expensive. It also spoils and so as demand goes down, the remaining dye which is not used for production goes bad and the same is true of the raw emulsions in storage, the Kodachrome chemistry on the shelves waiting to go to Dwaynes and etc. It is like our ecology and we are seeing a major cool spell which is killing things off.

This is not meant as doom and gloom, but it is Darwinism at work in a sense in that the fittest will survive.

To give an analogy, Digital can replace reversal films and IR films more easily than negative, motion picture and etc, and so it is hurting most in those areas where it can compete.

I hope this helps explain what is going on behind the scenes a bit.

PE

 

[PHOTOTONE]

The big problem is having to coat and store so much material. I wonder if it would be economically possible to make a smaller coating line for low-volume goods..even if they had to be sold at much greater prices? After all, the film cassettes, film boxes, etc., particularly with Inkjet labels, could be used across a wide variety of low-volume products with just a change in what the printer prints on them.

 

[pentaxuser]

Thanks. Interesting. Continuing the analogy with Ilford, it seems to be the case that SFX is made once a year and when it's gone it's gone. There is the risk in this which you mention, of over producing.

Ilford have decided to go ahead and take that risk. Kodak have decided against it. What is the difference? Is it simply that one is a bigger risk taker than the other or are there other factors at play.

Could Kodak simply eliminate risk by scaling down production so much as to be almost certain of failing to meet demand fully and avoid the loss? OK it fails to meet some demand and turns some consumers off but it maintains a place in the IR field and I would have thought that it could have predicted demand based on trends such that it nearly gets supply and demand right.

Of course it might be that the Kodak economies of scale mean that demand has already dropped below the minimum required but on its previous scale that may have applied to Ilford before it became Harman and scaled down.

If demand for say Kodak colour neg was higher than supply and at the same time demand for HIE was below what's required to be profitable then I could see the case for switching resources from HIE to colour neg but I don't think this is the case.

I cannot square the circle to account for Ilford's decision to scale down SFX but continue its production once a year to satisfy consumers and also make a profit and Kodak's decision to discontinue. In the worst case scenario Kodak may be too big to make any profit on any line and large scaling down is inevitable but if that is the case then some jobs and profit are better than no jobs and profit which might happen if it drops product lines that would help it in the future scaled down version of Kodak.

What am I missing in the economics of film production?

Thanks

pentaxuser

 

[Photo Engineer]

Ok, two things here. First, Kodak is taking a risk because some of the products are already losing money. Paper was a past example where the losses became so great that they had to finally stop.

Second, Kodak is already using 100 L and 10 L facilities and narrow width machines for some small product lines. IDK about Ilford, but they may be already.

There is a limit to scale down, just as there is a limit to scale up, and every change in size takes engineering to make sure it works. So, the price goes up. Would you pay $10/roll of 35mm B&W? Or maybe $20? IDK what would happen but we are on a knife edge and profits are still plus.

Of course, as I said, these limits apply to Ilford and Fuji as well.

Remember that the big shock in 2005 when products declined 4x what the models predicted caused problems for Ilford and Agfa both.

PE

 

[SuzanneR]

It's always sobering to read your posts, Ron. I'll still buy film until I can't...

 

[Paul Howell]

The alternative model is EFKE and Forma, maybe Salvic, less than a few hundred employees, small runs a couple of time years, inherent issues with quality control, and midpoint price.

 

[Wyno]

The sad fact is that here in Australia, Ilford black and white film costs me $10 a roll (and that's with a discount). I'll pay what I have to, to keep getting film.
Mike

 

[Paul Howell]

The sad fact is that here in Australia, Ilford black and white film costs me $10 a roll (and that's with a discount). I'll pay what I have to, to keep getting film.
Mike

How much of the $10.00 is tax?

 

[roteague]

The sad fact is that here in Australia, Ilford black and white film costs me $10 a roll (and that's with a discount). I'll pay what I have to, to keep getting film.
Mike

Try buying a roll of Velvia if you really want to shocked - the reason I always bring plenty with me from the US.

 

[Curt]

There is a limit to scale down, just as there is a limit to scale up, and every change in size takes engineering to make sure it works. So, the price goes up. Would you pay $10/roll of 35mm B&W? Or maybe $20? IDK what would happen but we are on a knife edge and profits are still plus.

Would you pay $5.00 a gallon for gas, how about $10.00? How many will be endlessly driving the back roads of the World looking for photo opportunities Like Weston and others? Add it all up and it looks very disappointing, what will the last film based photographer look like?

 

[Photo Engineer]

Well, considering that all of analog photography is based on organic chemistry for imaging (color and B&W), as oil prices go up, so must film prices.

Can we continue to justify expensive hobbies like photography in the face of decreasing resources? Just a rhetorical question but when one is starving, who thinks of art? This is something we may all face in the next 100 years or so.

PE

 

[rusty71]

That's useful info. I bet Ilford does a smaller run of SFX than 5000'.
I suppose the answer is buy as much film as possible whenever possible.
I think when Kodak raised the price of HIE to around $17.00 per roll US they hit a market threshold. That means a lot of people like me, bought less and also bought new old stock on the cheap. We may be seeing that price threshold come into play and kill off film ever faster.

Another factor is the rising price of silver on the market. Look for very large increases in prices next spring if the precious metals market stays high.

Efke and FOMA have managed to fill a gap left by AGFA and Ilford re-branded products. However, if quality control problems keep popping up, those films from EFKE and Foma will start to lose market share.

Right now it looks like film availability is teetering on the edge of a cliff. The best advice for all of us is to buy and use more film. Get someone else interested in photography too! Already I'm encouraging several ex students to shoot a roll of black and white for old times sake!

 

[pentaxuser]

Would you pay $5.00 a gallon for gas, how about $10.00? QUOTE]

Just a piece of information. About $10.00 a gallon is what we pay in the U.K. Almost all would argue that gas is an essential part of their lives i.e. life, as they know it, would break down without it but that's only partly true. Most of our travel is a luxury. We'll pay almost anything for the ability to chose where we go and when. It's seen as freedom and independence. Sky's the limit on what we'll spend as a portion of our income on such a precious luxury.

pentaxuser

 

[David A. Goldfarb]

Isn't SFX a repurposed traffic surveillance film? That could account for their ability to produce it despite a small market.

 

[dslater]

Hi Ron,
Here's what I don't really understand - why is it such a great engineering challenge to put say a 2500 foot roll on instead of a 5000 foot roll? After all, once they're half way through, that 500 foot roll only has 2500 feet left on it.

Thanks,

Dan

 

[Photo Engineer]

Dan;

There is the problem of the volume of the tanks feeding the machine, the amount of emulsion that must be made in the first place, so a lot of things factor into it. However, you are right and many products are made on the 21 machine (21" wide) at slower speeds. So they have been scaled down.

But here is the catch 22. Having lost 90 of the business (all analog companies share in this), where will the money come from to pay for the engineering to scale a batch of emulsion down from 1000 L to 100 L or to 10 L? Remember, the emulsion has a keeping problem along with the rest of the chemistry. So, EK has to make the optimum quantity to match production with a minimum of waste.

If you have an orchard with 1000 bushels of apples as yield / year, then if you only have customers buying 100 bushels / year, it is harder to adjust than if it is beans or corn. You can replant those, but trees take years to grow. Well, it took years to 'grow' this production facility and it will cost money and take years to shrink it down, but there is no money. They need the money as profit to invest in shrinking, product improvement, and digital. All three of these are taking up the resources.

We see new products coming out the door, and slow moving items are vanishing from the market. The strategy is there, and it is virtually their only option left. And while doing this, the quality has to equal the quality you have grown to expect from Kodak.

PE

 

[fotophox]

Two questions:

1) Are View-Master reels still made using Kodachrome?

2) I should already know this, but how many feet are in one 24-exposure roll of 35mm?

 

[Snapshot]

Based on what I've read in this thread, it seems we should be thankful for the film varieties we have left rather than lamenting the ones we lost.

 

[fotophox]

Everyone, buy $50 worth of Kodachrome RIGHT NOW.

Not next week, not next month, NOW.

It doesn't matter if you don't normally use it. JUST DO IT.

What good will that do? I don't know, but at least we will have TRIED.

 

[tim_walls]

Everyone, buy $50 worth of Kodachrome RIGHT NOW.

Not next week, not next month, NOW.

It doesn't matter if you don't normally use it. JUST DO IT.

What good will that do? I don't know, but at least we will have TRIED.

Playing devil's advocate somewhat - but only somewhat - I can't help thinking in the long term we'd all be helped more by buying $50 of the new TMax, or Velvia, or whatever, than Kodachrome.

It seems rather disingenuous to go out and buy a product that you don't use just to 'prove' there is still a market for it. If there isn't a viable market then, well, there isn't a viable market... I'd rather spend my money supporting the products I do use than trying to prop up one which I don't and which is clearly so far gone it's beyond rescue.

 

[fotophox]

I should emphasize that you should USE it as well. And have it processed. . .duh. . .

 

[Ken Nadvornick]

Everyone, buy $50 worth of Kodachrome RIGHT NOW.

Wow. For once I'm ahead of the curve!

I just did purchase $50+ worth of Kodachrome from Dwayne's a couple of weeks ago. Nothing else like it. A company (and era) defining product like no other.

A roll of K64 in my pristine, vintage early Nikon F2 together with a day off and nothing else to do? It doesn't get any better than that.

I know, I know. Dollars and cents, dollars and cents. But I have become weary of constantly having Life abruptly truncated by that metric. Discontinue Kodachrome and one may as well just shoot both Mom and her apple pie and be done with it.

Ken

 

[tim_walls]

I should emphasize that you should USE it as well. And have it processed. . .duh. . .

But that's my point; I don't want to use it. I'm lucky enough to be young enough to have no nostalgia for it, in which case there seems to be precious little reason for me to go out and buy an expensive film, which can only be processed slowly by one (apparently unreliable) lab in the world, which uses environmentally hideous chemicals, which is a pain to scan, and for which there are readily available (E6) and in many ways better alternatives.

It seems to me Kodachrome has been moribund for years - it isn't dead because of 'digital' or some other bogeyman, it's dead because it was replaced with film (E6 and its predecessors) which most of the market considered to be a superior product (taking 'superior' to mean, 'on the balance of a variety of practical and aesthetic considerations.')


Tell me again why I should spend $50 propping up this particular dead horse so other people can flog it, when I could spend the same $50 on TMax or Ektachrome. Proving there is a viable market for those products by buying them is more important to me than trying to 'prove' there is a viable market for Kodachrome when there clearly isn't. I'm afraid my wallet is a zero-sum game - money I spend on Kodachrome is money I'm not spending on something else which I'd be far more inconvenienced by the loss of.

 

[dslater]

Dan;

There is the problem of the volume of the tanks feeding the machine, the amount of emulsion that must be made in the first place, so a lot of things factor into it. However, you are right and many products are made on the 21 machine (21" wide) at slower speeds. So they have been scaled down.

But here is the catch 22. Having lost 90 of the business (all analog companies share in this), where will the money come from to pay for the engineering to scale a batch of emulsion down from 1000 L to 100 L or to 10 L? Remember, the emulsion has a keeping problem along with the rest of the chemistry. So, EK has to make the optimum quantity to match production with a minimum of waste.

If you have an orchard with 1000 bushels of apples as yield / year, then if you only have customers buying 100 bushels / year, it is harder to adjust than if it is beans or corn. You can replant those, but trees take years to grow. Well, it took years to 'grow' this production facility and it will cost money and take years to shrink it down, but there is no money. They need the money as profit to invest in shrinking, product improvement, and digital. All three of these are taking up the resources.

We see new products coming out the door, and slow moving items are vanishing from the market. The strategy is there, and it is virtually their only option left. And while doing this, the quality has to equal the quality you have grown to expect from Kodak.

PE

Hi Ron,
Thanks for the explanation - that makes sense to me. One thing that just occurred to me is this - why does Kodak still produce Professional films like Portra? Surely the demand for Portra is much less than for the consumer films like Gold and Ultra-Max. On that note, how do the Kodak consumer films compare to the professional films?

Dan

 

[Wyno]

Hi Paul,
the government charges import duties (not sure how much) but there is no sales tax or GST on traditional photography products. I'm not sure if there is GST on digital stuff.
Mike