thoughts on the announced Kodak film price increase?

[Agulliver]

Yep, the global plague has caused massive issues across many industries. Several major car manufacturers have slowed down or temporarily stopped production of new cars because microchips they need are unavailable. I've been awaiting a new smartphone for three months, though it looks like they're finally in stock. Some raw chemicals are in very short supply resulting in price increase. This includes several materials used in manufacture of photographic film.

The problems are mostly plague related, but not quite as simple as often painted. Lockdowns occur in different locations at different times and with different results depending on what government support there is for those who are not permitted to do their normal jobs. In some countries there were good furlough schemes and other support which enabled people to await their industry to be allowed to restart, and saved most businesses from going under. In the case of truckers, some were able to keep trucking for supermarkets and Amazon while others found their usual work dried up. As most truckers (in the UK at least) are self employed, depending on how clever they thought they'd been with taxes etc, they might have needed to find alternative work. Some certainly sold their trucks and changed career completely. I know one truck driver who simply decided that the hours, time away from his family and unhealthy lifestyle were no longer worth it.

In many cases, manufacturing plants and factories had to close for periods of time. But a company like Kodak making film will pull in component materials from many different companies worldwide. Supply of said materials will be unpredictable and that's the last thing Kodak (or anyone) needs. Especially when one country/state might open up as another decides it needs to lock down, and vice versa. Just when the supply of Material X resumes, Material Y becomes unobtainable.

Didn't Ford suspend all new car production in the summer of 2020? I know used car prices have skyrocketed because of a shortage of several marques of new car. Tech has been hit hard by the slowodwn in chip production. I'm awaiting an order of mid level microscopes for advanced school use, and the supplier tells me they have no idea when as the factory in Germany has been in and out of restrictions due to covid.

Over in the cassette/tape recording scene, the price of magnetic tape doubled last year due to a shortage in supply of gamma ferric oxide caused by the lurgy. the fact that we ordinary mortals don't always notice these things is a huge testimony to the lengths to which big distributors and retailers go to, in order to satisfy our lust for goods .

 

[Sirius Glass]

This might be a dumb question but what supply issues?

I see Sony have stopped some camera production because of chip shortages and obviously there are shortages everywhere

Are people dropping like flies in china because of covid and its all just unreported or are some supply countries in heavy lockdown. I lost track of whats going on years ago

Off the coast of Los Angeles there were over 100 ships waiting to unload last month. Now it is down to 80. Normally it is less than five. Some of those ships have been there of over four months. There are many contributing to the bottleneck, shortage of truck drivers, railroad issues, ... but the result is long wait times, product spoilage and increased costs.

The inflation is high compared to last year, when the prices were really low so a more appropriate comparison would be to the pre-COVID prices but that does not sell news and news papers.

 

[Alan Edward Klein]

Off the coast of Los Angeles there were over 100 ships waiting to unload last month. Now it is down to 80. Normally it is less than five. Some of those ships have been there of over four months. There are many contributing to the bottleneck, shortage of truck drivers, railroad issues, ... but the result is long wait times, product spoilage and increased costs.

The inflation is high compared to last year, when the prices were really low so a more appropriate comparison would be to the pre-COVID prices but that does not sell news and news papers.

Your point isn't accurate. Prices were higher in 2020 Covid year by 1.53% over 2019 pre-Covid. There was inflation and prices went up last year despite the fact we had Covid.

I think you're confusing GDP which dropped last year compared to 2019 because so many people weren't working and we were producing less.

 

[Sirius Glass]

Your point isn't accurate. Prices were higher in 2020 Covid year by 1.53% over 2019 pre-Covid. There was inflation and prices went up last year despite the fact we had Covid.

I think you're confusing GDP which dropped last year compared to 2019 because so many people weren't working and we were producing less.

No I am not confusing GDP, I am looking at gas and diesel prices in California in 2019.

 

[Alan Edward Klein]

No I am not confusing GDP, I am looking at gas and diesel prices in California in 2019.

You didn't mention gas and diesel in your original post. You only said inflation. In any case, those are also higher today in California than in 2019 as well as 2020. General inflation is higher pretty much across the board by over 6%. Kodak is raising its prices 20% on Jan 1st. My lease on my car ends Jan 2nd and a similar new lease for the same latter model car is almost $200 more per month. It's nuts!

 

[Sirius Glass]

You didn't mention gas and diesel in your original post. You only said inflation. In any case, those are also higher today in California than in 2019 as well as 2020. General inflation is higher pretty much across the board by over 6%. Kodak is raising its prices 20% on Jan 1st. My lease on my car ends Jan 2nd and a similar new lease for the same latter model car is almost $200 more per month. It's nuts!

Here is a hot idea for you ==> buy the car, do not lease it. I typically own a new car for 10 to 15 years. I have a 1997 and 1998 that I still drive. Think of all that money spend on car payments that could have gone to buy film and Hasselblads, even Leicas.

 

[Alan Edward Klein]

Here is a hot idea for you ==> buy the car, do not lease it. I typically own a new car for 10 to 15 years. I have a 1997 and 1998 that I still drive. Think of all that money spend on car payments that could have gone to buy film and Hasselblads, even Leicas.

That's a great idea. But my wife who drives it no longer likes it and wants a new car. You want me to argue with her? Happy wife, Happy life.

On the other hand, I could buy it and sell it for more money and make thousands because used car prices have gone up a lot. That's another option. Right now I'm just extending the lease month by month until we decide what to do. I wish my old cameras went up in value as much as used cars have.

 

[Sal Santamaura]

...I typically own a new car for 10 to 15 years. I have a 1997 and 1998 that I still drive...

The day after tomorrow my 2003 Honda Accord will have been registered to me (purchased brand new, for cash) 19 years. With 233,000+ miles, it's still like new.

...Happy wife, Happy life...

My wife and I have been married 46 years. I don't buy that expression. In reality, it's "happy wife, catered to wife." Freud's question "what does a woman want" is easy to answer. "More" or "Everything." Unless she has independent means and will pay for it herself, getting her a new car because she doesn't like the one she currently drives, if it's running fine, is just dumb. My wife's vehicle was also purchased brand new for cash. It's a 2005 model.

My wife does have independent means and paid for her vehicle herself. She's smart enough to know that purchasing a new one now would buy her nothing but higher insurance/registration fees and more worry about door dings in parking lots. Smart woman.

 

[BrianShaw]

LOL. That 2003 car cannot be “still like new”… it’s “vintage mint” perhaps. Your wife… you are blessed.

 

[MattKing]

Sometimes thread drift can be truly entertaining.
At the risk of starting an argument about semantics, I'm not sure the price variability we are seeing now is appropriately labelled as inflation.

 

[markjwyatt]

I have not looked recently, but earlier this year, used car prices were sky high and new cars even more (because of the chip shortage, etc.). My daughter bought her leased car, and tehy offered $1600 to turn it in so they could have another used car to sell. I have never been offered tmoney to turn in a lease before.

 

[cmacd123]

the suply chain issue with Kodak of course is when they were making zillions of rolls of film a week, they were also able to justify making almost off of the inputs to the product. (chemicals, film base, even cardboard boxes) now they have to buy many of those things from a small number of suppliers, which can add extra costs.

 

[Sal Santamaura]

LOL. That 2003 car cannot be “still like new”… it’s “vintage mint” perhaps. Your wife… you are blessed.

Tomorrow I'll be thankful that you're still reading my posts, Brian.

 

[Don_ih]

So, every other film manufacturer also has supply issues and is raising their prices by 20%? Or do other film manufacturers have no problem getting supplies?

 

[AgX]

This is the weak point in the argumentation of Kodak Alaris.
Another weak point is that Kodak themselves gave up their autarky over the years by outsourcing elements their films and papers were made of.

 

[Don_ih]

They certainly have supply needs that b&w film manufacturers don't have. But a genuine shortage of supply would necessitate shutting down manufacture of a product, not just raising the price. It's been said by someone here that, when they make a particular film, they make a massive amount of it (because that's how their machinery works). If they can actually do that, that would suggest they have what they need. Film is not a commodity, so it should not have a variable price tag. It's highly unlikely they will lower the price in the event their supplies become cheaper (raw chemicals and materials are commodities). Most manufacturers will have reduced profits for a while rather than risk pricing their product out of competition.

 

[pentaxuser]

. Most manufacturers will have reduced profits for a while rather than risk pricing their product out of competition.

Mind you at a 20% increase across the board for all the good and service we buy, most of us, would I suspect, suffer a substantial drop in how far our disposable income stretched. I wonder how far our standard of living would decrease in terms of which former decade it would be the equivalent of?

I fear we'd be able to solve the Kodak excess demand v available supply of film situation quite quickly but what might this do for Kodak's viability?

pentaxuser

 

[removedacct1]

So, every other film manufacturer also has supply issues and is raising their prices by 20%? Or do other film manufacturers have no problem getting supplies?

Seems to me that Ilford has raised prices annually in recent years, increases that pretty closely match what Kodak has done/is doing. This isn't just Kodak, and it's not just about pandemic supply issues.

It was only 3 short years ago that I could buy a box of 8x10 FP4+ for close to $100. but today it lists at $160. for the same product. In the words of Jane Siberry "Speak a little softer, work a little louder. Shoot less with more care".

 

[Don_ih]

Seems to me that Ilford has raised prices annually in recent years

They have. So has Kodak. And shooting more carefully with less film is a strategy for the consumer to deal with higher prices, but it does not help the manufacturer, which has to produce a minimum quantity of film to be profitable (no matter what price). They fare better if the consumer shoots more film. There is a breaking point where the consumer buys so little film that the manufacturer can no longer make it.
Raising prices to cash in on increased demand is poor treatment of the people who have been buying through the lull in demand. How many people riding a popularity wave will continue to purchase film once the hype dies down? Everything that's "cool" today will be "quaint" in ten years.

 

[Alan Edward Klein]

I have not looked recently, but earlier this year, used car prices were sky high and new cars even more (because of the chip shortage, etc.). My daughter bought her leased car, and tehy offered $1600 to turn it in so they could have another used car to sell. I have never been offered tmoney to turn in a lease before.

My leased car is worth thousands more if sold as a used car than I would have to pay for the term lease price. The lease ends Jan 2nd. I'm going to talk to a dealer (any dealer) to see if they would offer me a trade in should I buy it and flip it. I'm wondering if they might actually shell out the purchase money to the leasing company and buy it directly so I could avoid sales taxes and having to come up with the money to buy it..

 

[pentaxuser]

Paul, does that mean we can expect much larger than inflation increases across all films from all makers for the future? This appears to be the unasked question in the famous KA interiew so I wonder does anyone know how much longer it will be before film price increases settle down to roughly the average price rises. I'd have thought that someone in Kodak, Ilford etc has done some work on this and might at least be prepared to say that with the caveat of "all other things developing as we expect them to do" what that timescale might be

I'd have thought that the continued uncertainly about where does it all end and where is the light at the end of the tunnel is something worth addressing, if not right now then as soon as feasibly possible

pentaxuser

 

[Alan Edward Klein]

They certainly have supply needs that b&w film manufacturers don't have. But a genuine shortage of supply would necessitate shutting down manufacture of a product, not just raising the price. It's been said by someone here that, when they make a particular film, they make a massive amount of it (because that's how their machinery works). If they can actually do that, that would suggest they have what they need. Film is not a commodity, so it should not have a variable price tag. It's highly unlikely they will lower the price in the event their supplies become cheaper (raw chemicals and materials are commodities). Most manufacturers will have reduced profits for a while rather than risk pricing their product out of competition.

But the film uses chemicals and other commodities that do vary in price, some going very high recently. Many factors go into pricing. They may be anticipating increasing costs next year and don't want to do another increase for the public.

Is the 20% their increase to their distributors, the final cost to end users, or what?

 

[Don_ih]

But the film uses chemicals and other commodities that do vary in price, some going very high recently.

That's what I said. But manufacturers need to be able to absorb some loss of profit if they want to maintain customers. Temporarily increased expenses should not translate into higher cost for end consumer - people react to higher prices by buying something else. 20% is a suicidal price jump for a product that no one actually needs to buy.

 

[Alan Edward Klein]

Mind you at a 20% increase across the board for all the good and service we buy, most of us, would I suspect, suffer a substantial drop in how far our disposable income stretched. I wonder how far our standard of living would decrease in terms of which former decade it would be the equivalent of?

I fear we'd be able to solve the Kodak excess demand v available supply of film situation quite quickly but what might this do for Kodak's viability?

pentaxuser

That is why inflation is so dangerous for the economy. Inflation (printing of money combined with deficit spending by the government and lower interest rates) reduces the value of money. That causes prices to go up. Demand for goods and services drop because people can't afford as many things. Their standard of living drops as they can afford less which reduces sales and profits. Lower sales mean layoffs because the company is producing less and needs fewer workers. That causes higher unemployment and lower GDP for the country and lower taxes collected by governments. Inflation sucks the lifeblood out of an economy and its people.

 

[Alan Edward Klein]

That's what I said. But manufacturers need to be able to absorb some loss of profit if they want to maintain customers. Temporarily increased expenses should not translate into higher cost for end consumer - people react to higher prices by buying something else. 20% is a suicidal price jump for a product that no one actually needs to buy.

Inflation causing companies to raise prices will cause many of them to go out of business as sales drop to a point where they can't turn a profit. Let's hope that it's not Kodak or other film manufactures.

Additionally you;re assuming price increase are temporary? They aren't usually. In the meanwhile, manufacturers are paying more. They have to recover those costs. Where do they get money to operate at a loss? In any case, if things do get better later, they could drop their prices just as camera manufacturers do all the time. But they're just lowering their profit margins. It has nothing to do with inflation or decreased costs. Of course, costs usually don't decrease because the basic value of a currency is less due to inflation. It's never gone down. The value of the dollar has always decreased making labor and materials cost more for the manufacturer. Those increases have to be passed on.