I think Kodak merely picked the wrong pivot. They thought they were a photography company, but they were actually a chemical company. There is plenty of demand for chemicals these days, and if they had stuck with that, they'd be doing fine. (I think these days they brand themselves as an "imaging" company, and they sell products like document capture systems. But that really makes them a software company, and I doubt they're doing great there. Document capture will probably be taken over by phones; Google is already playing with that and I'm guessing they have better software development teams than Kodak.)
Fuji was in a similar place, of course, but they were already making high-end cameras and they were selling well. I use a GW690ii from 1985 regularly and it has one of the best lenses I've ever used. They did not forget how to manufacture those over the intervening 30 years, and there is plenty of market for lenses. (Though I would still worry. Tiny cell phone cameras are becoming better and better every year, and that's really a function of the sensors, which they buy from Sony.)
Ironically, Fuji did kind of screw over the film photography community recently. They stopped making 4x5 Velvia 50. They stopped making Acros 100. Now everyone is using Kodak or Ilford film. But it's because they could afford to, getting someone to buy a new digital camera every couple years is way more profitable than making chemicals for a super niche industry. Kodak still doesn't understand that, but they do get some of my money as a result ;)
So they divested themselves of the profit making part of their business and doubled down on the generic, modularised part of the business based on technologies they had no advantage in. Nice!
What makes Eastman the spinoff and Kodak the "they" in your statement? The name? That should be 100% a branding decision, and presumably the Kodak name was more valuable attached to the mostly B2C camera business than to the mostly B2B chemical business. If not the name, then what is the token of "genuiness" that stayed with Kodak?
I’m going by the article. “Eastman Kodak spun off its chemicals business to help pay down debt.”
At the time the CEO was quoted “Mr Whitmore, who has been under pressure to restructure Kodak, said Eastman Chemical would be spun off as an independent public company...”.
Speaking as someone who had a second-row seat to Kodak's failure to meet the future, it was absolutely a case of stuck-in-the-past. The brass in Rochester just couldn't, wouldn't believe that the light at the end of the tunnel was a train, and they hobbled their own entries into that market at every turn.
I read somewhere, and sorry I don’t remember the source, that Kodak knew the digital future was coming, but they didn’t believe the speed with which it arrived. Kodak was one of the first companies with digital cameras.
Yep, but the CCD was made by Fairchild. The only significant value add that Kodak had to bring to the table - film - was absent. It's not as if CCDs weren't being used to capture digital images before Kodak. They didn't even invent the digital imaging technology in the device. All they did was package it in a portable system.
I'm not trying to trash the achievement of constructing that device, it was a marvel of engineering, but I think it must have created a misconception in the company that they had a special competence in this area that they really didn't have.
I remember Kodak supporters constantly turning to this as the reason why Kodak would succeed, while it was visibly failing. They did develop a CCD sensor business, but they divested themselves of it in 2011 as part of a strategy that "it would sell assets that are not central to its transformation to a profitable, sustainable digital company".
> They did develop a CCD sensor business, but they divested themselves of it in 2011 as part of a strategy that "it would sell assets that are not central to its transformation to a profitable, sustainable digital company".
If they hadn't made market strides with a CCD by 2011; I'm pretty sure that means they missed the mark entirely. If they had beat Sony's digitization of Minolta; or figured out mirrorless first would have been there best out prior to 2011.
Kodak was larger than the entire digital camera industry currently is, by almost 3x, $31 billion[1] in 1993 dollars which is 31 billion in 54 billion in 2018 dollars[2].
The entire digital camera industry was worth about 18 billion in 2017[3]
Even if they captured 100% of the market (which would have been basically completely impossible), it would have been a massive disaster for them as a company, and to the hundreds of thousands of people they employed in photo processing.
You're talking from an industrial perspective and the parent is talking from a user perspective. You're both right.
Smartphones replaced compact cameras for a huge portion of casual photographers but as you point out it's not like camera makers could easily pivot into making smartphones (some of them probably could have if they had anticipated the trend enough, but by the time the iphone came out it was probably already too late to catch up).
The point is that, if that $18B number includes phones, Kodak wouldn’t even be able to address that part of the market (as you pointed out), rendering the addressable market even smaller in comparison to their previous position.
That's probably true but good luck when your primary revenue source falls off an utter cliff which is basically what happened with film sales. You basically have to build a new $20 billion company within a few years.
Oh yeah I get it. They were in a tough spot. But they still almost went out of their way, it felt like, to screw with the parts of their business that were trying to save them.
The corporate structure was completely dysfunctional too. The company was basically a set of independent fiefdoms, and the CEO was completely incapable of reining them in. There were many times where the CEO would announce layoffs and the department heads just ignored him and headcount just kept rising. Great example of Parkinson's law in action.
Sadly a similar thing happened to Polaroid. They had some excellent chemists and from what I heard from former employees it that they where able to create almost anything.
> (Though I would still worry. Tiny cell phone cameras are becoming better and better every year, and that's really a function of the sensors, which they buy from Sony.)
Cellphone sensors are their biggest limiting factor. Specifically, the size. Apple already seems to have squeezed as much "photo" as it can out of its sensor+image processing combination, and is using its image processing for other things (3d photos, fake bokeh).
35mm is pretty much done too in terms of large advancements in basic photo IQ. Nikon's very first full frame camera (the D3) was already 90% of the way there, and for the last 10 years they have been squeezing that last 10% out. Fujifilm isn't even competing there - they have gone for a larger sensor out of the gate.
Fujifilm got billions of dollars in secret money from the Japanese government, and hide billions more on the books. This is Japanese culture, they would not let such an important company die.
On the other hand, sure Kodak died, but the Americans now have Apple and Google - while Japan doesn't.
>This is Japanese culture, they would not let such an important company die.
So like what those pesky Japanese did when they gave 1 trillion to the financial sector? Or 1 trillion to Detroit car companies? Or tons of subsidies in agriculture and across all kinds of sectors? Oh, wait...
Yes...and Samsung...the 2008 bailout of many American car companies...Trump using 'national security' in the trade war with Canada...Germany and VW...(nobody plays fair).
In the early 90's, when we were all using film cameras, everyone I knew, at least those who were pro or serious amateur/prosumers, used the legendary Fujifilm's Fujichrome Velvia 50 film. It became an instant hit because of its sharpness (fine grain) and color saturation that made us say "wow". It's hard to imagine what that's like, but think of it as having higher megapixels and better dynamics and great color. We used it especially for portrait/fashion and wildlife/nature. When it came out, a lot of us stopped using the classic Kodachrome/Ektachrome.
> used the legendary Fujifilm's Fujichrome Velvia 50 film
Velvia was the reason I found a Fuji developer studio in the first place - all cameras would take 35mm, but find a location which would develop it was a challenge of its own.
I'm not a big film photo geek (probably under 100 rolls over a decade), but once you found someone who could push/pull develop your colour film, that makes the choice of film sticky.
Came for the contrasts, stayed for the contrast fix-ups - once I found a place which did Velvia 50 & Ilford 50, that's all I bought.
That's one view. I honestly never understood the attraction of Velvia 50. I know it was beloved of people who were better photographers than I.But I'd use Kodachrome 25 (which had a similar effective film speed) any day.The greens and blues of Velvia always seemed fake.
In any case, both of those were niche films for pros and a few prosumers.
My, and most photographers I knew, reason for choosing Velvia was that you could develop it yourself. Kodachrome could only be developed by Kodak, but from what I've read about it, it was far superior in every other technical aspect. But not being able to control the push/pull of the development process really limited creative control over the whole process and was a more severe limitation than the higher resolution and color depth that Kodachrome provided.
The way I saw it, Kodachrome was more for consumers who just wanted to press a button and have it done. And Fujichrome was for people who took the process much more serious. Because they could do more with the "inferior" product than relying on the one-size-fits-all commercial process.
Well... When film was not a retro thing, I always preferred to use Fuji film over Kodak - the results were just better, with Fuji capturing the lighting the way I intended it to. It's not only that Fuji picked the pivot to digital and Kodak didn't, but it felt they were always committed to solve my problem rather than to milk me for money. Kodak was too comfortable.
> Retrospectively, Mr. Shih, the former VP of Kodak thinks that the company “could have tried to compete on capabilities rather than on the markets it was in” like Fujifilm did but “this would have meant walking away from a great consumer franchise. That’s not the logic that managers learn at business schools, and it would have been a hard pill for Kodak leaders to swallow.”
It's a classic case study best told in the book, "Who moved my cheese?" Walking away from the consumer business would have been an abrupt about-face and forced a massive shift within the sales and marketing teams... they very people responsible for maintaining the Kodak brand.
A problem that's alluded to in the article is that Kodak didn't focus on the high end of digital cameras nor in the sensors and components. So even as an imaging company they didn't understand that focusing on the low margin mass market they would be doomed eventually when cheaper mass market product would come out.
Kodak did have high end sensors. They just never developed them for mass market applications. Much of the satellite imagery on Google maps is via Kodak hardware.
It's scattered. Recently ~6 month old Velvia and Provia were selling for half price at one of the big NY retail outlets. Film Photography Project frequently has stuff thats expired. eBay has a lot, but it sells for way too much.
The death of film (and Kodak) is oversold though. There is still quite a variety available new, and Kodak Alaris still makes a bunch of their classics including TriX and TMAX100 and 400. TMAX P3200 and Ektachrome was just rereleased. Ilford has a lot of B&W films, Maco is manufacturing Rollei, Agfa, and other films. Foma, Adox are still making great films. Fuji has, sadly been scaling back, but they still make slide film and color negative film (and lots of instant film.)
Very few film cameras are made, mostly because there is a glut of used cameras that can be bought cheap, few manufacturers could compete (and volume would be very low.)
My hope is that at least for the foreseeable future, the film market has stabilized into something sustainable, since I love the film process and that's all I shoot.
Fuji was in a similar place, of course, but they were already making high-end cameras and they were selling well. I use a GW690ii from 1985 regularly and it has one of the best lenses I've ever used. They did not forget how to manufacture those over the intervening 30 years, and there is plenty of market for lenses. (Though I would still worry. Tiny cell phone cameras are becoming better and better every year, and that's really a function of the sensors, which they buy from Sony.)
Ironically, Fuji did kind of screw over the film photography community recently. They stopped making 4x5 Velvia 50. They stopped making Acros 100. Now everyone is using Kodak or Ilford film. But it's because they could afford to, getting someone to buy a new digital camera every couple years is way more profitable than making chemicals for a super niche industry. Kodak still doesn't understand that, but they do get some of my money as a result ;)