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Kodak Lagging in Digital World
mattmcal writes "Wired reports on the Kodak's struggle to survive and Mark Glaser comments on their demise at The Industry Standard saying that Kodak failed to take digital photography seriously, or at least failed to find a way to successfully transform their business. The Photo Marketing Association reported that in 2003, digital cameras outsold analog. Kodak's stock has been hovering near its 20-year low. Finally, today, the Asian Business Times reports that billionaire Carl Icahn sold all his shares saying the current business model there doesn't work."
Properly stored original film negatives last decades, whereas digital media is gone in a blink of an eye when your harddrive/memory card breaks down or you accidentally erase your media.
It's the same thing as with e-mail. I routinely print out all my e-mail correspondence (sent and received) these days because I've lost my mails too often.
The owls are not what they seem
Yes, film is pretty much doomed (except for niche applications). But Kodak has seen this coming and started preparing in time. I think among old companies that needed to transform themselves, Kodak has been doing pretty well: their digital camera lineup is decent, they have done some nifty stuff with OLED, and they still have lots of non-consumer products that probably make them money. They also were one of the first companies to actually sell digital cameras widely. Kodak isn't a hot company, but give the guys a break on this one--they haven't been blind and they have been trying to go for the new market.
What is really dragging Kodak down is their brand name--some companies have a brand name that stands for innovation, and they can put out any kind of garbage and people will think it's the latest and greatest thing. Kodak, on the other hand, can put out a really nifty digital camera and the stale odor of photographic fixing solution clings to it in the mind of buyers (yes, including my own).
A 1942 book by Joseph Schumpeter (excerpt here) provides some background info on this.
[Capitalism] incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in....
The idea is that capitalism and innovation are almost linked. By doing something better, handier, cheaper, you can make more money than the other companies. So there is an incentive to do something new.
Seen over a long time, the biggest threat for companies is not so much the competition in the existing market, but the landslide next year when something entirely new just chops down existing, nicely ordered, markets.
Digital photography is such a "creative destruction" development. Suddenly the demand for ordinary kodak camera rolls drops down. Not even the best product in it's category will sell really well when the entire market moves to different products. (Kodak is not just camera rolls, also photographic paper etc, but this is the general idea).
An historical analogy: the dreadnought was the first all-big-gun battleship, completed in 1906. Great Brittain and Germany (and others) were engaged in a huge shipbuilding arms race. A lot of "ordinary" battleships were being build (one year later they were called "pre-dreadnoughts"...). That one single first dreadnought, prototype of the modern battleship, made every single fleet on earth obsolete. Brittain and Germany effectively had to start from scratch, 0 vs. 0. (Or, more rather 1 vs. 0 :-) Talking about creative destruction...
Reinout
Reinout van Rees
the printer manufacturers got their act together first... after all... when faced with the choice of the right paper and cartridge for your photos, you go for the printer manufacturer's first...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
The one thing Kodak has, which I haven't seen from any other company, is kiosks in drug stores that will take any digital media (CompactFlash, SecureDigital, Memorystick, CDs, etc) and for about 30 cents will print out a 3x5 picture.
Solid ink (wax), and color laser printers require quite a large investment ($1,000+). Quality inkjet printers cost $100+, and ink is notoriously expensive. Not to mention problems with ink spots, clogging, etc.
So these kiosks are probably the best thing to come along for those that don't do a huge ammount of printing, but want a few digital photos in a good quality, physical form. So, that's one place where Kodak has a foothold in an up-and-comming market, and could continue to expand on it for a while (different size prints, etc). No other companies appear to be taping this potentially major market, so they've got a good position. It may not completely make up for loss of film sales, but it is a good money maker, and they should be able to live off of that for quite a long time.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
someone comes out with a concept that makes your razor blade obsolete... the same thing has happened with Kodak and Polaroid... they only made their cameras to sell film, paper and chemicals. After all, you buy one camera but buy lots of film and chemicals/paper (when you get it processed even if with a one hour lab)... they just didn't react to the new paradigm that rendered complex proprietary film and chemical processes obsolete...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
Wouldn't it make sense to make a business model of producing physical copies of these digital photos?
I mean, somewhere or other, everyone wants a decent glossy copy of their perfect digital photos... Kodak just needs to really tap into it.
They could have done it better, of course. Right now they are focusing on using digital cameras exactly like film cameras: making prints and organizing photos into albums for storage. Digital photography can be so much more. They should be focusing on the things that can be done better with digital photography: photo editing and distribution. They should offer a web hosting service for individual pictures or complete albums, and their camera software should come with extensive photo editing capabilities. (also it shouldn't suck quite so much). But there's a lot of inertia in a company like Kodak, and it's amazing that they've been able to adapt to changing technology as much as they have. Certainly better than some companies in other industries I could name...
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I can't believe noone has mentined this. I don't think this is a matter so much of Kodak's failure as it is the success of Canon. In fact, despite the new huge market, all companies are having trouble competing with Canon; they have dominated the entire field, particularly in the upper end DSLR field. As was stated earlier, Kodak has primarily a film company, so it has had to scramble (due to the shrinking of the film market) to compete with other companies that were already in the business of making cameras.
-ashot
They have patented CMOS technologies that are used in MANY digital cameras from different companies.
I wouldn't say they are finished. Their most recent cameras are pretty nice quality.
This means changing what Kodak is about. It's not changing your "business model."
At least, if I got you right, you expect Kodak to either get involved in home printing -and they're going to challenge Epson/Seiko and all the other heavyweights how exactly?- or professional printing, which of course has its heavyweights too.
What Kodak need to do is either do some heavy R&D and convince consumers they need it or tap into the current market they were so aggressively almost pushed out, by employing the same (if not more) aggressive tactics.
/. Where the truth
> Analog photography is a trinity: Camera - Film - Paper. Digital photography drops that down to two elements, the camera and the film.
> It might be a matter of perception. Canon, Nikon and Olympus got it. They realized that digital photography is all about the camera.
Well, there's a third element that I take into consideration (you may care less if you're in the tourist point-and-shoot set, or maybe not) which is the optics. Optics are in some way keeping me in film. Like you, I shoot in film and then scan a lot of stuff in to work with.
I have a (for me) significant investment in lenses. No matter how fine your film grain, no matter how many MPixels, you're still limited by the quality of your lens. The thought of pitching all that hardware is, for me, painful. I'm waiting for the D-100 body to come down in price enough for me to use the lenses I already have. Quality optics are not cheap, and whatever camera
I have, I will want the ability to make decently large prints. 8x10 is a minimum, I'd prefer 11x14 or larger. I realize most people want a 5x7 that they can crop and put in a scrapbook, and that's where most of the market is going, but I'm going to be realistic about where I am, as well.
Producing prints in analog is expensive. A scanner that can do several thousand dpi is cheaper and more versatile than a good quality enlarger. I can use the scanner for other things, and it takes up a lot less space. (Not to mention, I can have sunlight in my office when I use the gimp!) I still have to use a darkroom to get bigger prints, although I drool at the larger inkjets every time I go to Microcenter.
With the B&W market, Kodak still has a good solid foot in the door. And B&W will probably be the last up against the wall for the digital revolution. IMO, It's hard to beat their TMAX either at 400 or 3200. I shoot mostly Kodak B&W. It's financially tractable for me to process B&W in my basement, walk the negatives over, and scan them. That will give me an outlet till I save up for the digital that talks to my already existing hardware.
> What part of digital photography finally makes its way to prints anyway? I've never had a photo printed, just share all of them among friends via the net.
I like having the odd print hanging up around the house, or to give hardcopy to $SIBLING to display. We're not quite to the point where we can all have fancy LCD frames in the living room alternating between displaying Magritte paintings and my best digital prints. (:
> Hell, even when I'm taking photos on film, I develop and scan. And of course, I'm shooting on Fuji.
For color, I also shoot Fujifilm, but Kodak has already lost most color customers to digital anyway. They can't be counting on color film at this point for much of anything. They've brought out that C-41 B&W film to try and get people to buy film, but I won't use it. It's the same price as color, and has the same orange tinting to the negatives as color film, an added pain when I'm scanning them in. I'd be really suprised if it gets them anywhere.
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The biggest thing that Kodak has going for it right now is the name "Kodak." It's synonymous with photography. Everyone knows what a "Kodak moment" is. There's no such thing as a "Fuji moment" or an "Olympus moment."
That said, Kodak hasn't leveraged their name very well. They were slow to produce an inkjet paper for photos. "Printed on Kodak paper" has long been a focus of their advertising as a source of quality. Getting a slice of the home consumables market should've been a no-brainer, but I think they waited too long on that one.
What's worse is that they waited way too long to get into the digital "film" market. It was just last month that I first saw a Kodak-branded memory card for sale at a local drugstore. That should've been a total no-brainer. For anyone over the age of 40, given a choice between a brand you'd never heard of, and Kodak... which memory card would you buy?
Heck, they let Lexar get away with trademark dilution. For a while now, Lexar has been selling their memory cards in Kodak-yellow packages that are about the same size and shape as a Kodak retail film box. It confused me a little when I first saw it... a less technically-astute and observant person might easily think it was a Kodak product.
Others have commented on Kodak's "Gillette model" business plan, making money on the consumables. There's still money in digital consumables. Kodak's brand name should give them a huge chunk of the market, if they don't muff it up. So far, they've conceded that market by default, I think...