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Kodak Lagging in Digital World

Posted by michael on from the times-they-are-a-changin' dept.

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."

14 of 335 comments (clear)

  1. Film by October_30th · · Score: 5, Insightful
    With the ever increasing use of digital photography, I've become wary of the same problem that plagues digital media in general: it's so volatile.

    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
    1. Re:Film by Soruk · · Score: 5, Insightful

      Very good point. I make a point of archiving my photos to my fileserver which is regularly backed up to tape, and will be put on to some CDRs (or even DVD-Rs) when I've taken enough of them.

      The huge advantage over traditional film has to be that there was a significant cost overhead with traditional photography - if a photo didn't come out as intended that was money down the drain, so I very rarely dug out the camera and used it. With digital, if the image isn't as intended then nothing is lost, you can just delete it and try again. Indeed, you can just be trigger-happy and take multiple shots and just use the best of what comes out. And, once you've archived the photos, unlike a traditional film camera, you can erase the media and use it again.

      I know this seems obvious, but recently I was talking to someone who actually didn't realise this advantage over traditional film (and he spent nearly GBP1000 a year on film and development, with that he could have a top-notch digital!)

      --
      -- Soruk
    2. Re:Film by MisanthropicProggram · · Score: 4, Insightful

      I have a negatives of Great Grandparents. When I see digital media last that long, then I'll faith in the long term storage of digital. Also, you don't have to worry about technology compatibility with negatives. In other words, I'd be afraid in a couple of decades that I couldn't read my CD because the tech is obsolete.

      --

      There is no spoon or sig.

    3. Re:Film by archilocus · · Score: 5, Insightful

      Indeed, photography is 10% skill and 90% luck. You need the luck to capture the moment but if you don't have the technical skill with film you'll miss your opportunity. Digital gives you more opportunities for no additional cost.

      I'm a 'good' photographer and my hit rate has gone from maybe 10% per 'shoot' (roll of film) to 50% per shoot (full flash card).

      One important point that is overlooked is I get to post-process my own pictures with digital. That way, since I know what I was trying to achieve originally, I can rescue a less than perfect picture, where some ham-fisted instant lab operator would have torched it.

      --

      Don't look back the lemmings are gaining on you

  2. seems kind of narrow by ajagci · · Score: 4, Insightful

    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).

  3. creative destruction: changing markets by Reinout · · Score: 5, Insightful

    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
  4. They muffed it when they by advocate_one · · Score: 4, Insightful
    forgot to hit the market with high quality photo inks and papers for use in printers until it was too late...

    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.
  5. They have one thing going.... by evilviper · · Score: 4, Insightful

    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
  6. The "razor" business model falls down when by advocate_one · · Score: 4, Insightful

    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.
  7. Re:alas tis true by Aurix · · Score: 4, Insightful

    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.

  8. Re:alas tis true by Spy+Hunter · · Score: 4, Insightful
    I think Kodak is doing amazingly well for a company whose main product is on the way to becoming obsolete. They saw the digital photography revolution before it actually happened, and they took preemtive steps to transition their brand name into the new market. They realize that technology is fundamentally changing their entire market, and they are attempting to adapt instead of being dragged kicking and screaming into bankruptcy by the inexorable forward march of technology.

    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...

    --
    main(c,r){for(r=32;r;) printf(++c>31?c=!r--,"\n":c<r?" ":~c&r?" `":" #");}
  9. Not neccessarily Kodak's fault by ashot · · Score: 4, Insightful

    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
  10. But remember... by _PimpDaddy7_ · · Score: 4, Insightful

    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.

  11. The key to Kodak's survival is the brand by macwhiz · · Score: 4, Insightful

    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...