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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."
charging exhorbient prices for a camera dock which didnt work on different model kodak cameras when you upgraded. Compared to the others which charged a much more fairer rate for accessories which reflected their value/build quality, it comes as no surprise their marketshare is so low.
I have an old family friend that works as a chemist as Kodak and as i recall its been hard times for a while. For ages of course Kodak's bred and butter has been film and associated chemicals. With the masses switching and of course the long standing competition there is just less and less pie to go round.
Of course on the flip side Kodak does have some good r&d, and with the future of OLEDs and such there may yet be a future.
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
Any company that is large enough and is run by economists and overpaid suits long enough will inevitably run aground. This happened to Polaroid in the 1990s and IBM in the '80s, and indeed to Apple some ten years ago. It will probably happen to Microsoft one day soon. Today, the success or failure of a company is the focus it puts on technology, and the transformation of that technology into stuff they can sell. The masters at this right now are Apple, Canon and Sony, and yes, Microsoft. Many other major companies just don't have a clue.
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.
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.
That's why we have this handy thing called *backups*, something that is impossible with analog media (you will always have generational loss).
I have documents sitting on my laptop from the mid-80s and due to this sterling innovation of lossless copying I have never in all that time suffered a serious data loss. Every time I get a new computer, anything of importance moves across, and is stored at a minimum on two seperate hard disks and optical media also.
It's also a great advantage to be able to manage all of my digital information easily, and in one place. By contrast, I have both lost and damaged many negatives from only the last few years. Through my negligence, I will grant, but this never would have happened if they had been digital.
There is nothing inherent in digital media that makes it more volatile than analog media, and indeed the fact that it is digital, and thus allows perfect copies, makes the media ultimately irrelevant.
Analog photography is a trinity: Camera - Film - Paper. Digital photography drops that down to two elements, the camera and the film. Kodak's main business was the film, and that's just gone. They never had a strong camera division, actually, their cameras were pretty shit. I had contact with a couple of their P&S models and went running back to my Olympus Mju. The photographers I know who are still rocking film (which is all of them, because even if they're using digital as a 35mm replacement they're still using film for medium format) have all gone to Fuji. The only thing I see people buying from Kodak is paper.
It might be a matter of perception. Canon, Nikon and Olympus got it. They realized that digital photography is all about the camera. They were the camera companies, they capitalized on that. Kodak was just making... the stuff nobody cared about. 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. Hell, even when I'm taking photos on film, I develop and scan. And of course, I'm shooting on Fuji.
That's a revealing quote, and is the big reason behind Kodak's troubles for a long time, way before the advent of digital photography.
A couple of decades ago, Kodak was king of the market with its InstaMatic camera. It was widely popular, but the film cartridges it used were propietary. This meant Kodak had a lock on the market, and they made billions.
Then, 35mm SLRs became available to the masses. 35mm film had a slightly larger negative size than Kodak's film, which gave it higher quality. More importanty, 35mm was not a propietary technology so the film worked with cameras from any number of manufacturers, and the film itself could be made by anyone.
Kodak could not, or would not, adapt to this situation; and they've been looking for the next InstaMatic ever since. Next thing they tried was 110 film: smaller negative size, and still propietary. Serious amateurs, and pros, didn't go for it.
Then came several other films (like clockwork, every couple of years during the 80s there'd be some new "system" from Kodak with a new film format). The last one was, I believe, Advantix. The theme was always the same: Kodak wanted again to lock-in consumers with propietary films, and 35mm users weren't buying.
So all Kodak cameras since the InstaMatic have flopped. And thanks to open competition, they got their clocks cleaned on 35mm film by the likes of Fuji, etc.
So this is a company who still thinks it can capture significant segments of the imaging market by introducing propietary technologies. In the digital market it's obvious to the Slashdot crowd that won't work; but the point is, in conventional photo it also had not been working for a l-o-n-g time and Kodak cannot, or will not, see that. They are still looking for the next InstaMatic and that's going to kill them eventually. The company is still so huge that it will take some time for it to die off, but unless they change their whole philosophy, they'll be gone.
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
Visit the Kodak web site to see 14 megapixel digital images. The detail is amazing. You can see tiny white hairs on the faces of the models.
Presumably, in 5 years or so, cameras with this resolution will be inexpensive.
I'm a former Kodak employee. Kodak will be facing hard times for a number of years, but I think what people forget is that most of the bad press they are getting is because they cut their divident by 3/4 so they can reinvent themselves. All of the people who owned stock are incredibly pissed, and every analyst will never give a positive review of a company who does this, probably because they are heavily into that stock.
Kodak will probably turn it around, because 5 years too late they realized what digital will mean. Executives at Kodak were so far behind that all employees were laughing when they were still talking about film not going away.
That said, Kodak is finally realizing that it needs to turn things around. The company will be much different in 5 years, but they are so far behind with their organizational structure drastic measures need to be taken.
Anyway, so what does Kodak do when it is trying to evolve into a technology services company rather than a manufacturing company? It lays off hundreds of young, agressive, future-minded people like me who are steeped in technology and keeps the slew of white-haired oldsters incapable of realizing what real change is about.
So the old time corporate culture of the good old boy's club still exists, and the company won't move on until the morons at the top realize this. Dan Carp (CEO), you better get your crap together.
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.
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...