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The Rise and Fall of Kodak
H_Fisher writes "Michael Hiltzik of the L.A. Times writes with a frank look at the decisions and changes that have led to Kodak's decline from top U.S. photography company to a company whose product is almost irrelevant. He writes: '[Kodak] executives couldn't foresee a future in which film had no role in image capture at all, nor come to grips with the lower profit margins or faster competitive pace of high-tech industries.' He also notes that Kodak's story comes as a cautionary tale to giants like Google and Facebook."
I wrote an article about the impact of Kodak on Rochester, New York, the city it built. Some interesting context about how technology built a city - twice.
go get it
Kodaks whole business was founded on film development. The whole idea was that they sell the cameras cheap and charge for the development. Was that way going back to the glass plate days. Simply put, they where rendered irrelevant by digital photography which is the exact oposite market. Expensive cameras, free "film". While its sad to see them go, they are more or less a lost cause now.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
The paper industry is feeling the pinch, too. Newspapers are dying, and paper mills are closing. The latest generation of computer users feels little desire to print anything. The paper industry had a "put it on paper" promotion. That seems to have disappeared.
Paper requires an infrastructure. In business, paper implies filing, filing cabinets, folders, record storage, file clerks, trash cans, shredders, staplers, paper clips, paper recycling, and other cost items. This not only increases cost, it increases head count and makes outsourcing and offshoring harder.
Printed forms are really expensive. Someone has to fill them out, they have to be moved around, sorted, and filed. and probably entered into into a computer at some point. It's been a long time since a forms manufacturer could advertise "the world is run on tracks of printed paper".
There are still many businesses with a lot of legacy paper, but the trend is down.
I want to say I enjoy slashdot as one of the few sites actually implementing a nice and full threaded discussion system. We aren't talking about obsolescence, but rather a preference. Too many discussion systems either reorder posts, support no or one level of reply, and other such silly limitations.
Aside from that, the quality of commentators tends to be higher. More often than not, someone related to or very keenly aware of the subject of a story chimes in with additional data whereas most other forums explode in a barrage of inane chatter, trolls and woefully misinformed people. Yes, slashdot is subjected to that as well *but* if we are grading on a curve here, slashdot's community comes out pretty good.
XML is like violence. If it doesn't solve the problem, use more.
No, they didn't make the first DSLR 20 years ago. What they did was basically sell an add-on that attached to your Nikon SLR to make it digital. Kodak never made any DSLRs themselves; they were always digital backs, or based on Canon or Nikon bodies, or sometimes just rebranded Canons or Nikons.
There's a huge market for camera components. Film is dead (at least for stills, film is slowly moving that way), but the DSLR market is alive and well, and companies like Sony are making a fortune selling camera modules to go into the iPhone and other devices.
Kodak could have been selling millions of mobile camera modules, or competing with Nikon and Canon for the high-end, but they're not.
And ironically Kodaks business plan of sell the camera for cost and over charge for the film is alive and well in the printer/ink business.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
The ironic thing is that Kodak pretty much invented digital photography long before it was practical to implement as a consumer product. They probably had the closest thing to genuinely inventive patents. Although it would have been a tragedy if they were able to set back the industry like Apple wants to.
A Pirate and a Puritan look the same on a balance sheet.
From my perspective, they played very little part. The signs of digital's dominance have been around for a decade, at least..
Real, trained, professional photographers adopted digital photography as early as 2000. It meant they could take hundreds of pictures of an event, with practically no overhead cost. An assistant could pick out the few not-terrible shots, and they would be sent to the traditional lab (or a minilab) for printing.
The first megapixel cameras were still slower than film cameras, so a good photographer going to an event (such as a wedding) would have a digital camera on hand for routine use (like taking pictures of the bridal party, preparations, and decorations), but still keep a film camera loaded and ready for moments of action (like exchanging rings), hoping for that perfect shot when something spectacular happens (like when the groom goes diving for the falling ring).
Photography (when done well) is a fast-paced and high-risk business. If a wedding photographer misses some special moment because they were reloading a camera, they can and do get sued. When digital became even remotely practical (several thousand dollars for a 2-megapixel DSLR), professionals jumped at the opportunity.
That improvement didn't come without its own problems, though. Many labs couldn't handle the differences in workflows, and that drove up their prices. Now, lab prices aren't very high compared to photographers' rates (about $10 for an 8x10 with finishing coat and manual retouching (which will be the comparison henceforth), compared to the $20-$50 that the photographer will likely charge), but the lack of integration also meant that orders often were lost, delayed, or damaged, and storing several gigabytes of pictures (at $10/GB) for each event was impractical for a small studio. As workflows, cameras, and hard disks improved, film became less important as a fallback, and digital was very clearly the future.
The next major change came in minilabs. I've mentioned them in passing already, but they deserve more discussion. As also mentioned, a full professional lab could produce an 8x10 for $10. That involves having several people preparing the film (or disk), moving it between chemical processors (or workstations), darkrooms, and printers, sitting at desks painting the white spots where dust prevented the paper from being exposed, spraying the print with any of several finishes, and eventually packaging the whole thing for shipping. A professional lab could easily fill a 30,000 square foot building. A minilab does the same job in a 60 cubic foot space. It's what you'll see in the back of a Wal-mart or pharmacy photo department now, but back in 2000 their quality was still catching up to the full capabilities of a professional lab. It cost about $0.65 for that same 8x10.
The "photogs" I see now are working in a different sort of industry. Sure, they can press a shutter button and arrange a decent shot, but I often question their ability to anticipate the "Kodak moments" than make photo albums entertaining. Many will take pictures, and provide the digital copies, but don't understand how artistic retouching and finishes can improve an effect. Sure, there's a lot of 'em, but I don't see them as being major players in the professional supply industry. There's enough "real" photographers out there that trends are still obvious.
For comparison, consider the differences between the bona fide audio engineering industry (where digital mixers and cheap-but-unique equipment reigns supreme, and professionals can artistically combine processors to achieve a particular desired sound) and the audiophile-supply industry (where noisy analog processors, vinyl, and high-purity copper digital cables are believed to sound "better" by being highly distorted).
Source: I used to work for a lab that was one of the first to integrate a complete digital ordering system (including a minilab, ironically) into their workflow. Said lab was eventually driven out of business in 2007 as minilab quality and prices drastically cut down the number of customers.
You do not have a moral or legal right to do absolutely anything you want.
while it's true that jumping on a bad fad could bankrupt you, only an idiot would have continued to believe that digital wasn't going to succeed. The prices for digital cameras was low enough that instamatics just couldn't compete, on original price alone. Granted, the early digital cameras pictures sucked in quality, but knowing the speed of new tech improving that was solely limited by manufacturing process would quickly let you guess about when the image quality would be close to film. Moore's law and all - it was only a couple of years after the initial 1-2 MP cameras came out that the 3 and 5 MPs came out, and 5MP was good enough for a pocket camera to rival the print of a cheap 35mm camera, and that's pretty much the beginning of the real end for film. Digital didn't add on the processing costs for film, you could take 100 pictures, "process" them on the spot, and take another 100, pretty much for "free". The best film could do was 1 hour processing at a relatively high cost, and 36 max pics per roll. (I can take over 1000 in RAW mode on my current DSLR and the way oversized Compact Flash card I have)
As for tablets, I think the market will continue to grow. There's a distinct use case for tablets, and it more than meets the needs for a large majority of the populace. Think all the current phone texters that make do with 140 characters or less thumb typing on a screen keyboard far too small for their fingers being able to enjoy much larger real estate of the tablet.
The real issue with the tablet "fad" is a bunch of companies that think throwing some hardware together in a roughly tablet sized package is sufficient keep failing, and they'll continue to fail. It's more than just hardware, if they want to even enter the edge of the iPad market.
The cesspool just got a check and balance.
Kodak's main thrust was overall image quality and print quality, but look what has happened. People use crappy cell phone cameras for most things and hardly print anything.
Telling example of arrogant thinking: When the disc film camera system was introduced, there was a big presentation in the Kodak auditorium explaining in gory detail why it was so wonderful. The lens was a miracle of optical engineering. It was an impressive display of whiz-bang charts and 3D graphs of the photographic space etc. Only problem was you could not take a good photo with a disc camera; all the pictures were uniformly mediocre. Kodak took years to develop the disc system and Fuji had a copy-cat camera for sale in 6 months. This from the company that invented video tape recording and decided "Nobody would want a VCR in their home." Similar logic was applied to ink-jet and thermal printing and to a lesser extent to image sensor micro-lens arrays.
More recently, Kodak tried to sell image sensors into the cell phone market. Have any of you tried to sell anything to a cell phone company? We thought they would be impressed with the Kodak name, image quality and our proprietary image processing algorithms. They are so big they didn't care. Pricing is brutal. They want millions of parts on time or else! VGA devices are so cheap you can't make a profit. HD devices are low-volume so you can't make a profit. That leaves the middle ground of...nothing! We were earnest and naive.
Ranting against the dumbness of big business is popular and there is certainly blame to be placed on a management that could not see into the future, relied on a high-profit fading technology and approved only boring products. I have no doubt that all the fantastically wealthy managers that have driven this once proud company into the ground will enjoy their retirement. The technical people I worked with were GREAT!
Sorry, but gray text on gray background is making my eyes bleed.