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Kodak Failing, But Camera Phones Not To Blame

Posted by timothy on from the all-the-world's-a-sunny-day dept.

An anonymous reader writes with this snippet from The Conversation: "According to the Wall Street Journal, camera manufacturer Kodak is preparing to file for Chapter 11 bankruptcy, following a long struggle to maintain any sort of viable business. The announcement has prompted some commentators to claim that Kodak's near-demise has been brought on by: a failure to innovate, or a failure to anticipate the shift from analogue to digital cameras, or a failure to compete with the rise of cameras in mobile phones. Actually, none of these claims are true. Where Kodak did fail is in not understanding what people take photographs for, and what they do with photos once they have taken them." Continues the reader: "Looking at camera data from Flickr, of images uploaded in 2011, camera phones only make up 3% of the total. Dedicated cameras from Canon, Nikon and yes, Kodak were used to take 97% of the images. What Kodak failed to understand is that people have switched from taking photos for remembering and commemorative reasons to using photos for identity and communication. The shift changes the emphasis away from print to social media platforms and dedicated apps."

57 of 309 comments (clear)

  1. Poor analysis - its film not the camera itself by Anonymous Coward · · Score: 5, Informative

    Dedicated cameras from Canon, Nikon and yes, Kodak were used to take 97% of the images

    Kodak makes its money (or used to) from film, not the camera hardware itself. All those 'dedicated cameras' are busy taking shots without a single bit of negative being exposed.

    1. Re:Poor analysis - its film not the camera itself by Teancum · · Score: 5, Informative

      When the Kodak Brownie was introduced, yes, you could say that was their business model. It was successful for a great many decades too and Kodak made a pile of money off of that effort. They consumed so much silver for the production of their film that they even owned silver mines with much of the silver processed there was simply going to their own factories rather than being used for bullion or coins.

      That said, Kodak also was instrumental in developing the digital camera, invented the *.psd image format (still by far the best quality image format you can get in terms of the dynamic range of colors you can record for any computer imaging data format) and put in the engineering effort to try and change with the times.

      The sad thing is that this isn't the only photo equipment company which has suffered in terms of being relevant or even totally collapsed. The Polaroid Corporation was once a rather large company too, and now is only a marketing brand for Chinese knock-off cameras where the company itself doesn't even exist at all any more. If you look at Fujifilm, once a major competitor to Kodak, they are also struggling under the same kinds of problems and fighting for relevancy.

      All told, it really is a shift of technology on to of a shift in business models that are required to be successful. Then again Xerox had a similar kind of problem trying to stay relevant over the years, where it could have owned the PC market with the devices built at their PARC research group but instead let Apple Computer (in the form of Steve Jobs) essentially copy all of their ideas and build the Macintosh.

    2. Re:Poor analysis - its film not the camera itself by larry+bagina · · Score: 3, Informative

      That said, Kodak also was instrumental in developing the digital camera, invented the *.psd image format (still by far the best quality image format you can get in terms of the dynamic range of colors you can record for any computer imaging data format) and put in the engineering effort to try and change with the times.

      .pcd?

      --
      Do you even lift?

      These aren't the 'roids you're looking for.

    3. Re:Poor analysis - its film not the camera itself by Anonymous Coward · · Score: 5, Informative

      That said, Kodak also was instrumental in developing the digital camera, invented the *.psd image format (still by far the best quality image format you can get in terms of the dynamic range of colors you can record for any computer imaging data format) and put in the engineering effort to try and change with the times.

      That was the PCD format. PSD is an Adobe/Photoshop format which is basically started out as a proprietary TIFF container to accommodate various things which make it more friendly to modern uses, but mostly as a vendor-lock-in device.

      Photo CD used a color space based on phosphors which were used in computer monitor and televisions, which is important because analog monitors can be driven in a way that they don't clip like an LCD monitor will, causing an abrupt line of brightness, (posterization) instead these areas on the monitor genuinely are whiter/brighter than normal. This makes PhotoCD images appear blown out in the highlights when viewed on modern hardware.

      So, it's not really that it's better in this regard, but simply different. This feature is woefully un-useful for print, for example. Also, for what it's worth, there are color spaces which completely blow Photo CD's color space out of the water in terms of total gamut, if not overall dynamic range, because unlike Photo CD these formats are hard limited at 100% brightness. Example: ProPhoto RGB which, incidentally, was also developed by Kodak and can record many colors which the human eye cannot see!

      Unfortunately it's mostly academic for now because few displays are capable of accurately rendering a great deal of the tonality those color spaces represent, because 1) DVI is limited to 8 bits per component, and 2) at a certain point you basically need more physical color components, like yellow and violet 'subpixels'. Example: the expensive LaCie monitors some professional designers and photographers like to use can render 100%+ of the NTSC color space, and 98% of Adobe RGB 1998, but still, the human eye can see a lot that these color spaces can't produce.

    4. Re:Poor analysis - its film not the camera itself by kurt555gs · · Score: 4, Funny

      Just like "sexting" replaced Polaroid.

      --
      * Carthago Delenda Est *
    5. Re:Poor analysis - its film not the camera itself by Bert64 · · Score: 3, Interesting

      What you have, is an old but highly profitable business model (selling cameras, and *then* both selling and developing film) becoming obsolete, and replaced with a new business model thats better for consumers - namely just selling digital cameras.

      The problem is that these companies became bloated from the huge profits they made selling and developing film, so the profits obtained from selling just the cameras are no longer enough to sustain the business. We're just lucky that they didn't start lobbying to have digital cameras banned, and force people to continue using film in order to protect their profits.

      --
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    6. Re:Poor analysis - its film not the camera itself by tempmpi · · Score: 4, Interesting

      Also, for what it's worth, there are color spaces which completely blow Photo CD's color space out of the water in terms of total gamut, if not overall dynamic range, because unlike Photo CD these formats are hard limited at 100% brightness. Example: ProPhoto RGB which, incidentally, was also developed by Kodak and can record many colors which the human eye cannot see!

      It gets even worse: XYZ, a colorspace used for e.g. digital cinema and based on the response of the receptors in the eyes contains "imaginary colors" that can't exist in the real world. E.g.: It is impossible to find any mix of wavelengths that will only stimulate the Y/green receptor but not also stimulate the X and Z receptors at least slightly. But XYZ can express "colors" like that, that are supposed to stimulate only one receptor without also slightly stimulating the others, even through response curves of the receptors overlap. Maybe some day direct brain stimulation will make us able to see these colors that can't exist in the real world.

      Unfortunately it's mostly academic for now because few displays are capable of accurately rendering a great deal of the tonality those color spaces represent, because 1) DVI is limited to 8 bits per component, and 2) at a certain point you basically need more physical color components, like yellow and violet 'subpixels'.

      Well, HDMI and DisplayPort can both do up to 16 bits per component and xvYCC. Also 3 color components are fine for transmission, just for displaying some of these more extreme colors you will need more than three components.

      --
      Jan
    7. Re:Poor analysis - its film not the camera itself by Maow · · Score: 3, Funny

      Then again Xerox had a similar kind of problem trying to stay relevant over the years, where it could have owned the PC market with the devices built at their PARC research group but instead let Apple Computer (in the form of Steve Jobs) essentially copy all of their ideas and build the Macintosh.

      Channelling /. user bonch 'cause I cannot help myself:

      There comes a point where it's obvious that other companies are liberally borrowing from Jonathan Ive's design shop at Apple.

      [...]

      I realize Slashdot comments tend to have an Apple slant (to put it mildly), but come on, this is completely obvious "inspiration" from Apple.

      [...]

      I think what really goes on here is that some people just don't want to give Apple credit for anything, and they hate when people do credit them, so when comparisons between designs are pointed out, it pisses them off and they make snarky remarks about "rounded rectangles."

      So, don't you see? Xerox copied ideas from Ive's and Jobs' future! Why, oh why won't you at least give them credit where credit is due, Slashdot?

    8. Re:Poor analysis - its film not the camera itself by walshy007 · · Score: 4, Informative

      I would like to know how Flickr would even know who was using what camera

      Digital cameras often embed exif data about the camera into the files.

    9. Re:Poor analysis - its film not the camera itself by silentcoder · · Score: 4, Insightful

      >That said, Kodak also was instrumental in developing the digital camera, invented the *.psd image format

      This is partly right, but not as simple. The censor at the heart of all digital cameras was invented by a Kodak employee - at a time when Kodak was among the largest patent holders in the world. The executives he showed his design to told him "Forget it, we make film not computer stuff".
      The result is very much photography's own version of the XEROX-PARC/APPLE saga - as Kodak didn't see the value of what their employee had built, failed to patent it and saw his design being given to all the competition.

      Thus came the digital camera revolution - one reason why it had so many competitors so early on was that nobody owned a patent on the censor until it was too late to get one - mostly because the company where it was invented hadn't thought it worth the bother of applying for.

      Even if your cynical you could say that if Kodak had foreseen a possible threat from digital they could have patented the censor simply to prevent digital cameras from being made at all.

      --
      Unicode killed the ASCII-art *
    10. Re:Poor analysis - its film not the camera itself by alexhs · · Score: 4, Interesting

      But XYZ can express "colors" like that, that are supposed to stimulate only one receptor without also slightly stimulating the others, even through response curves of the receptors overlap. Maybe some day direct brain stimulation will make us able to see these colors that can't exist in the real world.

      You can actually experience that kind of colors as optic illusions : if you fix a blue sheet, you will strain your blue cones. If you then fix a green or yellow sheet, you should get an "impossible" color. There are other ways to get such impossible colors, but in any case you can't perceive them in "normal" conditions.

      --
      I have discovered a truly marvelous proof of killer sig, which this margin is too narrow to contain.
    11. Re:Poor analysis - its film not the camera itself by Lumpy · · Score: 4, Insightful

      Kodak INVENTED the digital camera and was the only company selling them for the first year. It's the idiot CEO that was in place at that time that let them produce craptastic cameras instead of partnering with a camera maker.

      It is their own fault. Over the history of the digital camera, the crappiest digital cameras were all kodak. WTF were they thinking? They never tried to pioneer the digital film back, that could have made them a ton of money. etc...

      Kodak is dead because their leadership was stupid. They chased the maximum profits per quarter instead of chasing what would continue the company in the seachange they created themselves.

      --
      Do not look at laser with remaining good eye.
    12. Re:Poor analysis - its film not the camera itself by swalve · · Score: 4, Funny

      Actually, an easy way to see an impossible color is to watch the David Letterman show. On his set, there are a number of things painted in a burgandy/maroon color. If you let that color burn into the retina for a while, when you close your eyes, you get a blue green that's just awesome.

    13. Re:Poor analysis - its film not the camera itself by Anonymous Coward · · Score: 5, Informative

      SENSOR for goodness sake!!! SENSOR, not CENSOR!
      There is no realtime censorship performed by Kodak cameras!

    14. Re:Poor analysis - its film not the camera itself by Lumpy · · Score: 5, Insightful

      "The only problem I see, other companies made cheaper digital cameras. "

      they made cheaper digitals that were a LOT better.

      I owned the first Canon Digital camera model, it was 35% cheaper than the equilivant from Kodak and took 800X better photographs because it had decent glass. Kodaks' offerings were using plastic lenses with the :fuzzy: effect in every shot. Even at the low resolutions of 1.2megapixel you could see the lenses on kodak cameras were garbage.

      Kodak lost because they offered garbage products.

      --
      Do not look at laser with remaining good eye.
    15. Re:Poor analysis - its film not the camera itself by Anonymous Coward · · Score: 4, Informative

      Are you serious? Fuji doesn't currently make any DSLR cameras, and the ones they did make in the past were basically rebadged Nikon bodies.

      They do have a couple interesting albeit expensive niche cameras like the X100 and X10, althouth the latter is plagued by sensor issues (google "X10 orbs" or "X10 specular highlights"), and the former while a very nice camera has serious limitations (fixed focal lenght non interchangeable lens, poor performance wide open, etc)

      Then they have a slew of mostly forgettable P&S, that aren't sufficiently distinguishable from any other manufacturer's P&S to matter much, since the P&S market is pretty much owned by Sony, Canon and Panasonic.

      If anything, Fuji is aiming at the niche market of street or candid photographers, especially the ones that don't have the moolah to buy Leica. And even those are mostly going for Sony Nex or m4/3 bodies with adapters, which enables one to use old rangefinder lenses, as there is a cache of very good manual focus old glass from Leica, CV, Nikon, Canon, etc.

      Pretty much anyone doing professional work is using either Canon and Nikon (sports, photo journalism, etc), or Pentax medium format (645d) or very expensive digital backs on Hasselblads or technical/view cameras and the like, for studio work. Even Sony (which manufactures all sensors for Nikon) churned out a couple of full frame cameras (A850, A900) a few years ago, but couldn't make inroads into the Canikon market and pretty much gave up, opting instead to focus on translucent mirror or mirrorless cameras.

      Also, I'm pretty pissed at Fuji for discontinuing Neopan b&w films, which have been my favourites for the last decade or so. Recently (after my stock of both films ended) I started shooting Kodak Tri-X instead of Neopan 400, and Kodak Plus-X instead of Neopan Acros 100. Just my luck, Plus-X has been discontinued, and Tri-X will probably go the way of the dodo as well, now that Kodak is in the crapper. Time to stock up while I can, I guess. I just bought a new horizontal freezer for the basement, to store film, and ordered 800 rolls of Tri-X (the whole stock my usual "dealer" had) and scavenged over 500 rolls of Plus-X from various sources. When it's gone, I'll probably go for Foma 100 and Ilford HP5.

      It's really sad to see first Agfa go tits up (oh, how I would kill for a couple 100ft rolls of APX25, Efke is nowhere near the same), then Fuji discontinue pretty much all b&w films, and now Kodak. Really tough times for us, analog photographers.

    16. Re:Poor analysis - its film not the camera itself by kilfarsnar · · Score: 4, Funny

      Maybe he works at Kodak.

      --
      "What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
    17. Re:Poor analysis - its film not the camera itself by dgatwood · · Score: 4, Interesting

      Yeah. This article's analysis is WAY off. I still mostly take photos to remember important events, trips, etc. The images I post are mostly the sorts of things that this article describes (for identy and communication), but that's a tiny fraction of the photos I take.

      I don't know what Kodak's problem is other than that they focused on the wrong consumers. Sure, a lot of people buy cheap consumer cameras, but the real profit margins are in the DSLR space, which Kodak never really touched. Instead, they built digital backs for film-based SLR cameras, under the assumption that people would want to update their current film cameras to be digital. The problems with this are twofold:

      • They failed to anticipate that at some point, those pro photographers would decide that digital photos were good enough. Once this happened, there was no longer any reason to use film backs, which meant that there was no reason to use a bulky add-on digital back, either.
      • Nikon and Canon were smart enough to maintain compatibility with their existing lenses, which meant that users could upgrade to pure-digital cameras very easily, and did.

      Because Kodak did not anticipate this transition (and thus did not start making any DSLR cameras of their own), their only remaining sources of income were consumer-grade cameras and sale of image sensors to camera companies. By their very nature, however, consumer-grade cameras are low margin, and worse, their market got heavily cannibalized by camera phones, which seriously cut into those devices as a source of revenue.

      This left image sensors. Thus, the only way for Kodak to stay afloat at that point was to continue to be at the forefront of image sensor technology. Unfortunately, the two main camera makers, Canon and Nikon, both build a lot of their own chips, and Sony and Foveon make great chips as well, which nearly eliminates the potential for image sensor sales except in their own cameras.

      By the time all was said and done, their only way to make money was to compete in the compact camera market. Unfortunately, this market is almost purely feature-driven, which means that it demands ever-higher megapixel counts. Thus, they either had to buy chips from their competitors or keep up with them in their own image sensor designs. Worse, this meant supporting an image sensor division on sales of compact cameras—sales that were drying up.

      At least that's my interpretation of things based on what I've seen/read. Kodak needed to have made a serious foray into the DSLR market instead of (or in addition to) being a temporary enabler for their competition. Had they done this, they would be right up there with Canon and Nikon in the DSLR space by now, and they wouldn't be bankrupt.

      Let this be a warning to companies that ignore the pro market: you do so at your peril. The consumer market is great, but fickle. It can go away at a moment's notice, and when it does, if you don't have the loyal pro market, you're out of business.

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

  2. bad data source by Lehk228 · · Score: 5, Insightful

    flickr is a horrible source to do a study like this, it is going to bias towards 'real' cameras because it's more of a photography sharing site then it is a "drunken pics at the bar last night" site. mobile phones can upload photos straight to facebook and twitter

    --
    Snowden and Manning are heroes.
    1. Re:bad data source by cultiv8 · · Score: 4, Funny

      What Kodak shoulda done is patented their technology, that's how you create something and then not innovate but yet profit from it. *runs, ducks*

      --
      sysadmins and parents of newborns get the same amount of sleep.
    2. Re:bad data source by phantomfive · · Score: 5, Interesting

      They did patent their technology, at least a lot of it. That only lasts 20 years though, so you can't be a troll forever.

      --
      "First they came for the slanderers and i said nothing."
    3. Re:bad data source by Cimexus · · Score: 4, Insightful

      Very true, but I suspect Flickr was chosen because:

      - Most Facebook users set privacy preferences up such that only friends can see their photos. Flickr on the other hand, being a 'photography sharing site' rather than something for personal images (as you rightly say), has mostly 'public' photos, accessible without even needing a Flickr account, that can be easily crawled and analysed. (You can make photos visible only to other Flickr friends, but by and large, people don't do this, as they aren't using it for private photos).

      - Camera model is derived from EXIF data in image. Facebook uploading software (or maybe Facebook itself) generally strips out EXIF information from images. So despite the fact that Facebook offers many more images than Flickr, it is useless in any study of how much particular makes/models of camera are used. (Again, you can hide/strip EXIF data on Flickr as well, but a smaller proportion of people do this than you might think, and at least it's an option, unlike on FB where it's stripped no matter what)

    4. Re:bad data source by Cimexus · · Score: 5, Informative

      True - far fewer use Flickr than Facebook. Having said that, I use Flickr for photos (despite being an avid Facebook user too), and so do most of my friends (in fact, they introduced me to Flickr originally). For me at least, it offers a number of advantages over FB:

      - It's built for photos from the ground up, rather than being a social networking site that also happens to let you upload photos. So it has a lot of useful image-specific tools that Facebook doesn't. It also has some nice geotagging features, allows you to preserve/edit/view EXIF information, proper creative-commons-based image rights controls etc.

      - Much simpler privacy controls. Basically, for each photo, it's either public (viewable at http://www.flickr.com/username by anyone - no Flickr account needed), or viewable only by Flickr friends. When sharing photos with friends and family (who may or may not have a Facebook account), it's simpler to say "go to this URL to see my photos", than it is to get them to sign up to Facebook, become my friend etc. (I know that can probably set up FB such that certain photos are visible to non-members while still hiding all the rest of my posts and information ... I haven't looked into it ... but FB's privacy controls are more complex and overkill for the task at hand. Flickr seems a simpler and more elegant solution.)

      - It's not Facebook. While I'm not saying that I 'trust' Yahoo more than I do Facebook (or any other large corporation for that matter), it can't hurt not to have all my stuff in one place, right? If Facebook suddenly suffers a major security flaw, or decides to sell everyone's data or some other evil thing, at least they won't have my photos :) (Similarly, if Flickr goes bad, they have my photos, but not any other personal info that FB has).

      - It was (and frankly, still is) a nicer site to use and navigate than FB. And it used to be kinda cool before Yahoo took it over... :(

    5. Re:bad data source by osu-neko · · Score: 5, Insightful

      flickr is a horrible source to do a study like this, it is going to bias towards 'real' cameras because it's more of a photography sharing site then it is a "drunken pics at the bar last night" site.

      For the purposes of the point being made, that's precisely why flickr is the perfect site. Kodak's market never was the "drunken pics at the bar" market. Losing a market you never had to begin with has no impact on your bottom line.

      --
      "Convictions are more dangerous enemies of truth than lies."
    6. Re:bad data source by Sir_Sri · · Score: 3, Insightful

      and just because the last 3 or 4 years of Flickr has been populated with cameras but not camera phones doesn't mean the next 5 years will be.

      I went on a business trip, with 2 days due to scheduling incompetence on our end that ended up as free time, + 1 extra day due to business issues. All I took was my Galaxy SII. It took some great photos (or at least, the camera worked, my own incompetence not withstanding). And it took a few videos that probably could have been better. It got the job done. I'm sure I could have carried another device, which would have been one more thing to risk losing, or breaking. My phone I needed anyway.

      But If I did that 3 years ago, I would have still taken a camera, a digital camera, but a camera.

      A cell phone will never replace a full blown camera completely, but at some point it becomes 'good enough' that you don't need all of the other stuff that makes it a camera, and it just runs as software on the portable computer, and the Camera becomes a specialized device. Kodak was the wrong company for dealing with that change. They were a chemicals company (Eastman is still a chemicals company), CCD's are semiconductor industry devices. Kodak would have been in serious trouble trying to get into that mass market without buying a semiconductor outfit, or merging with one. Everyone who is in the digital camera censor business is in it because they have a chip background. I cannot seriously envision a situation that could have lasted where Sony or Samsung would have continued to make cameras for Kodak but not on their own, which essentially what has happened with the cell phone (and camera's in cell phones business, between them and Apple, even Sony, who is still selling them cameras are publicly pondering why they are that stupid). Kodak got into the game late, and they've never been able to do anything but try and catch the leaders, and in the end you get left behind. All of the big camera makers are moving into other areas of electronics and Kodak doesn't have the skills or the resources to follow. While Sony and Samsung are integrating their camera technology into cell phone Kodak is trying to not go bankrupt.

      They could have avoided this, if they'd jumped on CCD cameras as the future of the business in oh... 1996. They didn't. It has nothing to do with social, or the types of devices people want. Kodak is a chemicals company in a semiconductor business, and they didn't realize it until it was too late, and the semiconductor companies didn't need them anymore.

    7. Re:bad data source by sunspot42 · · Score: 4, Funny

      over one beeeellion dollars

      That joke wasn't very funny when a painfully unfunny Canadian made it in a teeth grindingly unfunny movie 10+ years ago even though there it was at least in context. It hasn't matured with age to become funny since then.

      Oh, behave!

    8. Re:bad data source by wvmarle · · Score: 3, Interesting

      It is probably because patents mostly work as intended: basically to promote the disclosure of trade secrets by giving a temporary monopoly in return (yes yes I know patent trolls are there as well and so, it's not perfect). As a result the companies benefit from both the issuing of patents, and the expiry of other companies' patents.

      While issuing copyrights benefit the creators, but expiry of copyrights mainly benefits consumers. Media creators have generally very little benefit, if at all, from the expiry of other creator's copyrights, as there are plenty of ways that a creator can benefit from other people's works while under copyright: by getting inspiration, by parodying, etc.

    9. Re:bad data source by DarwinSurvivor · · Score: 4, Interesting

      Disney (one of the biggest copyright extension pushers) benefits GREATLY from all the expired copyrights on the stories they turned into massively profitable movies.

    10. Re:bad data source by DarkOx · · Score: 3, Insightful

      No it's a good data source for that very reason. The people using those 'real' cameras are most likely the market segment that have been Kodak's traditional customers. We want to know have they have changed and what they do now. The photo market itself has grown and it may well be that Kodak has lost total share by not capturing the new market segments like mobile phone snap shots but that is a different question.

      --
      Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
    11. Re:bad data source by silentcoder · · Score: 4, Interesting

      > The vast majority of their older work is original.

      What ?!?!?!?!

      The vast majority of their older work is - if anything- MORE public domain based than their newer work. Stories like The Lion King and Lilo and Stitch at least in theory were original (some serious doubts about the former exist) but their older movies - hell ANYTHING with "classic" in the title are all based on public domain works.
      In fact no company in history has profited from the public domain as much as Disney - or spent as much to prevent ever having to contribute back to the pool from which they drew so much.

      If your argument is that "earlier work" only refers to the short cartoons before Snow White then I suppose you're right - most of that was indeed original, but then there is a LOT less of that than most people think.
      By the time of the Golden Age of Cartoons the Disney Corporation was barely even involved in the market anymore - several other companies owned the market, the biggest being MGM and Warner Brothers.

      --
      Unicode killed the ASCII-art *
  3. Changing business by sd4f · · Score: 5, Interesting

    If business was slowing down a lot, why weren't they sacking workers and reducing expenditure? I think this is more of a failure on management to restructure the company in a way that identifies that they can't really compete in the digital age how they once used to. I think that sometimes the management just have to realise that the company can't exist like it once did, and in order for the company to remain and still employ some people, they'll have to downsize a lot more than management might be comfortable about.

    1. Re:Changing business by Majik+Sheff · · Score: 4, Insightful

      Up to and including... management. You can only fire your way into a positive quarterly report so many times before you run out of peons to pee on.

      --
      Women are like electronics: you don't know how damaged they are until you try to turn them on.
    2. Re:Changing business by Isaac-1 · · Score: 5, Insightful

      Kodak's decline goes back 30 years or more, I personally think it began with their ill fated Kodamatic (Polaroid clone) and having to pull it from the market after loosing a major patent infringement case to Polaroid. Since then it has been one bad move after another, does anyone remember the much hypes Kodak disc camera? The only good thing they had going was their high end multi thousand dollar CCD imager division which they completely failed to convert to market dominance in the consumer digital camera revolution. Sure their were also many background failures like not keeping up with Fuji and others in the 1-hour photo market in an attempt to maintain their major mail out photo lab processing centers, etc.

    3. Re:Changing business by phantomfive · · Score: 5, Informative

      They are filing for chapter 11 bankruptcy. That isn't going to shutdown the company. They are going to restructure it, hopefully in a way that will continue to let the company survive in the future, including doing things like downsizing.

      --
      "First they came for the slanderers and i said nothing."
    4. Re:Changing business by msobkow · · Score: 5, Interesting

      A decline from such heights doesn't happen overnight. It takes years of mismanagement, mistakes, failure to read the market, failure to adapt, and in this case, failure to realize that the entire market on which your business is based is going away.

      I find it interesting that Fuji in Japan was a much more diverse company, and seems to be working on Thorium Molten Salt Reactor technology based on the PROVEN trials of the 1960s. That's a pretty radical leap from Fuji's "traditional" camera market.

      A smart company invests their assets in developing new markets and new products, not tenaciously clinging to old and failing models until their last dying breath.

      --
      I do not fail; I succeed at finding out what does not work.
    5. Re:Changing business by msobkow · · Score: 5, Interesting

      Rather than saying a company can be sunk by a single bad decision, I'd say it's one specific TYPE of bad decision: hiring the wrong executive.

      Look at NorTel in it's heyday. It was one of the top technology companies in the world; the patents sold in the bankruptcy are still very valuable.

      But they brought in a hot-shot "save the company" American executive to run the place. He laid off THOUSANDS, and many thousands more who were good resources left of their own accord in addition before the axe could fall on them. The company never did recover from the devastation of those late-80s layoffs, and continued it's decline for years afterward.

      But it wasn't a single bad decision in the sense of backing the wrong technology or the wrong business model. It was hiring a rapist to run the company.

      --
      I do not fail; I succeed at finding out what does not work.
    6. Re:Changing business by jimicus · · Score: 5, Interesting

      If business was slowing down a lot, why weren't they sacking workers and reducing expenditure? I think this is more of a failure on management to restructure the company in a way that identifies that they can't really compete in the digital age how they once used to. I think that sometimes the management just have to realise that the company can't exist like it once did, and in order for the company to remain and still employ some people, they'll have to downsize a lot more than management might be comfortable about.

      When you have a small company, it's pretty easy to do that. The CEO or someone very close to him visits the affected departments like the Angel of Death and when he leaves, staff levels have been cut by 40%.

      When you have a huge multi-national, it's really hard. You've got a vast number of departments spread out in all sorts of locations, employment law varies between locations (meaning you may not be able to go in and sack everyone even if you wanted to) - and even the most efficient set of management accounts is lacking in some detail. So rather than visiting like some dark angel, you carry out a full review of operations to get an idea of what departments are contributing and what departments aren't.

      Well and good, but the people directly below you didn't get that far by being stupid. They're pretty good at office politics themselves, they know which way the wind is blowing, they know what a full review of operations means, they've spent years building up their little empire. No way they're letting it go without a fight. So when the instruction comes down from on high, you can be more-or-less certain that the report that goes back will show their department to be the one thing that's keeping the company afloat. (This, BTW, is why it's quite common to hire in outside consultants or make big staffing changes at a senior level before doing these things...)

      Not to mention that such a review works great if the problem can be neatly divided in departmental lines. If it can't - if instead all your teams are contributing but none are contributing anywhere near what they need to be to keep the company afloat - things now become a lot harder.

      That's why when we hear of huge companies turning things around and improving their situation dramatically where before they looked doomed, it's really big news. IBM and Apple have done it, but as a rule it's pretty rare. It's rather more common for the numbers on the balance sheet to drop steadily over a period of time until they can no longer sustain the business - and when that happens, creditors get jumpy. Frequently they get so jumpy that there simply isn't time to go in and turn the business around, they've already asked a court to declare you bankrupt.

  4. Of course they're dying by Anonymous Coward · · Score: 5, Insightful

    Let's pretend the data is accurate and reliable. Kodak's core problem would remain the same: if you're business model is built on selling photographic film and paper, and people don't need that anymore, the company is going to fail.

    1. Re:Of course they're dying by osu-neko · · Score: 4, Insightful

      ...if you're business model is built on selling photographic film and paper, and people don't need that anymore, and you don't change in any way, the company is going to fail.

      ftfy

      Many companies survive the complete evaporation of their original business model just fine. Did you know Berkshire Hathaway was originally a textile company?

      Any company with the resources Kodak once had can survive any possible change in their market, regardless of their business model, as long as they aren't afraid to change. Companies fail when they're run by incompetent management, period.

      --
      "Convictions are more dangerous enemies of truth than lies."
    2. Re:Of course they're dying by clodney · · Score: 3, Insightful

      Many companies survive the complete evaporation of their original business model just fine. Did you know Berkshire Hathaway was originally a textile company?

      Any company with the resources Kodak once had can survive any possible change in their market, regardless of their business model, as long as they aren't afraid to change. Companies fail when they're run by incompetent management, period.

      If only it were that simple. The big problem is deciding what to change into. A company in a declining market may have a very profitable, cash cow business. They can use that money to fund the search for a new business model. But a company with a huge investment/infrastructure/employee base in business X may not even recognize an opportunity in business Y, and even with the cash available, may not be a competent competitor in business Y even if they decide to pursue it.

      Should Kodak have gone into search engines in competition with Google? Or closer to home, given their association with the movies, maybe create a special effects studio? Or maybe create software to edit images like Photoshop? Is there any reason to think that they would have succeeded at any of those ventures?

      Having cash and recognition that your business is declining is not enough. The real rub is finding something else that you can succeed at. And I don't think there is any obvious way to go about that.

  5. The article is weak by gzipped_tar · · Score: 5, Insightful

    It first tried to rebuke the claims of Kodak being not able to innovate, etc, and then discussed "how people today use photos" in the examples of Flickr, Facebook, and such. It concluded with the weak argument of essentially one sentence, that "[It] is hard to see a role for Kodak in all of this." The problem with this reasoning is that exactly the same thing can be said about many of Kodak's competitors. I'm not aware whether Nikon or Canon is doing significantly better in this regard, which is to ease the "sharing and distribution" of photos through the Internet and social networking.

    --
    Colorless green Cthulhu waits dreaming furiously.
    1. Re:The article is weak by c0lo · · Score: 4, Informative
      Agfa - doing fine in B2B - they managed to jettison their consumer film division quite a while ago.

      However, in 2004, the consumer imaging division was sold to a company founded via management buyout. AgfaPhoto GmbH, as the new company was called, filed for bankruptcy after just one year

      FujiFilm - switched to digital faster than Kodak (FinePix consumer cameras), diversified in other areas and is still getting 3% of their sale from film (most probable medical imaging).

      --
      Questions raise, answers kill. Raise questions to stay alive.
  6. Litigation over innovation by Anonymous Coward · · Score: 5, Interesting

    Kodak has lost money each year but one since Mr. Perez, who previously headed the printer business at Hewlett-Packard Co., took over in 2005. The company's problems came to a head in 2011, as Mr. Perez's strategy of using patent lawsuits and licensing deals to raise cash ran dry.
     
      Perez chose litigation over innovation; failure was inevitable and deserved.

  7. Classic disruptive techonology problem by robla · · Score: 5, Insightful

    Even though Kodak saw digital photography coming, the problem was Kodak's whole financial structure was tied to film, and digital technology was disruptive technology. They might have been able to sustain the brand by merging with or buying the right company at the right time (e.g. Canon), but most companies have a hard time dealing with technology shifts that vaporize their main profit center. It's not as simple as just knowing what the next trend is; it's figuring out how to gracefully wind down the existing cash cow while giving the new technology the management attention and resources it needs to thrive. Even then, there still ends up being a lot of pain because you can just put all of the same people you had producing film to work in a digital camera business.

  8. I remember just 6 years ago by tbird81 · · Score: 4, Interesting

    Someone I knew uploaded their photos to the Kodak site for printing, and had deleted them from her camera.

    Rather than making it easy to get a copy of these photos, it was impossible. I think you basically had to order a PhotoCD or something, which I wasn't going to do.

    They could have made a proper website to allow people to share their photos and print them. But they made it annoying.

  9. Article lost me... by Lordfly · · Score: 4, Insightful

    at this: "It would be interesting to repeat this analysis using Facebook data, but there is no reason to believe the results would be substantially different."

    Yes, because the millions of smartphones out there with a camera and a Facebook app (as opposed to a flickr app) aren't going to skew the results at all.

    Flickr is for people who like photography; ergo, the data is going to be skewed heavily towards actual cameras.

    Facebook is for people sharing themselves with their friends and the world. One only has to peruse a random person's Facebook profile picture page to find hundreds of self-snaps taken in the bathroom, or at the pub, or on a train, or whatever.

    Kodak, in my opinion, failed because they neglected to make quality products in their particular niche (easy to use, inexpensive, easy to share). They offshored their production, so Kodak cameras were notoriously hit-or-miss in regards to actually working right. They missed the highend market (then again Kodak was never known for that anyway), letting Sony, Pentax, Canon, and Nikon beat them there. They failed to leverage their gigantic photo paper experience into anything worthwhile (I own a Kodak printer that, as I type this, refuses to print due to some bizarre error I don't have time to diagnose).

    In short, Kodak failed because Kodak fucked up. Photography isn't going anywhere. Hell, film photography isn't going anywhere. Kodak just stood still and let the world pass them by.

    They took our Kodachrome away, and nobody cared.

    --
    hookers and grits.
  10. No real conclusion by Dan+East · · Score: 3, Interesting

    The article doesn't make much sense. It talks about "frictionless photo sharing" and how Kodak has totally missed it in that area, and how camera phones can share photographs via Facebook seamlessly with little effort. But then it shows Flickr stats asserting that Kodak isn't actually competing against camera phones, but other dedicated camera makers like Canon, Nikon, etc. So in what way is Canon and Nikon integrating with FB, or otherwise "getting it", where Kodak isn't? I've owned a couple modern Canon cameras, and they just throw pics onto an SD card like Kodak does, so Canon's success has nothing to do with beating Kodak in the way the article claims Kodak has failed. That's the real question - why did Canon and Nikon trounce Kodak when it comes to digital cameras?

    Simply put, the article is talking about two different things, and doesn't correlate the cause and affect between them at all.

    --
    Better known as 318230.
    1. Re:No real conclusion by The+Dancing+Panda · · Score: 4, Interesting

      I just bought my girlfriend a dedicated Samsung camera that will connect to Facebook/Twitter/Email/Whatever via WiFi and upload directly from the camera. It is honestly a pretty sweet feature.

  11. Not just photography by Anonymous Coward · · Score: 3, Interesting

    They sold off their Healthcare division (think expensive imaging equipment) in 2007, their graphics division was closed and the programmers replaced with Chinese & Israeli ones in 2009. That outsourcing flopped, competitors brought out major upgrades, Kodak stagnated.

    http://printplanet.com/forums/kodak-systems/19947-prinergy-dead-they-laying-off-dev-team

    So you might think their problems are just the loss of the low end digital camera business, but the CEO there makes some bad bad decisions in all divisions. A decent CEO could turn that place around.

  12. Re:Software by Pentium100 · · Score: 3, Informative

    Probably because they thought proprietary was better. Another example would be Sony Hi-MD recorders. The one I have (MZ-RH1) can be used as a mass storage device (if the disc is in Hi-MD format) and can play mp3 files and yet, if I want to transfer a mp3 file to it, I have to use Sonic Stage. Why?

    AFAIK (I do not have it), the Apple iPod is the same, as you have to use iTunes to copy music to it, even though it can be used as a mass storage device for other files.

    Oh, and for both devices, there is no Linux version of that software, or even a portable one (so I could just plug it in a PC, start the software and transfer the music without installing any software). If this is done for copyright protection, then it does not work, as I can still copy the files, I just then have to go home to copy them to my PC then back on the disc so I can play them on the MD recorder.

  13. Kodak Easy Share by Danzigism · · Score: 3, Insightful

    was the biggest piece of crap ever made. After working with tons of residential customers who need their computers cleaned up and ask for an explanation as to what caused their machine to take so long to boot, Kodak Easy Share was the culprit in many cases. I know they're simply trying to make it easy for old people to just plug in their camera to the computer and magically have all their photos transferred to the All Users\My Pictures folder (which is stupid btw), but the software is just pure autorun garbage and why on earth it needed to execute during start up, I have no idea. Regardless of the quality of the cameras, having any negative response on your product cannot be a good thing. I don't think it's the main reason Kodak is filing bankruptcy obviously, but I do think it may have contributed to Kodak's negative consumer image.

    --
    *plays the Apogee theme song music*
  14. Re:wrong comps by Animats · · Score: 4, Informative

    As far as I understand, film still has its use - in very low temperatures (say, -30C), CCDs do not work as well as film. I am sure that there are special cameras with heated CCDs, but they would cost a lot, where film can be used with a (relatively) cheap camera.

    Actually, that's backwards. At low temperatures, photographic film becomes brittle and must be heated. On the other hand, CCDs have less noise at lower temperatures. Astronomers use cooled CCDs extensively. IR cameras often have cooled CCDs; if you want to image heat, you want as little extraneous heat as possible at the imager.

  15. I mean a boring hum-drum one then by Anonymous Coward · · Score: 5, Interesting

    I think you mean a Steve Jobs, whereas I mean a more boring hum-drum one like Mark Hurd.

    Basic competent leadership is enough to turn Kodak around, it doesn't need a superstar CEO, or a major new innovation. That graphics software they killed, it was doing well in the marketplace before the credit crunch hit them. Credit crunch hits, idiot CEO sacks all the programmers and outsources it to China to cut costs. Competitors Agfa/Heidleberg etc. hire all the programmers while they're cheap and come out with major upgrades in the next cycle, customers switch from Kodak and Kodak product dies. Why? Some idiot CEO read an outsourcing article and like a gullible idiot believed it???

    Cameras still sell, and sell well, and Kodak are still a respected camera maker, but they make slightly overpriced, ugly looking cameras. Just basic CEO cost cutting, and trying out new designers, and adjusting teams, boring CEO 101 stuff would be enough to bring Kodak back.

    Kodaks problems are just bad CEO problems.

  16. Re:Doubtful by Brett+Buck · · Score: 3, Interesting

    Kodak is/was definitely a player in the high-end market. Their sensors are used in the current top-end Leica (M9 and S-series) and are the best available.

          There's an aspect to this story that no one is considering - contracts with (or loss of) governmental customers for exceptionally high-quality film. There's a reason you can't get Tech Pan any more and it's not because they forgot how to make it.

  17. Re:I remember just 6 years ago... Kodak ate Ofoto by Bob_Who · · Score: 5, Interesting

    Someone I knew uploaded their photos to the Kodak site for printing, and had deleted them from her camera.

    Rather than making it easy to get a copy of these photos, it was impossible. I think you basically had to order a PhotoCD or something, which I wasn't going to do.

    They could have made a proper website to allow people to share their photos and print them. But they made it annoying.

    Ofoto.com was the premiere photography web upstart at the millennium. At that time, Ofoto was the largest buyer of KODAK paper. In fact, since they were clearly in a position of market dominance, Ofoto's brand looked very appealing to Kodak. Kodak greedily gobbled up that magnificent Berkeley dot com upstart, and made it Dow Jones blue chips. From that moment forward, it was all down hill for Ofoto. It went from being the technological and artistic leader to falling into stagnation and total alienation of Ofoto's loyal customer base. They tragically proceeded to delete the customer archives, to save on cost. For most people, this cloud was the ONLY back up of their precious data. Kodak refused to allow customers to download their data:or transfer it to other servers. ONLY the purchase of measly 700mb/ $20 CDs was offered as a means of accessing gigabytes of sacred customer data. I recall doing the math and finding that it was more expensive than all of my camera equipment. Kodak MURDERED Ofoto like they self destructed themselves when they realized that Corporate America is no place for a retired labor force. So just die, rob the shareholders, and let go of all those ballooning pension and health care commitments.

  18. Wrong conclusion. by yeOldeSkeptic · · Score: 3, Insightful

    If the reason Kodak failed is because they failed to see the shift in attitude towards photographs, then why is it that traditional camera makers like Canon and Nikon are alive and well?

    I think the writer failed to see the obvious here. The reason Kodak failed is because Kodak is primarily a film and photo chemicals maker and not primarily a camera maker. With less people using film it is obvious Kodak can't base its business model on an obsolescent technology. Nikon and Canon are primarily camera makers and they were able to make the shift to digital successfully. Kodak was not.

    Kodak's error was that it decided to hold onto a flawed business model rather than just closing down the company and returning the assets to the stockholders. Some companies are destined to close down. It's just the way it is.

  19. Re:Doubtful by Waccoon · · Score: 4, Interesting

    Around 2003, I used to work in a small photo store, and we had a Noritsu optical photo printer hooked up to a WinNT4 workstation running Kodak DLS MiniLab software. From the ground up, it was designed for totally digital workflow, so processing orders from floppy disks and CDs was common, as was saving orders to NAS.

    It was buggy as hell, the GUI frequently drew garbage and tears, it wouldn't run on Win2K so we couldn't use a lot of card readers or USB anything, it crashed several times a day, and the database would just stop working for no reason which required frequent restarts and losing orders. The system was supposed to be all digital, but any orders we loaded from customer media always printed yellow and washed out, and any color adjustments resulted in horrible banding and color shifts. It was a total black box system, and I couldn't even tell what colorspace the machine was using to process images. JPEG files with embedded color profiles either showed up totally black, or in some cases would cause the system to crash. I eventually developed a system of filtering all customer orders through Irfanview to weed out color profiles the DLS software couldn't handle, to make sure we could actually print on a 1-hour schedule without fear the system would collapse. Just about everything crashed that software, and the CD burner would frequently make coasters -- a big deal when Kodak was charging several dollars for their PhotoCDs (the system would write to blank CDs, thankfully).

    Photos scanned on the Kodak PictureMaker kiosk (running a SparcStation III which took over 15 minutes just to boot up), would take about 10 minutes just to network the final images to the DLS software, even though it took half as long for the Noritsu printer to spit them out. Don't even get me started about the greeting card templates, where more than 150K of XML was required just to define a canvas and a transparency mask to make bordered cards.

    Naturally, proprietary file formats were used for everything, so it was impossible to access customer orders directly through the NAS. You had to use special client software to connect to the DLS system, search for the order strictly by customer number (not order number), retrieve thumbnails of the orders one at a time until you haphazardly discovered the actual order you wanted, retrieve the high-resolution image for the whole order, and then you could actually save the images to a disk. This procedure could take 3-4 minutes if you were lucky, more than 15 if you weren't. The Image Extractor client was about the only thing in the whole setup that ran on Win2K, so that was what we used to write orders to USB thumb drives. The DLS system itself required a horrifically expensive multi card reader connected via SCSI.

    If there was anything that shattered my impression of Kodak, it was their "high-end" software. Kodak did a horrible job adapting to the digital market.