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Reasons Behind the Demise of Kodak

Posted by Soulskill on from the ran-out-of-moments dept.

pbahra tips a story that goes into the reasons behind Kodak's decline and fall. Quoting: "With digital, a significant shift in mind-set occurred in the meanings associated with cameras. Rather than being identified as a piece of purely photographic equipment, digital cameras came to be seen as electronic gadgets. The implications of this shift were enormous. With digital devices, newcomers such as Sony were able to bypass one of Kodak’s massive strengths: its distribution network. Instead, digital cameras became available in electronic retail outlets next to other gadgets. Kodak was now playing on Sony’s and other entrants’ turf rather than its own. Similarly, Kodak’s brand came to be associated with traditional photography rather than digital."

50 of 200 comments (clear)

  1. Pretty simple by Severus+Snape · · Score: 3, Insightful

    They failed to react to changes in their market.

    1. Re:Pretty simple by what2123 · · Score: 2

      Just wait until they use their remaining resources to legislate their existence for another 20+ years. +1 for Corporation Lobbying.

    2. Re:Pretty simple by Tharsman · · Score: 5, Informative

      They failed to react to changes in their market.

      Not true, Kodak actually adopted digital technology extremely early. They ventured into inventing many of the first generation digital photography technologies in association with Apple (and that’s biting them in the rear since now the patents they got from that and are using to sue Apple, among others, are being disputed by Apple as also or exclusively belonging to them.)

      What really killed Kodak was the structure. The company had an extremely high profit margin business model in the film arena. So profitable they own[ed?] their own silver mills. When digital photography came to be, and film finally died, a humongous branch of their business died.

      The only way for them to survive would have been to axe a gigantic percentage of the company, firing insane chunks of their manpower and getting rid of a lot of physical assets. The problem with such a move with a publicly traded company is that it makes it sound like the company is dying; investors will pull back in a heartbeat if the company suddenly axes over 60% of their manpower (and I’m being generous, they likely would have had to cut back even more.)

      Another issue was that Kodak had too many eggs in one simple basket. They did go into photocopiers and printers, but those are two shrinking markets. In fact, now that it’s dying the company finally decided that they may as well axe the entire photography business and stick to printers. At this point they have little to lose since everyone knows they are walking dead. Investors that would had pulled out already did.

      Kodak could have expanded in other fields, like computers and displays or TVs, spread their boundaries. This would have made them a bit more resilient to any given branch drying up. Or they could have gone the Apple way and not expand like crazy just because they can, keep a huge stockpile of cash in the bank and not expand operations just because they can afford to, only if they had to. Actually Apple did both. They expanded from computers into music, mobile smartphones, and TV setup boxes (business that is rumored to expand even further) not to mention invent a brand new computing branch with content consumption focused tablets.

      So, Kodak did try to adapt, react and even be proactive, but restricted themselves to the familiar grounds (photography) and decided to live (like most companies) using up almost all their income nearly as quickly as they acquired it.

    3. Re:Pretty simple by jellomizer · · Score: 5, Insightful

      More to the point their Marketing failed to convince their consumers that Kodak was changing with the market.

      Right when Digital cameras were getting popular, Kodak should have gone all out in their marketing trying to sell their own Digital Cameras and far more effort on their Printers and such.

      The problem with their Printer Campaign was they were trying to sell that they have lower Total Cost of Ownership... It is really tough to sell Lower Total Cost of Ownership, They should have pushed High Quality Images... And TCO is one of the benefits that customers will get later.

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    4. Re:Pretty simple by DesScorp · · Score: 2

      What killed Kodak was simple marketing. They were too late to associate digital photography with the Kodak brand. They invested in the tech early, they just didn't push hard enough for mindshare. There's no reason they couldn't have succeeded the way the Japanese camera companies did. They just made bad choices in promotion.

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    5. Re:Pretty simple by Anne+Thwacks · · Score: 4, Interesting
      No body is mentioning the fact that they had an image problem - at least here in the UK, they were seen as having started as a low price company, worked their way to raising the prices with improvements in quality, and then ditched the quality while retaining the high prices. Kodak could have done loads of things, but with an image of selling over priced tat, they were probably already doomed. (Like Carly Fiorina and HP).

      Meanwhile Samsung has gone from selling cheap tat to top of the range. Who is is making the profit? Is there a lesson here?

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    6. Re:Pretty simple by The+Phantom+Mensch · · Score: 3, Interesting

      I think it's fair to say that Kodak adopted digital imaging about as well as Xerox adapted all of the ground-breaking technology out of Xerox PARC. That is, not well at all.

      Many people say they should've gone into the camera business but I don't think that would've worked. Not many American companies can compete in the world of consumer electronics these days and the digital camera business is mostly a consumer electronics industry.

      Maybe they should've tried to create the iTunes and iPod of photography. Take your pictures with whatever camera you want, but if you want to make your pictures look their best plug them into the eKodak kiosk or iKodak software for your home computer and we'll make them look better, and allow you to share them with Granny online or send her some pretty photo albums. Sort of iPhoto meets Flickr meets Facebook.

    7. Re:Pretty simple by icebike · · Score: 4, Insightful

      Not true, Kodak actually adopted digital technology extremely early. They ventured into inventing many of the first generation digital photography technologies in association with Apple (and that’s biting them in the rear since now the patents they got from that and are using to sue Apple, among others, are being disputed by Apple as also or exclusively belonging to them.)

      What really killed Kodak was the structure. The company had an extremely high profit margin business model in the film arena. So profitable they own[ed?] their own silver mills. When digital photography came to be, and film finally died, a humongous branch of their business died.

      I'm not so sure it wasn't failure to adapt after all. In fact, your own description pretty much says it was.

      It was a given that film was going to go away fairly early. While Kodak did make some forays into digital photography, they did not lead the charge into a whole new way of doing business. It happened without them. They were not a significant player.

      Additionally they ceded the only other remaining aspect of the old methods to HP. They pretty much dropped the ball on printing too.
      That previously relied on a silver process, and Kodak simply could not get away from that silver technology in any meaningful way.
      So both sides of the company got hit with a new technology, and rather then leading the way, Kodak hung on to the past.

      Their only chance for survival would have been to wholeheartedly embrace digital photo printing, where they at least had the chemical expertise, and the possibility to retain a "consumables" portion of the business, in ink, paper, and also devices (printers). But HP beat them in that market as well.

      While a dozen companies make photo printers, (even Kodak) they are a huge pain in the neck, the ink is always dried out when you need it, the paper is way too expensive, way too finicky, and the archival quality is abysmal. Few people bother to print family photos as a result.

      Sadly lost in all of this is the family photo album, or the shoebox of history. Nobody prints photos anymore. Entire family photo history is lost
      to the first hard drive failure, and the one at a time viewing of computer files on a monitor is simply unsatisfying.

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    8. Re:Pretty simple by mwvdlee · · Score: 2

      Here's another take; Kodak was primarily a chemical company, now trying to compete in electronics.
      Kodak might have been more succesful if they dropped photography and focussed on areas where their expertise was still valuable.
      Ofcourse, any "might have been" is just hindsight.

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    9. Re:Pretty simple by amorsen · · Score: 2

      They failed to react to changes in their market.

      The market didn't change, it disappeared and was replaced with a new market. Kodak tried to switch to that new market, but since it had no particular advantage over its competitors, it failed.

      Kodak had two real strengths, its chemical products and its widespread distribution where people could always get their film to somewhere who could develop them and get the finished prints/slides back. Suddenly it is producing electronics and the distribution network is mostly a hindrance rather than a help.

      The prudent way to handle such a situation is to extract as much profit from the existing market as possible, give as much money to the shareholders as possible, and downsize operations as the market shrinks. The shareholders can then reinvest in companies which are competitive in the new market. Doing this is not a failure, it is simply good business sense and good for society as a whole.

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    10. Re:Pretty simple by roc97007 · · Score: 2

      Exactly. Film was going to die. Printing was all there was left.

      They pretty much let HP take that away from them.

      There is no reason Kodak could not have pushed both high-end pro-grade printers as well as home-snap-shot printers. They didn't do either with any gusto, and thereby gave up everything they had.

      Photo printing, as a result, still sucks so bad that we put up with digital picture frames!! OMG, what an abomination.

      That's the real tragedy in this -- Kodak had clearly superior printing technology. Had they moved the technology in their kiosks into home printers at a wide range of features/price, HP would not now own low end home printing, and Epson would not now own high end (8 cartridge, roll paper) home printing. They tried to market pixel-based inks and Kodak paper into the homes, but wayyy too late, giving HP the consumer market, and concentrated on low end home and home office, letting Epson have the home pro market they should have owned.

      It seems like the upshot is that Kodak couldn't make themselves believe that film was dead. It wasn't out of ignorance -- Kodak was first with a working digital camera in the mid seventies I believe, and had digital cameras (based on Nikon bodies) available before anyone else did. They had a 13 megapixel full frame professional camera back in 2003. I remember that because there wasn't anything like it available when it came out, and the pro photo media was all agape at it. (To give you an idea of how advanced this was for the time, the Nikon D4, released in 2012, *eight years later* has virtually the same resolution.) Kodak had digital technology early and did it well. But for some inexplicable reason, they opened their hand and the bird flew away. Printing wasn't *all* that was left, but for some reason, perhaps unwillingness to move forward, they let others own the high end digital market as well.

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    11. Re:Pretty simple by newbie_fantod · · Score: 2

      tablets are very likely going to do a very nice replacement for family albums.

      Looking at high quality digital images of the snap-shots my grandfather took during WWI is one thing, but handling the the actual photographs he carried in his pocket throughout that war is totally different experience.

    12. Re:Pretty simple by Tharsman · · Score: 2

      As some one that carefully preserves 50 year old photos around, I fully understand.

      But as the same person having a dog eat one of said photos, and others eaten by termites over the years, I also got to say most of them will not survive many more years without digital preservation.

      In the year 2062 my grandchildren may talk equally nostalgically about that old cracked glass screen relic iPad they managed to get to work so they were able to see obsolete PNG files that no system bothers supporting anymore. They may look at their holocubes and gasp how its not the same as that digital screen that I actually held on my hands before their parents were even conieved.

    13. Re:Pretty simple by Tharsman · · Score: 2

      I may had gone too verbose on my post. My point is that they adapted but they were encumbered by huge branches they were not able to axe.

      We see companies go under every day despite them being slightly profitable, simply because certain standard can't be sustained without huge sacrifices, and in the corporate world those sacrifices are not accepted.

      Look at Borders. There were plenty of extremely profitable stores in many areas, stores that were packed and busy all day. In theory, the chain would had been able to survive by axing every single unprofitable store and retaining the profitable ones, even if that meant going down to 10% of the former store number.

      Corporate and investors do not accept such moves, though and thats the same type of move Kodak had to move (and is trying to do now but too late by axing the camera business and just keeping printers, under the protection of bankruptcy law, though.)

    14. Re:Pretty simple by mug+funky · · Score: 3, Interesting

      interesting. Kodak made the best neg film in the world, and (maybe?) continue to do so.

      their motion picture stocks are crazy high latitude, and crazy low grain. good fun to work with. the latest stocks barely even need light metering - you'll get a picture even if you fuck up completely.

      cinematographers would only use fuji as a special effect or if they had bucketloads of light and could use a slow stock (which would be a little bit sharper than the kodak, but at the expense of less latitude from having a "thinner" emulsion).

      of course, everyone shoots RED now because they're pov. but they still dream of having the budget to shoot film.

  2. So, let them die. by Geoffrey.landis · · Score: 5, Insightful

    I'm not sure why people think that it wasn't a right and proper thing for Kodak to die.

    Kodak's strenght was film photography. There turned out to be plenty of other companies with strengths in digital, why should Kodak have colonized that market? Let them produce the stuff they're good at as long as people want it, then quietly go away. There's no reason corporations need to be immortal.

    --
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    1. Re:So, let them die. by Tharsman · · Score: 4, Insightful

      I am not sure if anyone is arguing to "bail them out" or anything like that, but it is an interesting experiment to try to figure out what exactly went wrong and what way would had it been possible to save the company.

      I think in the future, during economy or enterprise management studies; Kodak's history will be deeply dissected and studied.

    2. Re:So, let them die. by Kamiza+Ikioi · · Score: 2

      Because they invented the digital camera. They should have capitalized on that fact, my like Xerox should have capitalized on the GUI/mouse system that they had.

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    3. Re:So, let them die. by cshirky · · Score: 5, Insightful

      But this assumes that the natural lifespan of a company is infinite. What I think Geoffrey is saying is that when Kodak went out of business, the answer to "what exactly went wrong?" is that nothing went wrong.

      Here's an analogy: Imagine I offered you one of two things: 200 millions tons of granite rubble, or a cathedral. Which would you pick?

      The cathedral is the obvious choice -- the stone in its raw state is fairly dull, while a cathedral is a spectacular work of architecture, the fruit of countless hours of skilled human effort. The cathedral has value right now, while the rubble isn't good for much without an enormous amount of additional labor.

      What if labor was part of the equation, though? What if I gave you a choice between the beautiful cathedral and the chaotic rubble, with the stipulation that, after you chose, it was your job to build a bridge.

      Now you want the rubble. Though the cathedral and the rubble are made up of about the same amount of stone, building the bridge out of the rubble will consume all the energy required to build a bridge, but building the bridge out of the cathedral will require all the energy needed to build a bridge plus all the energy required to dismantle the cathedral. For some tasks, it's simpler to start with raw material than with a beautiful structure that has to be dramatically altered to serve your purpose.

      Now imagine I offered you one of two things: You have to build a digital photography business, and you can start with Sony, or Kodak. Which would you choose?

      The problem Kodak faced wasn't that they couldn't have become a digital photography business. The problem Kodak faced was that the digital business was so different from what they are good at that the restructuring costs were crippling, *precisely because they were perfectly adapted to the previous era.*

    4. Re:So, let them die. by Tharsman · · Score: 4, Interesting

      I think there is plenty wrong to find in Kodak's history, but not as obvious as many think.

      I went deep into another post in this article here: http://tech.slashdot.org/comments.pl?sid=2695641&cid=39177755

      There is one common trait that Kodak shares with every single other company out there (and most American households, ironically) and it's that they lived nearly month to month. Unlike households (that tend to just want to enjoy the moment so they don’t save for a year of potential unemployment) most companies don’t like having too much money "burning a hole in their pockets" since they feel every unspent penny is missed opportunity.

      They live with barely enough money to pay operational costs for a month or two. If profits go down, they are forced to fire people left and right (why we see investors go crazy for small 2% profit drops.) Some drastic thing happens that changes your market within a year and you will go bankrupt quickly, even if you are willing to adapt or even if you are yourself the first to start such a market trend.

    5. Re:So, let them die. by Rob+the+Bold · · Score: 4, Interesting

      I'm not sure why people think that it wasn't a right and proper thing for Kodak to die.

      Kodak's strenght was film photography. There turned out to be plenty of other companies with strengths in digital, why should Kodak have colonized that market? Let them produce the stuff they're good at as long as people want it, then quietly go away. There's no reason corporations need to be immortal.

      I don't see "people thinking" Kodak should or shouldn't die in TFA . . . more of a postmortem analysis.

      Anyway, I understand that there's no reason for corps to be immortal, but most people working at a given firm would just as soon it didn't go belly up right now while they're working there. Even if you're looking to quit a place, you'd rather do it on your schedule than the liquidator's.

      A sibling of this comment mentions Xerox missing the boat with the GUI, but they seem to have re-invented themselves nowadays doing OCR and image recognition and document and photo management and analysis. Probably too soon to know if this will work, but they did hang on when their market changed.

      Likewise with Kodak, you'd think they could have found other things to do in the photography arena. You've got websites like Flickr that store and share photos, Shutterfly and Snapfish that provide hard copies in formats that an ordinary home or office printer can't produce. Kodak probably should have gotten into those areas, among others. But as TFA mentions, they had such an emotional and physical investment in film they didn't want to let go of it.

      And what about Fuji? They do plenty of digital stuff, but you can still buy their film. TFA doesn't mention what they did differently.

      --
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    6. Re:So, let them die. by nightfell · · Score: 4, Insightful

      But this assumes that the natural lifespan of a company is infinite.

      No, it doesn't. It assumes the lifetime is indefinite, which is different.

      Unlike, for example, humans who live to around 60-125 tops, companies don't have a built-in expiration date (they used to in the US, but haven't for over a century).

      What I think Geoffrey is saying is that when Kodak went out of business, the answer to "what exactly went wrong?" is that nothing went wrong.

      Nothing went wrong with the market. It did what it's "supposed" to do. The question is what went wrong with Kodak. They didn't do what they are supposed to do.

      What if labor was part of the equation, though? What if I gave you a choice between the beautiful cathedral and the chaotic rubble, with the stipulation that, after you chose, it was your job to build a bridge.

      With business, labor is always part of the equation. Digital photography and film photography aren't like a building and a bridge. It's like a building and a building. Would you rather have a pile of rubble to turn into a restaurant, or a cathedral to turn into a restaurant?

      And stone is much more difficult to rearrange than a company, in terms of labor. It's only harder, potentially, in the mental task of coming up with a solution.

      Now imagine I offered you one of two things: You have to build a digital photography business, and you can start with Sony, or Kodak. Which would you choose?

      Or Nikon or Canon?

      The problem Kodak faced wasn't that they couldn't have become a digital photography business. The problem Kodak faced was that the digital business was so different from what they are good at that the restructuring costs were crippling, *precisely because they were perfectly adapted to the previous era.*

      Nonsense. The problem wasn't that they couldn't change, but that they didn't change. Nikon and Canon (and Olympus and Fuji and countless other film-era companies) made the switch just fine.

      Just because Kodak failed (or, "is failing" might be more appropriate) doesn't mean failure was the only possible outcome for Kodak. The *film* side of Kodak must fail, but the *camera* side of Kodak was under no such restriction.

    7. Re:So, let them die. by clairity · · Score: 2

      I went deep into another post in this article here: http://tech.slashdot.org/comments.pl?sid=2695641&cid=39177755

      There is one common trait that Kodak shares with every single other company out there (and most American households, ironically) and it's that they lived nearly month to month. Unlike households (that tend to just want to enjoy the moment so they don’t save for a year of potential unemployment) most companies don’t like having too much money "burning a hole in their pockets" since they feel every unspent penny is missed opportunity.

      the previous point you made is well taken, but this second one is overly broad in that companies vary in the padding they maintain. the amount of cash a company keeps on hand (or doesn't) depends on industry characteristics, competition, regulatory environment, supply chain risk, and other factors like that. apple is a prime (counter-)example here with $98 billion in cash on its balance sheet. this cash is kept for a variety of reasons, but a few to note: the highly dynamic industry that apple competes in, the supply chain risks it's exposed to (including currency risk), and the competitive threat that such a large amount of cash represents to its potential competitors. elsewhere, someone pointed out the adverse tax consequences of paying out dividends with this cash, which is another valid (but tangential) reason to keep lots of cash.

    8. Re:So, let them die. by S77IM · · Score: 2

      I believe the phrase you want is "They were victims of their own success."

      It's a pattern that repeats constantly. Arguing against results is hard, and usually stupid. When some new kid comes along and says, "Let's stop doing X, which has been tremendously successful, and switch to Y, which is the next new thing?" the rational response is "How's 'New Coke' selling these days?" And yet, that new kid will be right some small % of the time. How can we determine when that guy is correct?

      THAT's the question we should all be asking about Kodak.

        -- 77IM

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    9. Re:So, let them die. by grim4593 · · Score: 2

      When I was moving I went through some old college books. I found a 5 year old project management book detailing Kodak's success at adapting to business changes. I threw it out with the rest of the trash.

    10. Re:So, let them die. by Tharsman · · Score: 2

      Sad, would had been an interesting read.

    11. Re:So, let them die. by nightfell · · Score: 2

      Kodak was all about film and film processing.

      Not at all. They were about cameras and film and digital.

      Kodak didn't really make cameras.

      That's exceptionally misinformed. Kodak has made cameras for over 120 years.

      Fuji clings to it a bit, with disposable cameras, but was able to get some foothold in the consumer digital camera space. Kodak? They tried, belatedly, but failed.

      Kodak has made digital cameras for longer than most people even knew what a digital camera was.

      The cool stuff was made by the companies already making cool consumer-level gadgets (e.g., Sony).

      By "(e.g., Sony)", you really mean "(the only example I can think of is Sony)". "I.e." would have been a better choice than "e.g.".

      The cool stuff was made by Sony, and... Olympus, Nikon, Canon, Fuji, um... oh, Panasonic, that's another electronics company (though with a partnership with Leica, but I'll still count it).

      And the "better" consumer cameras were being made/sold by the "real" camera companies, Olympus, Canon, Nikon, who were also able to bring in their existing film camera expertise into the "pro" level cameras, and we all benefit from the trickle-down from there.

      They've all been making great consumer digital cameras for over a decade now, and non-digital consumer cameras for many decades.

      Kodak had no chance, really.

      Can't see why not. Why couldn't they have made nice, cool, compact digital cameras? Oh, that's right, they did. They just failed to execute successfully.

  3. Canon by El+Lobo · · Score: 5, Insightful

    That didn't prevent other giants of traditional photography like Canon and Nikon to evolve and adapt to the new era, successfully competing again the new kinds.

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    1. Re:Canon by fahrbot-bot · · Score: 4, Insightful

      I think the difference is, as someone else pointed out, that Kodak was primarily a photochemical (and film) company, whereas Canon and Nikon are primarily camera companies. With the decline of film, came the decline in photochemical usage. As for other photochemical uses, like printers, companies like HP, Brother, etc... have long-standing reputation. As for film itself, I have friends that have preferred Fugi film for many years.

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    2. Re:Canon by Anonymous Coward · · Score: 2, Funny

      It's time to realise that Abble's products are the biggest abomination these days. Just say NO to the dumb iAbble way!!

      What the hell is an Abble? Whatever they are Apple will probably sue them for using iAbble as a trademark.

    3. Re:Canon by Artagel · · Score: 4, Insightful

      Kodak was in the black and white picture printing business since the 1880s. It was in the color printing business by 1835. Hewlett-Packard was not founded until 1939, and it did not start in printers. Brother made its splash in dox-matrix printers in 1971. Kodak could have been far, far ahead of these companies with what we now consider printers. It would have moved in the direction of Xerox and gotten into the printer business. It just did not. It did not ask itself: who is going to cannibalize me, and how do I get in front? Change hit the accelerator pedal, and Kodak was left in the dust.

    4. Re:Canon by BetterSense · · Score: 2

      You have it backward. The digital revolution was a boon to camera companies, not a blow. In the film era, cameras lasted decades. I'm still using my 1979 Olympus OM1, and I'm not sure it's ever even been overhauled. Digital introduced a market where pros and prosumers would be buying new cameras every year or two...especially in the beginning when technology was advancing fast.

  4. They Did react to the market! by drainbramage · · Score: 3, Interesting

    But poorly.
    I never saw a digital camera from Kodak that I would want to use, let alone purchase.
    --
    I had use of a few of their film cameras years ago, none were great.
    I think they were able to sell the cameras cheaper than other companies because they owned the tech for the film and it's packaging format.
    Other than the cheap point and shoot market I never saw Kodak compete well against any other camera company.
    --
    Loved the film though....
    I bought my first digital camera (Pentax) thinking it would make a nice backup to my various film SLR's.
    I was wrong, I never bought film again.

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  5. They died because they didn't evolve by IWantMoreSpamPlease · · Score: 2

    They were arrogant, and their digital products reflected this. The DCS line of Pro cameras were hugely expensive with some pretty severe limitations, and their consumer line was a joke.
    Rather than correcting that, they ignored the digital market and at the same time couldn't pick a new direction to go with their existing strengths and in the end, pissed it all away. Even now, they have no clue what they want to be, an ink and printer 'giant'? Give me a break.

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  6. Another perspective from a pro photographers view by yodleboy · · Score: 5, Interesting

    read this: A Photographer's Eulogy for Eastman Kodak a couple of weeks ago and it's a good complement to TFA. Among other things, the author recalls a meeting with a Kodak product manager in the early 90's who's response to digital on the horizon was "How do we stop this thing?" He also notes this wasn't the first time Kodak's ego got in its own way. Anyway, an interesting read.

  7. Reasons by necro81 · · Score: 2

    The reason cited in the summary, the shift in a camera being a specialized piece of equipment to a more prosaic electronic gadget, is probably one of the weakest. Serious protographers, film and digital, have always had, and continue to have, a very...uhhh...special relationship to their kit. Casual photographers always regarded cameras as just a do-hickie: a means to an end.

    The big reason, the one that will be cited in every case study on disruptive technology for the next couple of decades, is that even though Kodak invented the digital camera, they couldn't get past the notion of it cannibalizing their film and development business until it was too late. Probably the #2 reason that will be cited is the consumer's shifting relationship to images: the physical artifact, the print, became much less important in comparison to an image that could be emailed to 10,000 people in an instant practically for free. Or to be able to carry around 10,000 images in your pocket. What people wanted pictures for, and where/when/how they wanted to view them, moved away from the physical artifact with alarming speed.

  8. Nope.... by Anonymous Coward · · Score: 2

    Kodak's demise started years ago. The company was very diversified back in the 80's and 90's. Chemicals, pharmaceuticals, copiers, all over the place. Then someone took a look at the margins, and decided that the margins the company was seeing on film needed to be the benchmark for the company. Margins on film are ridiculous. Nothing could touch them, and it was a dangerous drug. If Kodak had to make a decision between diverting some cash away from film and into an emerging technology, they choose film. Then, one by one, less profitable areas were sold or spun off. Over the years they used those sales (and layoffs) to offset the dwindling returns from the film manufacturing.

    Kodak was in a perfect position to take a major bite out of the digital market early on. But right around the time they decided not to make traditional film cameras any more and switched to disposables, they also decided that the market was rich enough to support digital photography.

    In the end they sold and cut as far as they could go. Meanwhile many of the other properties that Kodak shed along the way are doing very well, and would have provided tentpoles for the company to survive under.

  9. But...Kodak invented digital cameras by MpVpRb · · Score: 5, Interesting
    From Wikipedia...

    1975: Steven Sasson, then an electrical engineer at Kodak, invented the digital camera.

    1976: The Bayer Pattern color filter array (CFA) was invented by Eastman Kodak researcher Bryce Bayer. The order in which dyes are placed on an image sensor photosite is still in use today. The basic technology is still the most commonly used of its kind to date.

    They also produced the first digital SLRs

    http://en.wikipedia.org/wiki/Kodak_DCS

    And, their sensor division made extremely high quality sensors for scientific, industrial and consumer cameras.

    Makes it even more ironic and baffling that they couldn't make it in the digital world.

    1. Re:But...Kodak invented digital cameras by FaxeTheCat · · Score: 3, Interesting

      They also produced the first digital SLRs

      ... and on the camera house it says NIKON. So they produced a digital back end for a Nikon camera (I once had a print from a picture taken by it. The noise level was nothing short of amazing...).
      Which may explain why Nikon is still big in cameras, while Kodak is not.

  10. Re:The industry disappeared by peragrin · · Score: 2

    The thing is Kodak sold off the non film production and R&d. Those companies are still profitable.

    Kodak literally made one product and when the market for that product dried up so did Kodak. It all falls down to diversification. Kodak wasn't and so died.

    Do we prop up car companies when someone invents the teleporter?

    Microsoft will probably suffer the same fate. It has two products windows and office. Without those Microsoft wouldn't be profitable and would soon be in bankruptcy themselves

    --
    i thought once I was found, but it was only a dream.
  11. Oversimplification by Comboman · · Score: 4, Informative

    They failed to react to changes in their market.

    That's not entirely true. They saw digital photography coming before most people did (they still have many of the original digital photography patents to show for it). They had digital cameras on the market while Canon and Nikon were still saying bits would never replace film, and Sony was still making cassette Walkmans. Their biggest problem was public perception rather than reality. People still saw them as a film company rather than a camera company.

    --
    Support Right To Repair Legislation.
  12. It's about the film. by Animats · · Score: 4, Insightful

    What killed Kodak was the demise of the photographic consumables business. They had a 70% margin on film. The margin on photographic paper was probably even higher. And the developing business was profitable, too. All the consumables products had strong repeat business. Digital cameras offered none of that.

    Kodak kept trying to somehow attach a consumable to digital photography. They tried PhotoCD, printer paper, and ink. They even tried selling flash memory cards. They bought Ofoto, an early picture-sharing site, and tried to make it a pay service. None of those offered the margins or market presence that film did, and none were notably successful.

    Without a consumables business, Kodak had no competitive edge.

    The end came when cameras became a component of phones. There was no longer a defined low-end photography business at all.

    1. Re:It's about the film. by starfishsystems · · Score: 3, Insightful

      They tried PhotoCD, printer paper, and ink.

      Unfortunately, Kodak charted a doomed strategy with PhotoCD by making the format proprietary. Rather than locking customers into the format as Kodak may have intended, the decision created a huge disincentive for the emerging digital image processing industry to go anywhere near it. And it created a perception that Kodak was not a credible player in that industry.

      --
      Parity: What to do when the weekend comes.
  13. The Economist did it better by PCM2 · · Score: 4, Informative

    This article struck me as pretty weak. The Economist has done a series of articles on Kodak and I think theirs were much more thorough and insightful.

    Technological change: The last Kodak moment?

    Kodak's woes: Out of focus

    Kodak files for bankruptcy protection: Gone in a flash

    I'm not sure how much of that is accessible to nonsubscribers...

    --
    Breakfast served all day!
  14. Kodack digital was poorly thought out by the_Bionic_lemming · · Score: 2

    I would of kept purchasing kodak if they hadn't pulled the stupid bit with their docking stations being different for each line of cameras they sold. It's bad enough when many companies can't settle on a simple USB plug in but when you have to throw away your old docking station and printer because you changed to a different model line just so they can force you to rebuy stuff - that was too much for me.

    I ran into that on a warranty repair. They no longer supported that model and sent me a replacement that had a different dock than the original - so while the camera was fixed/replaced - the entire setup I bought was rendered useless. When I called and complained they weren't helpful at all.

    That's all it took to never buy kodak again.

    --
    _ _ _ Go for the eyes Boo! GO FOR THE EYES!
  15. Crappy consumer cameras by formfeed · · Score: 2

    Yes they embraced digital, but not full heartedly. And they had a good brand name but did not capitalize on that with their cheaper cameras.

    When digital cameras came out, people bought Kodak for brand quality. Over the years it just turned into cameras with a Kodak label slapped on. The attitude: We have to be in this market, but these aren't the real camera buyers.

    I got an older 8MP non-Kodak, which allows for manual focus, manual stops, and exposure settings! The 7MP Kodak Easyshare has none of that, just "modes". Well, it at least has some bracketing, where it lets you take three pictures in a row. With the 14MP Kodak Easyshare that was gone as well, instead it has exciting new features like smile detection...

    In the old analog world, that stuff used to be Polaroid's brand image, not Kodak's. Don't do Disney if you have a professional brand name. The same hardware could have provided an "expert-mode" and -even if most people wouldn't use it- been seen as a limited beginners version of a better camera.

  16. Re:Absolutely. by ZeroSumHappiness · · Score: 4, Insightful

    I think I just realized why we have this derisive and abusive notion that a person who uses a point-and-shoot cameras is "just some dork with a camera." We're conflating the art of photography with the practice of recording an event in a visual format using the science that allowed for both. Unfortunately, these two acts do not have separate words in English so I will coin one now...

    Let us call the act of taking pictures to record events "picturing" instead and things become far more clear:
    This lets us say: "Casual picturers always regarded cameras as just a do-hickie: a means to an end."

    You would be an amateur photographer (yes, amateurs can still be called amateurs even when on a shoe-string budget) rather than a picturer. I am "only" (though to be derisive about such a thing is to misunderstand) a picturer. I have no interest in the art of photography but I would like to have a keepsake to help remember that time I climbed a mountain. However, to call me "some dork with a camera" is unfair to me. It is not my intent to make great art, only to have a memento of the past that I can show others.

    So can we stop being pompous jerks about photography so that I don't get chided for having poor composition skills and not understanding what f-stops are for?

  17. Being very close to it by guruevi · · Score: 2

    I know several people that worked at Kodak and I interviewed quite a few times with them. IMHO these are the problems:

    - They didn't want to believe digital was going to take over the market. They believed analog was superior (which it was back in the day) but also that it wouldn't improve and people always would need analog copies. This is true to an extent but their developing process was horrendously overpriced and the stores that developed internally went with Fuji or any other competitor.

    - Bad management. They had several layers of management and most of them were incompetent. There were entire divisions being ran without the knowledge of Kodak leadership. Duplicated efforts, bad building, bad quality assurance, several layers of customer service and technical service. Even their later printer divisions suffered from the old structure.

    - Patent warfare. Instead of trying to compete they started using patents and contracts as an offensive measure which brings some cash in the short term but it burns out really quickly as their competitors could easily pay for the settlements and the limited settlements they did have (as many of their patents were invalid) could not account for the waste that is still going on to this day.

    --
    Custom electronics and digital signage for your business: www.evcircuits.com
  18. Re:Absolutely. by Crypto+Gnome · · Score: 3, Funny

    So can we stop being pompous jerks about photography so that I don't get chided for having poor composition skills and not understanding what f-stops are for?

    Seriously, NO!

    Photography is just about the last thing I have left to (at least vaguely) legitimately be a pompous jerk about.

    I've probably spent more in glass than you spent on your last car!

    Hell, they *invented* a new term for people like me! (Pro-Sumer aka people with more money and delusions of competence than any real-talent, although sheer force of good-luck does occasionally turn up some diamonds).

    --
    Visit CryptoGnome in his home.
  19. Re:The industry disappeared by jackbird · · Score: 2

    Where? Nobody does film separations for offset printing anymore (it's all digital straight-to-plate); X-rays use digital plates now; a growing number of feature films are shot, mastered, and delivered to theaters digitally; and microfilm is dead.

    The only photochemical process still in widespread use that I can think of is light-sensitive emulsion goo for making silkscreens, and you can't run a multinational corporation with small T-shirt shops as your customer base.

    I'm curious what you have in mind.