Kodak: the end of an era...

     

Strange to recall, Kodak was the Google of its day. Founded in 1880, it was known for its pioneering technology and innovative marketing. “You press the button, we do the rest,” was its slogan in 1888. By 1976 Kodak accounted for 90% of film and 85% of camera sales in America. Until the 1990s it was regularly rated one of the world’s five most valuable brands. Then came digital photography to replace film, and smartphones to replace cameras. Kodak’s revenues peaked at nearly $16 billion in 1996 and its profits at $2.5 billion in 1999. The consensus forecast by analysts is that its revenues in 2011 were $6.2 billion. It recently reported a third-quarter loss of $222m, the ninth quarterly loss in three years. In 1988, Kodak employed over 145,000 workers worldwide; at the last count, barely one-tenth as many. 

While Kodak suffers, its long-time rival Fujifilm is doing rather well. The two firms have much in common. Both enjoyed lucrative near-monopolies of their home markets: Kodak selling film in America, Fujifilm in Japan. A good deal of the trade friction during the 1990s between America and Japan sprang from Kodak’s desire to keep cheap Japanese film off its patch. Both firms saw their traditional business rendered obsolete. But whereas Kodak has so far failed to adapt adequately, Fujifilm has transformed itself into a solidly profitable business, with a market capitalisation, even after a rough year, of some $12.6 billion to Kodak’s $220m. Why did these two firms fare so differently?

 Fujifilm, too, saw omens of digital doom as early as the 1980s. It developed a three-pronged strategy: to squeeze as much money out of the film business as possible, to prepare for the switch to digital and to develop new business lines. Both firms realised that digital photography itself would not be very profitable. “Wise businesspeople concluded that it was best not to hurry to switch from making 70 cents on the dollar on film to maybe five cents at most in digital,” says Mr Matteson. But both firms had to adapt; Kodak was slower. “Kodak aimed to be a digital company, but that is a small business and not enough to support a big company.”Perhaps the challenge was simply too great. “It is a very hard problem. I’ve not seen any other firm that had such a massive gulf to get across,” says Clay Christensen, author of “The Innovator’s Dilemma”, an influential business book. “It was such a fundamentally different technology that came in, so there was no way to use the old technology to meet the challenge.”

The last Kodak moment? Kodak is at death’s door; Fujifilm, its old rival, is thriving. Why? The Economist, 14.01.2012

"The company that pioneered the creation of the digital camera was eventually brought down by its failure to invest in its ground-breaking invention."

by Rupert Neate, Kodak falls in the 'creative destruction of the digital age', Guardian 19.01.2102

 "Kodak's success was based on a business model of genius. They sold film, they sold the chemicals you used to develop the film and then they sold the paper that the photographs from the film were printed out on. As a result, when digital technology challenged their perfect model, it was too easily dismissed by executives who had spent their entire career in the world of film, chemicals and paper.So, they were found wanting when Fuji launched a price war against them in the film market in the late 90s. When digital cameras made it to the mass market at the turn of the century, Kodak started a process of catch-up that has continued until the present day.

It is no coincidence that many of the businesses that have experienced some of the greatest ravages as a result of digital technology had just experienced the most spectacularly successful periods in their corporate history. And, like Kodak, their success came from the continuous execution and optimisation of a single, successful business model.The music industry was rocked by the world of downloads just after the spectacular success of the launch of the CD.The newspaper industry was riding high on two decades of growth in classified advertising, only to see almost all of it disappear again within a decade."

by Simon Waldman, Kodak: why the moment has passed, Guardian 19.01.2102 - Simon Waldman is the author of Creative Disruption: How to Shake Up Your Business in the Digital Age

The digital camera is a toy to play with; when we're done with it, we forget about the pictures. There is no denying, however, that this new age of popular photography is liberating. Not usually one to grab the latest gadget, I got a digital camera early on and suddenly it made photography exciting. The quality of these cameras, with their precision lenses and vast canyons of digital memory, has meant the amateur no longer feels so amateur: if a Kodak moment was sentimental, a digital moment can be staggeringly aesthetic. Look, I'm not that nostalgic for the Kodak age. It was also a time when art photography surrounded itself with a pious mystique, while popular snappers were stuck with fairly low-quality images that, by their nature, could never be especially fine or beautiful. Today, we can all experiment with the wonders that cameras have become. What we do not have – and will not have – are the cherished memories that photographs used to be.

Thanks for the memories, Kodak – you made photographers of us all, Guardian 19.01.2102