Zeiss on future of film.

**David Crossley** · 18-Jan-2006, 09:53

Recently posted in the latest issue of Zeiss's " Camera Lens News " January 2006.

< How about the Future of Film?

We know that a variety of documentation applications of extreme importance rely heavily on silver halide film - if not for image origination, then at least for image archiving. Military aerial reconnaissance (often with Carl Zeiss aerial cameras and lenses) today relies on digital technology for immediate availability, but continues to use film for reliable long-term storage.

Film is the medium of choice for long-term archiving, and is expected to remain so for the foreseeable future. This is why we are so confident about the future of film

And how about Fujifilm and Kodak?
During a recent industry association meeting, we had the opportunity to speak about the future of film with Helmut Rupsch, Business General Manager, Fujifilm-Düsseldorf and Rainer Dick, Business General Manager, Kodak Digital & Film Imaging Systems. Though both companies have been experiencing declining film sales over the last two years, as the amateur and professional photography markets transition from analog to digital, both gentlemen report still very healthy business with film. These two industry representatives, who are in a position to know the facts, confirm that neither company is considering stopping film manufacture. Both gentlemen are confident that their companies will continue to supply film – usable in the ZI camera and others – for decades to come. >

Zeiss also announces plans to produce (spring 2006) two new "Planar T" lenses in the 50 and 85mm focal lengths fitted out in the Nikon F mount. F6 film body and D200 are specifically mentioned as partners for these new optics....

" Camera Lens News " can be read in it's entirety @ http://www.zeiss.de/C12567A8003B58B9/?Open

David Crossley/Crossley Photography....

**bglick** · 18-Jan-2006, 10:47

David, great article and a breathe of fresh air :-)

Of course Ziess is a company, like us, who want film to be here for a long time. There is plenty of information to counter the position they take.

I wonder if the annual reports of Fuji / Kodak show the actual sales and margins on film sales. Profits are still the biggest indicator of future availablity of a product line. Anyone own Kodak / Fuji Stock and get the annual reports?

**Michael Kadillak** · 18-Jan-2006, 11:09

From Kodak's second quarter 2005 earnings statement a bit outdated, but still pertinent:

Traditional Strategic Product Group Revenues:

Net worldwide sales of the film capture SPG, including consumer
roll film (35mm and APS film), one-time-use cameras (OTUC),
professional films, reloadable traditional film cameras and
batteries/videotape decreased 31% in the second quarter of 2005 as
compared with the second quarter of 2004, primarily reflecting volume
declines and negative price/mix partially offset by favorable
exchange.
U.S. consumer film industry sell-through volumes decreased
approximately 25% in the second quarter of 2005 as compared with the
prior year quarter. Consumer film industry volumes in the U.S. are
expected to decline, as previously communicated, up to 30% for the
full year 2005. Kodak's worldwide projection for consumer film
industry volume decline was previously forecast at approximately 20%
and is now expected to decline in the range of 23% to 27% for full
year 2005 primarily as a result of accelerating industry declines in
emerging markets.
Net worldwide sales for the retail photofinishing SPG, which
includes color negative paper, minilab equipment and services,
chemistry, and photofinishing services at retail, decreased 23% in the
second quarter of 2005 as compared with the second quarter of 2004,
primarily reflecting volume declines and negative price/mix partially
offset by favorable exchange.
Net worldwide sales for the wholesale photofinishing SPG, which
includes color negative paper, equipment, chemistry, and
photofinishing services at Qualex in the U.S. and CIS (Consumer
Imaging Services) outside the U.S., decreased 45% in the second
quarter of 2005 as compared with the second quarter of 2004,
reflecting continuing volume declines partially offset by favorable
exchange.
Net worldwide sales for the entertainment film SPGs, including
origination and print films for the entertainment industry increased
12%, primarily reflecting volume increases and favorable exchange
partially offset by negative price/mix. Entertainment films continued
to benefit from a robust market and higher volume driven by
simultaneous worldwide releases of major feature films.

Traditional Products and Services Revenues:

Net worldwide sales of traditional products, including analog
film, equipment, chemistry and services were $245 million for the
current quarter as compared with $242 million for the prior year
quarter, representing an increase of $3 million, or 1%. The increase
in net sales for the period reflected favorable impact from exchange
of 2%. Partially offsetting exchange is the decline in net sales
primarily reflecting lower volumes and unfavorable price/mix for the
film capture and output SPG.

When you look singularly at the traditional products and services group individually, you quickly realize that it is a very stable financial unit and $240 million of sales is decent. Because the corporation is so diversified into so many product lines it becomes difficult to get a real sense of just sheet film. I was told that traditional film sales have not declined as mucha s anticipated but we will have to wait for internal confirmation that this is actually the case. Hope I did not muddy the water to much.

Cheers!

**bglick** · 18-Jan-2006, 11:59

michael, great find, where is this from?

Well, the obvious drop in 35mm film makes sense and is severe. However, the $245 million you refer to is a signficant number, assuming its profitable. But with that much volume, typically, there is ways to keep it profitable.

I don't think the sheet film portion of this is very important as all the film comes from the same machines, same raw materials, etc. I am willing to bet most sheet films will be around as long as roll film, except maybe 8x10 if the volume gets so low its not worth cutting it. Great post! This is the first time I got a feel for the sales volume, and even if sales have dropped 80% since pre digital, the remaining sales is still signficant vs. their 12 billion in annual sales.

**ronald moravec** · 18-Jan-2006, 12:10

That R Dick and the ceo better get their stories straight. The ceo says analog is out.

With paper gone, whom do you believe? Better give somone else all the support you can as soon as you can and that means buying no Kodak film.

K has a history of looking at each product as a profit center not realizing they are all linked. Paper is just the latest example.

Fire the bean counters and marketing experts, then get the top staff.

**Arne Croell** · 18-Jan-2006, 12:30

WG, unfortunately sheet film does not come from the same roll, although the same machines are probably used to coat them. All or most sheet film has a Polyester base (Estar is Kodaks trade name I think) whereas both 35mm and 120 film typically uses a triacetate base. Polyester has better dimensional stability, but is not practical for roll film as it tends to keep the "curl" even after processing.