Kodak's journey towards bankruptcy.....

[Kirk Gittings]

Interesting overview of Kodaks recent history. http://www.technologyreview.com/busi...nld=2011-12-09

[SamReeves]

They said Agfa would emerge from bankruptcy. That lasted all of several months? Time to stock up on E100G sheets.

[Greg Blank]

I like the #2 comment at the articles site, "you don't lay off half your work force and give the CEO a 20 Million dollar raise."

[IanG]

They said Agfa would emerge from bankruptcy. That lasted all of several months? Time to stock up on E100G sheets.

Agfa MCC B&W paper's are still manufactured under the Adox brand name using some of the old Agfa machinery by Adox/Fotoimpex and partners. Their chemistry is still made in the same plant although made in batches to be sold by third parties. The Gevaert plant still makes films and Fotoimpex are also coating film.

Agfa, the parent company never went bankrupt. Kodak's film division is still profitable it's the parent holding company that's in trouble, so that's quite different to Agfa.

I like the #2 comment at the articles site, "you don't lay off half your work force and give the CEO a 20 Million dollar raise."

There was an article a couple of years ago about how one non executive director influenced the appointing of senior executives including Peres who despite very high salaries failed to tackle the grass roots problems in the company effectively squandering the vast wealth of cash reserves that Kodak sat on.

Ian

[J. Fada]

It is interesting to me that as much film was sold in 2004 as in 1995, although it has been downhill from there. I have said this before, but if Kodak goes out of business, it would be good for film in the long term, maybe not for color but definitely for black and white. Kodak is like the 500lb gorilla in the film room. The other thing to think about is that Kodak doesn't have a "scaling down" philosophy historically. They just stop making things when they become unprofitable. Film could arrive at that point soon for them.

The other interesting thing to note from that article is that digital camera sales have been declining for the last several years. Camera phones have achieved a level that is good enough for the vast majority of people and at the other end of hte spectrum, how much resolution is really needed for professionals? The answer is it has already been achieved. I wouldn't be surprised if we see camera manufacturers scaling back over the next decade with longer intervals between new camera models. We have already seen this with Canon for example. Many pros use the 5DII instead of the 1DSIII and how many of the new pro flagship camera have been sold?

This is all speculation so I am sure that people will argue with me about it. I could be totally, probably am mostly, wrong. It will be interesting to see where photography is in another ten years though. I have to wonder if we will even recognize it.

[Ben Syverson]

Their film and paper business is still far too profitable to shut down completely... Even if Kodak does dissolve, I imagine some private equity firm will buy the production lines we're concerned with and keep them running. They would probably negotiate to continue using the Kodak branding.

The worst case scenario is that no buyer can be found, and the tools and machines are parted out. Hopefully if that happens, they will fall into the right hands. With Polaroid we were lucky—Lomo was able to buy a few of the key machines and start The Impossible Project.

[Kirk Gittings]

Many pros use the 5DII instead of the 1DSIII and how many of the new pro flagship camera have been sold?

The pros that use the 5dII like me instead of the higher level cameras are generally people who don't shoot action in difficult weather. Most of the upgrades in the higher level cameras have to do with speed and weatherproofing. The top end cameras offer me, as an architectural shooter, very little of real value for the significantly higher cost.

Also tech improvements tend to be introduced in the higher level cameras and then filter down to the 5D a year or more later. So tech heads that want the lastest and greatest tend to buy the the top end cameras as they come out.

[Drew Wiley]

I just find it somewhat less than coincidental how many publicly traded US mfg corps
are going under lately. Each has their particular excuses, and each is topheavy with
obscenely overpaid upper mgt playing Wall St games. If Kodak were privately held, we'd probably never be having this conversation. Unfortunately, color film requires quite an infrastructure and probably can't simply be sold off to a minor league coating line. Meantime, I guess I'll attach a strip of velcro to my cell phone so I can use a
dark cloth with it, but I still haven't figured out which button actually takes a picture.
It seems to trigger inside my pocket and all the shots come out black. Night photography. I can always Fauxtoshop some clouds and stars afterwards.

[rdenney]

It should be noted that the film portion of Kodak is still profitable, and has been consistently profitable. The digital portions of Kodak have been the money losers, maybe because Kodak had technology but not market savvy in that industry. They aimed too low with their consumer cameras and printers, and too high with their big sensors, though those have been fairly successful even so.

The problem with film hasn't been the bottom line. Kodak has actually done pretty well, despite all that we read and see, scaling their production of film back. This fact surprises me, given the size of their machines and all we hear about their production, but they must have scaled back pretty well to remain profitable at any level having lost 90% of their revenue.

The problem with their film production, and the article did a good job of bringing it out, is the top line. They just can't build a big cash stream on film, because too little is sold. It's profitable, but it doesn't bring in enough turnover of revenue. That causes its owners (i.e., stockholders) to run, and they can't fund a recovery approach (even assuming they have one).

The problem with their digital stuff is that they hoped it would replace the revenue stream lost to film. But it didn't--the market would not support a high-markup business model. Even now, I suspect Canon, Nikon, and others make their money mostly on lenses, batteries, flashes, and other accessories rather than cameras. Kodak abandoned production of those items decades ago. So, even if they had developed a strong top-line revenue stream from digital stuff, they would not have had the bottom-line performance they needed. So, they focused on digital components that were either really cheap to produce to try to generate volume, or high-end stuff with a high markup to sweeten the bottom line (such as their still state-of-the-art medium-format sensors). The cheap stuff never produced the volume and the model seems to have failed.

I suspect a bankruptcy is the only way everyone's expectations can be sufficiently reformed to make it possible to become a successful small company. They are no longer a big company and it seems clear to me that they never will be. The sooner they stop thinking like one, the better their survival chances.

The bigger question for us is: Will there be a large enough market for color film to support its continued production at any level, at sustainable costs and price points? Black and white is not, it seems to me, at issue--small coating operations already exist providing products of at least adequate quality, by all accounts. But color is altogether more complex and demanding of the production process.

Kodak has sold off their imaging group, which, as I understand it, makes their big sensors. They retained full product development and usage rights, though I'm not sure what value that has for them. Hopefully it will mean that if Kodak goes down, it wouldn't take cameras like the Leica S2 and Pentax 645D, which use Kodak sensors, with it.

Rick "thinking we had better start visualizing a world without the yellow box" Denney

[MDR]

Contrary to popular belief Agfa still exists Agfaphoto went bankcrupt not Agfa-Gevaert which still produces a wide range of photographic products just not standard B&W and Color Emulsion for the Amateur and pro photographer market but for the military, medicine, etc...market.

Dominik