Kodak announces plans to sell consumer film division

[Drew Wiley]

Frank - once you get into the idea of direct internet sales, you're existing distributors will
likely dump you (they can't have it both ways), and then they've got another kind of huge
headache with potentially knucklehead Satrbucks types running it. Good way to go out of business forever. I'm just about to dump a mfg for attempting that - and I'm their biggest
account on the West Coast! It costs me time and money to stock the products and deal
with any aftermarket issues - no online service is going to bother with that, or in most cases, even bother giving their staff a true legal wage, let alone a livable one.

[Drew Wiley]

Maybe we should all simply invite the Kodak CEO to a roundtable discussion in a tent cabin
in Yosemite, but with one less respirator on hand than the number of people invited!

[BrianShaw]

He probably already goes to Bohemian Grove. Have they had an outbreak yet?

[Frank Petronio]

He is driven into an underground garage in his Bentley, avoids as much public contact as possible. Imagine he'd get pelted with truffles and sashimi if he dared showed his face at the Pittsford Wegmans....

[rdenney]

Forget the smaller retailers since they already gave up on each other years ago anyway.

Take the Kodak brand and do what a couple hipsters did with Lomo or the Impossible Project, and just sell film and even other brands of film-related gear over the Internet. Once that takes off, open boutique stores in major cities aka Apple, Leica, or the Impossible Project. Still sell wholesale to major vendors like Freestyle and B&H, much as Lomo does now.

Make it a high end brand again, staff the internet center and stores with "geniuses", offer classes, galleries, and inspiration. It could scale 100x what Lomo has been doing and they could strategically partner with good companies to promote film usage to a new group of younger customers.

Of course they have to go bankrupt and cut themselves lose from the old company's obligations and make a fresh start.

This is exactly the correct strategy, it seems to me. Many storied old American mass-producers have found new life, at least as a brand, by becoming a high-end boutique item rather than a mass-production item. Example: Schwinn bicycles, which used to make all their money making (well-made) low-end bicycles in high volumes, found that they ultimately could not compete with Asian mass-producers, when the only measure of competition was price point. Schwinn went broke, the brand was bought by a conglomerate, who then also went broke, and the brand was sold to yet a different conglomerate. That conglomerate owns the brand, but not the prestige end of the market. On the other hand (and more relevant for us), Richard Schwinn bought out the Schwinn Paramount facility (with others) and started making Waterford bicycles, a highly respected boutique brand sold directly to cyclists, or to a select group of high-end bike shops (not through distributors).

Kodak may find a mass-production market for some of their product lines, but if they want to sell film, they will need to build a high-end boutique-brand business model, which means a direct-to-consumer high-service delivery model, rather than selling product in chain retail stores the way they used to.

Fuji could learn this lesson, too.

The cost of production includes a large fixed cost (the machinery and the people needed to operate it). It needs to serve various disparate market areas to stay productive, including cinema and still film. And even still film serves a couple of different markets. But still film could easily be sold as a boutique item over the Internet with a very low distribution and retailing cost. A few of the bigger camera stores will still buy it at wholesale and sell it, but the business model won't be based on a dense retail sales chain the way it was. It will remove the distributor between the brand owner and the retail outlet in any case. They may not be able to reduce the fixed plant expenses, but they can reduce the cost of sales.

Rick "not sure about the branded boutique stores, though" Denney

[rdenney]

Frank - once you get into the idea of direct internet sales, you're existing distributors will
likely dump you (they can't have it both ways), and then they've got another kind of huge
headache with potentially knucklehead Satrbucks types running it. Good way to go out of business forever. I'm just about to dump a mfg for attempting that - and I'm their biggest
account on the West Coast! It costs me time and money to stock the products and deal
with any aftermarket issues - no online service is going to bother with that, or in most cases, even bother giving their staff a true legal wage, let alone a livable one.

Drew, you are building a castle in the air, it seems to me. The distributor model is what is truly dead regarding film, if the film is not going to be sold in non-photographic retail outlets like drug, grocery, and department stores. And those are the outlets that are vanishing altogether. Trying to support a distribution model to support a non-viable retail chain is likely a bigger problem than keeping the machines going. I suspect that there are fewer retail stores that could sell any useful quantity of film products than there were distributors 20 years ago. The factory should just sell at wholesale directly to them. That way, they can increase their cost model to maybe 40% of retail rather than 10 or 15% of retail as they currently must do with a multi-layered distributor business model. Without the distributor layer, they can scale costs up or down far more quickly in response to the market.

By the way, Starbucks mostly owns its retail outlets, and their model depends on walk-up retail sales. It's a completely different retail service model than what would be appropriate for Kodak as Frank describes it.

Rick "more direct is better" Denney

[BrianShaw]

B "I agree" S

[adam satushek]

I really like the idea of Kodak boutique stores. Yellow Kodak branded store fronts would look awesome. And yeah they could do workshops, classes, photo shows, and sell inexpensive hip cameras like lomos, holgas, and 4x5 pinholes (or Ben Syverson's Wanderlust..?...), just fun cameras to get people hooked on film. Seems like offering developing, scanning, and printing services would be a good idea too. They could also sell hip photo related gear like vintage looking Kodak shirts and hats and scarves and such to get the kids interested.

I like to think there would be enough of a market for them....but i certianlly am not a business man....if it was me I would throw a cocktail bar in there too just for good measure....

I joke (a little), but it actually seems like a great idea. Again, I am pleased with any solution that results in me being able to continue using Portra.

[Oren Grad]

Kodak may find a mass-production market for some of their product lines, but if they want to sell film, they will need to build a high-end boutique-brand business model, which means a direct-to-consumer high-service delivery model, rather than selling product in chain retail stores the way they used to.

FWIW, so far Harman has resolutely stuck with a national-distributor model. Their situation is a bit different, in that they were never in every drugstore like Kodak was. Nevertheless, the number of retail outlets carrying Ilford products has contracted considerably too.

[rdenney]

FWIW, so far Harman has resolutely stuck with a national-distributor model. Their situation is a bit different, in that they were never in every drugstore like Kodak was. Nevertheless, the number of retail outlets carrying Ilford products has contracted considerably too.

Of course, Harman products must be imported into the U.S., which make a distributor important to run interference with the powers that be over such matters.

Rick "suspecting that the importation issue is at least part of Fuji's problem in selling low-volume stuff in the U.S." Denney