Film & entertainment revenues are still dropping, but should be about $1.5 billion this year. That's still a big company. What was Ilford? less than $50 million? There will be a bottom somewhere. Maybe the business is viable at $500MM assuming no debt.
Thanks for the clarification. I guess it was 2007 when they moved all of the production to the 'new' facility and closed whatever remained (at least at the Park).
Originally Posted by Photo Engineer
I've read comments from a few ex-Kodak employees who have opined as did PE on the MANY big management mistakes that have been made, including passing on the electostatic photocopy process (Xerox). So the problems probably predate the advent of digital photography.
Of course, there is also the case of Agfa (and Ilford, who appears to have recovered) -- Kodak is not the only company that has suffered from this technology change.
I would thing this would be a big bonus for Illford. Will we have film and paper to use. That is all I want
That is my take as well. I suspect that a lot of Kodak's business has already migrated to Ilford and Fuji. I expect that those two will see a wave of interest in various products, and with very little competition, they will be able to raise prices.
Originally Posted by Malibucompany
I have been continuously puzzled how EK got to this point. I would guess that most companies anticipating a monotonic decrease in demand for their product will immediately set a firm timeline to discontinue it. Perhaps let somebody else make the product if they'll pay a healthy fee, or raise the price right up to the point that it starts to choke off the demand (watch Fuji, they do get it). But then announce that it's being discontinued, take that last bit of profit from the final run on the product, and move on to another product with growing demand.
The absolute last thing any company wants is an excess of workers and dormant facilities and a lot of expiring inventory- that is certain death. In that case, you just take on more and more debt. So it's *far* better to err on the side of undersupply and high prices. But Kodak has not been anywhere close to that, as far as I can tell.
I guess the best explanation for what happened is that demand dried up much faster than they could scale down. But when you are in the business of designing the successor to your product, when you are cannibalizing your own market, you should know exactly how quickly the demand for one product is going down as the other goes up....
I guess they also assumed that their print business was going to take off. That also mystifies me, it's such an obvious mistake. Wasn't it obvious what the net and social networking were doing to print sales? Sharing kills print demand. Polaroid was already getting hammered by the same thing. People were already talking about megapixels on their phones... and digital pictures frames, for crying out loud. The appreciation for fine prints was very clearly being replaced by the desire to share low res images with everybody on earth via facebook and myspace (and now twitter). A lot more shots being taken, a lot fewer being printed.
Just a lot of really poor anticipation. Sad.
Kodak estimated 30% for the year and got 30% in a quarter. That is 4x the decline in sales!!!!!
The new facility was in use before ten end of the 90s.
-30% in a quarter is death for sure. Especially in a business that, like a bakery, has to keep pumping out fresh product.
How much more can demand really fall? I mean, I saw one person shooting film in the past 12 months and thousands shooting digital. Anyone in the US, Europe, or Japan that is shooting film now is likely to continue doing so. I don't know about Hollywood, maybe that could fall much further yet.
I think it indicates two things: (1) demand for Kodak products really is falling unmanageably, and (2) that people are swiftly changing allegiance to Kodak's competitors.
Originally Posted by Hatchetman
Whether it's more of (1) or (2) we can't say, without seeing Fuji and Ilford's numbers. That we haven't seen much price change in Fuji/Ilford suggests to me that it's more of (2) than (1).
Most company failures are due to trying to remain the same with the same products in a changing market. There is usually a lot of complacency with companies and they are very slow to adapt to new markets and methods.
Kodak's situation is strange as they saw change coming and tried to adapt to it but unfortunately, it hasn't worked out as well as planned. Ironically, if they had stuck to what they knew best, they might be in a better position now. Smaller perhaps, but without so many loss making divisions to support.
Kodak is seeing huge drops due to the economy, the shift to digital and the shift of loyal customers to Ilford and Fuji. This latter has been due to the clumsy management of the analog sales and distribution system! It is a confusing mess.
Today, it got worse: http://www.bloomberg.com/news/2012-0...financing.html
So, things continue their downward spiral.