Kodak Reports 1.03 Billion Dollar Loss for 3Q

[Honu-Hugger]

I always thought it was kind of funny - many people 'in the know' used to run Kodak down at every turn (sometimes with very legitimate criticism, true) and "Yellow Box" was a bit of a perjorative. Now they are mad that the company they loved to hate is getting out of the film business. I have to go "HUH?"

Best Regards,

Bill Mattocks

My late uncle spent his entire professional career at Kodak; he was the General Manager for the Consumer Products Division. Because of his involvement with the company I had some insight into what actually had to occur in bringing the film we loved to market, and perhaps with some admitted bias I believe Kodak was extremely dedicated to bringing out the best possible product they could. For their efforts I was loyal to them, but now it is difficult to maintain that loyalty (sorry Uncle Gordon -- I held out as long as I could :angel: 🙂).

 

[KoNickon]

Kodak's film lines have no doubt been subsidizing their move into digital in large part. Like every other manufacturer, they've seen which way the market is moving, and probably their late start on digital is compensated for by their huge market presence. They seem to be on the track to stabilizing, the one-time tax hit notwithstanding.

They hadn't been a "serious" camera manufacturer for a long time, not since the Retina days. Now that film competes with digital, they've had to become a hardware maker again (and compete with the traditional camera makers as well as the electronics manufacturers), or totally lose out in the digital world.

Lots of people still shoot film, though it does seem like casual shooters (weddings, trips, etc.) get one-time use cameras rather than rolls of film. So I expect EK will be making film for a long time to come, albeit with less and less commitment to developing new formulations.

 

[dmr]

I always thought it was kind of funny - many people 'in the know' used to run Kodak down at every turn (sometimes with very legitimate criticism, true) and "Yellow Box" was a bit of a perjorative.

Kodak seems to represent the archetype of the faceless Evil Corporation<tm> much like Ma Bell ("We don't have to care, we're the phone company."), any of the oil companies, Untied Airlines, and yes, Microsoft.

Granted, when we take a trip to the real world, their primary sin is that of success, but with that success comes envy and suspicion -- and history has shown that not all of that suspicion is groundless.

Now that this Evil Corporation<tm> is circling the drain, the top management, those who are usually at the end of the line for layoffs and salary cuts, are beginning to get nervous. They believe that action -- any action -- is better than no action, so we have the proverbial Fiasco Du Jour and the membership in the Magic Bullet of the Month Club to try to chance a turnaround, focusing, of course, on the short term.

I do wonder why, whenever I like a film of theirs, they do one of three things:

1. Discontinue it.
2. Rename it.
3. Mark it for export only.

I think some product withdrawals, such as Kodachrome which I hate to see go, are driven by demand, mainly lack of it. Others, I don't know, but I have an intuitive feeling that many are just the result of management by whim.

(over)

 

[Kevin]

Bill, you seem to forget the motion picture industry, which is not going to suddenly switch to digital capture for their $50,000,000 productions. They will still shoot the raw footage on film.

Why?

Because film has a certain look. Moreover, it is exposed by billions of light photons hitting the emulsion simultaneously. This is quantum multitasking. 24/25 Frames per second, second after second, minute after minute.

Digital motion picture cameras which have the same resolution as film and can buffer like film are a long way off. Or is 20th Century Fox now shooting all of its blockbusters with video cameras?

Recently a film student gave me a couple of long rolls of this Kodak film to try out.

Anyone can buy this motion picture film and spool it onto their own bulk loader.

Keep all of your used commercial film cartridges from now on and respool those when you want to travel through an airport.

Easy-peasy. What's with all this pessimism folks ??

 

[johnny9fingers]

I for one don't want to lose Kodak film. I recently returned to film after a brief and torrid affair with digital. Once the instant gratification wore off, the need for quality took hold. Film is history, film is magic, and I will buy as much Kodak film as I can so they will see someone out there still wants and needs film.
9fingers

 

[f/stopblues]

Bill, you seem to forget the motion picture industry, which is not going to suddenly switch to digital capture for their $50,000,000 productions. They will still shoot the raw footage on film.

Why?

Because film has a certain look. Moreover, it is exposed by billions of light photons hitting the emulsion simultaneously. This is quantum multitasking. 24/25 Frames per second, second after second, minute after minute.

Digital motion picture cameras which have the same resolution as film and can buffer like film are a long way off. Or is 20th Century Fox now shooting all of its blockbusters with video cameras?

Recently a film student gave me a couple of long rolls of this Kodak film to try out.

Anyone can buy this motion picture film and spool it onto their own bulk loader.

Keep all of your used commercial film cartridges from now on and respool those when you want to travel through an airport.

Easy-peasy. What's with all this pessimism folks ??

That's very true about motion picture film. A 35mm film running two hours will use 10,800 feet of film just for the final cut. Take into account that an average Hollywood film has a shooting ratio of anywhere between 25 to 35:1. That means for every minute of film actually in the final movie, there's 25-35 minutes actually shot. It varies of course.. small films might shoot 10:1 if they're well planned. So basically, a Hollywood movie can use around 378,000 feet of film to arrive at their final product. I wouldn't want to edit that mess!

However, cinema film is largely color and always positive instead of negative.

 

[dmr]

Recently a film student gave me a couple of long rolls of this Kodak film to try out.

Anyone can buy this motion picture film and spool it onto their own bulk loader.

Where would you get this processed?

Would this be C41 compatible?

Could you reversal process it like Ektachrome?

 

[f/stopblues]

I haven't actually handled it, but isn't motion picture film only sprocketed on one side? I'm not sure its the same sprocket size either. I could be (and often are!) wrong..

 

[phototone]

That's very true about motion picture film. A 35mm film running two hours will use 10,800 feet of film just for the final cut. Take into account that an average Hollywood film has a shooting ratio of anywhere between 25 to 35:1. That means for every minute of film actually in the final movie, there's 25-35 minutes actually shot. It varies of course.. small films might shoot 10:1 if they're well planned. So basically, a Hollywood movie can use around 378,000 feet of film to arrive at their final product. I wouldn't want to edit that mess!

However, cinema film is largely color and always positive instead of negative.

And when you consider that from 1000 to 2000 prints are made from that "final cut" so the film can be released everywhere at once, that is quite a bit of film stock on just one film, and there are 100 or more feature films released per year.

 

[phototone]

I also want to add, for thought pondering. The same coating lines that manufacture motion picture film "could" be used for an occaisional coating of b/w film. Kodak, or any other film manufacturer doesn't coat any type of film continuously. They make a run and store it and then spool it as needed to replenish their inventory.

Sad news about Agfa, which also made a ton of motion picture film. This should strengthen the market for the remaining film manufacturers.

 

[Kevin]

Where would you get this processed?

Would this be C41 compatible?

Could you reversal process it like Ektachrome?

Well, processing for this film is ECN-2. Pnet has a thread on this as well, if that helps any.

 

[bmattock]

All you have all said about motion pictures is true. Except that to preserve the 'film look', all you have to do is shoot in film and then transfer to digital, which is commonly done. You won't be able to tell the difference. So no hundreds of thousands of feet of dupe film to distribute. But yes, many theatres have failed to convert to digital, so they currently DO have to do a lot of film duping.

However, you fail to take into account the magnitudes involved.

No matter how much film the movie industry uses producing and distributing real film, it is nothing compared to annual international consumer sales of Kodak Gold 200 in its heyday (for example). The power of the low-level consumer really moves mountains.

We're 'enthusiasts' - we don't count for much, really! What you and I and everybody else on Pnet / RFF / etc buy and don't buy - a flyspeck.

The movie industry is important to the film manufacturing industry, but not that important. When Kodak chooses to shut down their line, that's it. The movie industry has been warning movie houses for years to convert to digital or risk not getting the latest greatest movies.

Kodak is still producing cine film - in fact, they just announced a new emulsion for the movie industry last week, Kodak Vision 2 50D. Problem is, cine film is not produced in the same manner as photographic still film, and it is truly not that suitable. And why not? All kinds of reasons. Slow emulsions, less forgiving of setting white point, ECN-2 processing not generally available for consumers, spectral sensitivity, grain, and so on. All the things that make a cine film great would tend to make it a lousy choice for still film. Not that it could not be used - just that you'd have to be pretty hard up to want to use it more than once.

I agree that alternatives should be explored - new workarounds tried - and as film finally dries up and become unavailable, we'll probably try any/all of these.

But:

Bill, you seem to forget the motion picture industry, which is not going to suddenly switch to digital capture for their $50,000,000 productions. They will still shoot the raw footage on film.

No, I didn't forget. It just isn't as big a determiner as you may think it is. Kodak cares, of course - this is a money maker for them currently. But when the economics support dumping it, they will. The movie studios are well aware of that. Only the mom/pop movie theaters seem not to have gotten the word. Will it be expensive to convert? Yep. That has nothing to do with it, sadly.

Best Regards,

Bill Mattocks

 

[kbg32]

The movie industry does not thrive on theater showings of their work. What moves the industry is sales of movies via DVDs or video. Theater showings of films amount to bupkis. DVD - video sales run the movie industry.

 

[Trius]

The use of disposable cameras (with FILM) is not declining worldwide. In fact, I believe it is actually growing. As long as the disposable camera market is viable, then there HAS to be film made.

I have seen single use digital cameras in drug stores. Don't count on that market growing for long.

The shift to digital film "prints" is on, and will quickly gain steam. That will also cut out the need for prints for immediate release DVDs and TV broadcast.

I have vacillated many times on whether to "support" Kodak by buying Trix, HC-110, etc., being part of the consumer base that keeps Kodak supporting film for as long as possible. What really bothers me is that the new CEO has not even had the grace to say "We value our film customers, who have made us what we are, and we will do everything we can for as long as possible to support you." No, he has publically stated that they will not invest one more dime in film. That changed my position. Except for Kodachrome, dammit.

Trius

 

[ywenz]

Seriously.. who cares!? if they make the film that you need to use, then buy it, otherwise, don't buy it. Don't take it so personally...

 

[RJBender]

More on Eastman Kodak's finances from the SEC:
http://www.sec.gov/Archives/edgar/data/31235/000115752305008903/a4998627ex99_2.txt
http://www.sec.gov/Archives/edgar/data/31235/000115752305008903/a4998627ex99_1.txt

R.J.

 

[bmattock]

More on Eastman Kodak's finances from the SEC:
http://www.sec.gov/Archives/edgar/data/31235/000115752305008903/a4998627ex99_2.txt
http://www.sec.gov/Archives/edgar/data/31235/000115752305008903/a4998627ex99_1.txt

R.J.

Thank you, I agree. I use Edgar quite often, but had not yet dug into their balance sheet. The tale of the ticker is hard to ignore:

U.S. consumer film industry sell-through volumes decreased
approximately 27% in the third 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 remains
a decline in the range of 23% to 27% for full year 2005.

There was also a statement in there regarding the drop in sales of cine film to movie studios, but they hope Hollywood won't make quite so many stinkers this Christmas.

I repeat - if Kodak had ignored digital and stayed in film, they'd be bankrupt today. Their cash reserves are not that big to absorb those kind of losses quarter on quarter.

Folks - digital camera sales are PAYING Kodak to keep churning out film for now - at a loss to Kodak. I repeat my prediction - they will exit the market when they can shut down their processing plants and avoid massive cleanup penalties. All political.

Best Regards,

Bill Mattocks

 

[RJBender]

Back in the mid 1990s, Kodak introduced their Picture Maker kiosks at KMart and other retailers. Basically, the use of the machines was unsupervised and clerks at the stores weren't checking to see if customers were making copies of copyrighted images. A lot of photographers quit releasing proofs to their customers because their orders for enlargements were plummeting. Many saw this as a direct result of the unsupervised kiosks. Kodak later changed the machines so a watermark would appear on the print if the machine was used to scan a print made on Kodak professional grade paper.

I remember a lot of photographers were mad at Kodak for their decision to put those kiosks in KMart.

R.J.

 

[dmr]

What really bothers me is that the new CEO has not even had the grace to say "We value our film customers, who have made us what we are, and we will do everything we can for as long as possible to support you." No, he has publically stated that they will not invest one more dime in film. That changed my position.

The proverbial Big Evil Faceless Corporation<tm> will only support their customers when it is in their short-term interest to do so. If we film customers could save the numbers for a quarter for them, they would support us -- in the short term. 🙁

Except for Kodachrome, dammit.

Unfortunately that will be one of the first to go, but ironically I understand their position on it.

 

[Socke]

What really bothers me is that the new CEO has not even had the grace to say "We value our film customers, who have made us what we are, and we will do everything we can for as long as possible to support you." No, he has publically stated that they will not invest one more dime in film.

Trius

The correct statement would read " We value our film customers, who have made us what we are, and will do everything we can for as long as <i>we find investors giving us enough money</i> to support you."

But with that statement shares would plummet making Kodak an easy target for a hostile takeover.