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Kodak Failing, But Camera Phones Not To Blame 309

Posted by timothy
from the all-the-world's-a-sunny-day dept.
An anonymous reader writes with this snippet from The Conversation: "According to the Wall Street Journal, camera manufacturer Kodak is preparing to file for Chapter 11 bankruptcy, following a long struggle to maintain any sort of viable business. The announcement has prompted some commentators to claim that Kodak's near-demise has been brought on by: a failure to innovate, or a failure to anticipate the shift from analogue to digital cameras, or a failure to compete with the rise of cameras in mobile phones. Actually, none of these claims are true. Where Kodak did fail is in not understanding what people take photographs for, and what they do with photos once they have taken them." Continues the reader: "Looking at camera data from Flickr, of images uploaded in 2011, camera phones only make up 3% of the total. Dedicated cameras from Canon, Nikon and yes, Kodak were used to take 97% of the images. What Kodak failed to understand is that people have switched from taking photos for remembering and commemorative reasons to using photos for identity and communication. The shift changes the emphasis away from print to social media platforms and dedicated apps."
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Kodak Failing, But Camera Phones Not To Blame

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  • bad data source (Score:5, Insightful)

    by Lehk228 (705449) on Monday January 09, 2012 @01:15AM (#38634888) Journal
    flickr is a horrible source to do a study like this, it is going to bias towards 'real' cameras because it's more of a photography sharing site then it is a "drunken pics at the bar last night" site. mobile phones can upload photos straight to facebook and twitter
  • by Anonymous Coward on Monday January 09, 2012 @01:22AM (#38634914)

    Let's pretend the data is accurate and reliable. Kodak's core problem would remain the same: if you're business model is built on selling photographic film and paper, and people don't need that anymore, the company is going to fail.

  • by Majik Sheff (930627) on Monday January 09, 2012 @01:24AM (#38634924) Journal

    Up to and including... management. You can only fire your way into a positive quarterly report so many times before you run out of peons to pee on.

  • by gzipped_tar (1151931) on Monday January 09, 2012 @01:25AM (#38634930) Journal

    It first tried to rebuke the claims of Kodak being not able to innovate, etc, and then discussed "how people today use photos" in the examples of Flickr, Facebook, and such. It concluded with the weak argument of essentially one sentence, that "[It] is hard to see a role for Kodak in all of this." The problem with this reasoning is that exactly the same thing can be said about many of Kodak's competitors. I'm not aware whether Nikon or Canon is doing significantly better in this regard, which is to ease the "sharing and distribution" of photos through the Internet and social networking.

  • by robla (4860) on Monday January 09, 2012 @01:31AM (#38634948) Homepage Journal

    Even though Kodak saw digital photography coming, the problem was Kodak's whole financial structure was tied to film, and digital technology was disruptive technology [wikipedia.org]. They might have been able to sustain the brand by merging with or buying the right company at the right time (e.g. Canon), but most companies have a hard time dealing with technology shifts that vaporize their main profit center. It's not as simple as just knowing what the next trend is; it's figuring out how to gracefully wind down the existing cash cow while giving the new technology the management attention and resources it needs to thrive. Even then, there still ends up being a lot of pain because you can just put all of the same people you had producing film to work in a digital camera business.

  • by Isaac-1 (233099) on Monday January 09, 2012 @01:32AM (#38634964)

    Kodak's decline goes back 30 years or more, I personally think it began with their ill fated Kodamatic (Polaroid clone) and having to pull it from the market after loosing a major patent infringement case to Polaroid. Since then it has been one bad move after another, does anyone remember the much hypes Kodak disc camera? The only good thing they had going was their high end multi thousand dollar CCD imager division which they completely failed to convert to market dominance in the consumer digital camera revolution. Sure their were also many background failures like not keeping up with Fuji and others in the 1-hour photo market in an attempt to maintain their major mail out photo lab processing centers, etc.

  • Article lost me... (Score:5, Insightful)

    by Lordfly (590616) on Monday January 09, 2012 @01:35AM (#38634986) Homepage Journal

    at this: "It would be interesting to repeat this analysis using Facebook data, but there is no reason to believe the results would be substantially different."

    Yes, because the millions of smartphones out there with a camera and a Facebook app (as opposed to a flickr app) aren't going to skew the results at all.

    Flickr is for people who like photography; ergo, the data is going to be skewed heavily towards actual cameras.

    Facebook is for people sharing themselves with their friends and the world. One only has to peruse a random person's Facebook profile picture page to find hundreds of self-snaps taken in the bathroom, or at the pub, or on a train, or whatever.

    Kodak, in my opinion, failed because they neglected to make quality products in their particular niche (easy to use, inexpensive, easy to share). They offshored their production, so Kodak cameras were notoriously hit-or-miss in regards to actually working right. They missed the highend market (then again Kodak was never known for that anyway), letting Sony, Pentax, Canon, and Nikon beat them there. They failed to leverage their gigantic photo paper experience into anything worthwhile (I own a Kodak printer that, as I type this, refuses to print due to some bizarre error I don't have time to diagnose).

    In short, Kodak failed because Kodak fucked up. Photography isn't going anywhere. Hell, film photography isn't going anywhere. Kodak just stood still and let the world pass them by.

    They took our Kodachrome away, and nobody cared.

  • by hedwards (940851) on Monday January 09, 2012 @01:41AM (#38635004)

    Yeah, but I don't have much hope for them. They fought digital tooth and nail up until relatively recently. Do you happen to remember that film camera that they were trying to market a decade or so ago which showed a preview on an LCD on the back of the camera of what was on the film? It would have been both revolutionary and useful had they come up with it a decade or two earlier, but as it was it wasn't really useful and I think it failed pretty much immediately.

    The painful thing for Kodak is that they had all sorts of useful patents and innovations related to digital photography they just haven't been able to figure out how to make use of them. At this point I think the horses are out of the bag and just spilled the milk.

  • Doubtful (Score:2, Insightful)

    by Anonymous Coward on Monday January 09, 2012 @01:42AM (#38635010)

    As someone who knows a bit about digital photography I do believe it has everything to do with Kodak's camera product lineup. Kodak made no serious effort in high end photography, and being a typical American company they bungled what they did do, then gave up. They wanted to keep on producing cheap cameras like they had always done. But this was disrupted by two factors; along came cameraphones and knocked the low end down, and the march of technology have made the low end camera so cheap that there are no margins in them. Additionally, for a brand to have the prestige to sell a low end product, it must have a high end and upper mid-end product; Canon has dSLRs, Kodak had film... but now it doesn't.

    The only way to make real money out of digital cameras is to produce high end cameras. By the time Kodak would've realised that they would have both lost the money and talent to get back into that game like Fujifilm has.

  • Kodak Easy Share (Score:4, Insightful)

    by Danzigism (881294) on Monday January 09, 2012 @02:08AM (#38635144)
    was the biggest piece of crap ever made. After working with tons of residential customers who need their computers cleaned up and ask for an explanation as to what caused their machine to take so long to boot, Kodak Easy Share was the culprit in many cases. I know they're simply trying to make it easy for old people to just plug in their camera to the computer and magically have all their photos transferred to the All Users\My Pictures folder (which is stupid btw), but the software is just pure autorun garbage and why on earth it needed to execute during start up, I have no idea. Regardless of the quality of the cameras, having any negative response on your product cannot be a good thing. I don't think it's the main reason Kodak is filing bankruptcy obviously, but I do think it may have contributed to Kodak's negative consumer image.
  • Re:bad data source (Score:5, Insightful)

    by Cimexus (1355033) on Monday January 09, 2012 @02:21AM (#38635190)

    Very true, but I suspect Flickr was chosen because:

    - Most Facebook users set privacy preferences up such that only friends can see their photos. Flickr on the other hand, being a 'photography sharing site' rather than something for personal images (as you rightly say), has mostly 'public' photos, accessible without even needing a Flickr account, that can be easily crawled and analysed. (You can make photos visible only to other Flickr friends, but by and large, people don't do this, as they aren't using it for private photos).

    - Camera model is derived from EXIF data in image. Facebook uploading software (or maybe Facebook itself) generally strips out EXIF information from images. So despite the fact that Facebook offers many more images than Flickr, it is useless in any study of how much particular makes/models of camera are used. (Again, you can hide/strip EXIF data on Flickr as well, but a smaller proportion of people do this than you might think, and at least it's an option, unlike on FB where it's stripped no matter what)

  • Re:bad data source (Score:5, Insightful)

    by osu-neko (2604) on Monday January 09, 2012 @02:43AM (#38635284)

    flickr is a horrible source to do a study like this, it is going to bias towards 'real' cameras because it's more of a photography sharing site then it is a "drunken pics at the bar last night" site.

    For the purposes of the point being made, that's precisely why flickr is the perfect site. Kodak's market never was the "drunken pics at the bar" market. Losing a market you never had to begin with has no impact on your bottom line.

  • by oztiks (921504) on Monday January 09, 2012 @02:44AM (#38635286)

    Kodak going broke?? No kidding!

    I guess that's what happens when you refuse to change your horseshoe factories into tyre making factories after people invent cars.

  • by osu-neko (2604) on Monday January 09, 2012 @03:06AM (#38635336)

    ...if you're business model is built on selling photographic film and paper, and people don't need that anymore, and you don't change in any way, the company is going to fail.

    ftfy

    Many companies survive the complete evaporation of their original business model just fine. Did you know Berkshire Hathaway was originally a textile company?

    Any company with the resources Kodak once had can survive any possible change in their market, regardless of their business model, as long as they aren't afraid to change. Companies fail when they're run by incompetent management, period.

  • Re:bad data source (Score:4, Insightful)

    by Sir_Sri (199544) on Monday January 09, 2012 @03:38AM (#38635398)

    and just because the last 3 or 4 years of Flickr has been populated with cameras but not camera phones doesn't mean the next 5 years will be.

    I went on a business trip, with 2 days due to scheduling incompetence on our end that ended up as free time, + 1 extra day due to business issues. All I took was my Galaxy SII. It took some great photos (or at least, the camera worked, my own incompetence not withstanding). And it took a few videos that probably could have been better. It got the job done. I'm sure I could have carried another device, which would have been one more thing to risk losing, or breaking. My phone I needed anyway.

    But If I did that 3 years ago, I would have still taken a camera, a digital camera, but a camera.

    A cell phone will never replace a full blown camera completely, but at some point it becomes 'good enough' that you don't need all of the other stuff that makes it a camera, and it just runs as software on the portable computer, and the Camera becomes a specialized device. Kodak was the wrong company for dealing with that change. They were a chemicals company (Eastman is still a chemicals company), CCD's are semiconductor industry devices. Kodak would have been in serious trouble trying to get into that mass market without buying a semiconductor outfit, or merging with one. Everyone who is in the digital camera censor business is in it because they have a chip background. I cannot seriously envision a situation that could have lasted where Sony or Samsung would have continued to make cameras for Kodak but not on their own, which essentially what has happened with the cell phone (and camera's in cell phones business, between them and Apple, even Sony, who is still selling them cameras are publicly pondering why they are that stupid). Kodak got into the game late, and they've never been able to do anything but try and catch the leaders, and in the end you get left behind. All of the big camera makers are moving into other areas of electronics and Kodak doesn't have the skills or the resources to follow. While Sony and Samsung are integrating their camera technology into cell phone Kodak is trying to not go bankrupt.

    They could have avoided this, if they'd jumped on CCD cameras as the future of the business in oh... 1996. They didn't. It has nothing to do with social, or the types of devices people want. Kodak is a chemicals company in a semiconductor business, and they didn't realize it until it was too late, and the semiconductor companies didn't need them anymore.

  • Wrong conclusion. (Score:4, Insightful)

    by yeOldeSkeptic (547343) on Monday January 09, 2012 @05:47AM (#38635824)

    If the reason Kodak failed is because they failed to see the shift in attitude towards photographs, then why is it that traditional camera makers like Canon and Nikon are alive and well?

    I think the writer failed to see the obvious here. The reason Kodak failed is because Kodak is primarily a film and photo chemicals maker and not primarily a camera maker. With less people using film it is obvious Kodak can't base its business model on an obsolescent technology. Nikon and Canon are primarily camera makers and they were able to make the shift to digital successfully. Kodak was not.

    Kodak's error was that it decided to hold onto a flawed business model rather than just closing down the company and returning the assets to the stockholders. Some companies are destined to close down. It's just the way it is.

  • Re:bad data source (Score:4, Insightful)

    by DarkOx (621550) on Monday January 09, 2012 @06:40AM (#38636000) Journal

    No it's a good data source for that very reason. The people using those 'real' cameras are most likely the market segment that have been Kodak's traditional customers. We want to know have they have changed and what they do now. The photo market itself has grown and it may well be that Kodak has lost total share by not capturing the new market segments like mobile phone snap shots but that is a different question.

  • by silentcoder (1241496) on Monday January 09, 2012 @06:45AM (#38636016) Homepage

    >That said, Kodak also was instrumental in developing the digital camera, invented the *.psd image format

    This is partly right, but not as simple. The censor at the heart of all digital cameras was invented by a Kodak employee - at a time when Kodak was among the largest patent holders in the world. The executives he showed his design to told him "Forget it, we make film not computer stuff".
    The result is very much photography's own version of the XEROX-PARC/APPLE saga - as Kodak didn't see the value of what their employee had built, failed to patent it and saw his design being given to all the competition.

    Thus came the digital camera revolution - one reason why it had so many competitors so early on was that nobody owned a patent on the censor until it was too late to get one - mostly because the company where it was invented hadn't thought it worth the bother of applying for.

    Even if your cynical you could say that if Kodak had foreseen a possible threat from digital they could have patented the censor simply to prevent digital cameras from being made at all.

  • by Lumpy (12016) on Monday January 09, 2012 @07:26AM (#38636158) Homepage

    Kodak INVENTED the digital camera and was the only company selling them for the first year. It's the idiot CEO that was in place at that time that let them produce craptastic cameras instead of partnering with a camera maker.

    It is their own fault. Over the history of the digital camera, the crappiest digital cameras were all kodak. WTF were they thinking? They never tried to pioneer the digital film back, that could have made them a ton of money. etc...

    Kodak is dead because their leadership was stupid. They chased the maximum profits per quarter instead of chasing what would continue the company in the seachange they created themselves.

  • by Lumpy (12016) on Monday January 09, 2012 @07:36AM (#38636198) Homepage

    "The only problem I see, other companies made cheaper digital cameras. "

    they made cheaper digitals that were a LOT better.

    I owned the first Canon Digital camera model, it was 35% cheaper than the equilivant from Kodak and took 800X better photographs because it had decent glass. Kodaks' offerings were using plastic lenses with the :fuzzy: effect in every shot. Even at the low resolutions of 1.2megapixel you could see the lenses on kodak cameras were garbage.

    Kodak lost because they offered garbage products.

  • by clodney (778910) on Monday January 09, 2012 @10:59AM (#38637292)

    Many companies survive the complete evaporation of their original business model just fine. Did you know Berkshire Hathaway was originally a textile company?

    Any company with the resources Kodak once had can survive any possible change in their market, regardless of their business model, as long as they aren't afraid to change. Companies fail when they're run by incompetent management, period.

    If only it were that simple. The big problem is deciding what to change into. A company in a declining market may have a very profitable, cash cow business. They can use that money to fund the search for a new business model. But a company with a huge investment/infrastructure/employee base in business X may not even recognize an opportunity in business Y, and even with the cash available, may not be a competent competitor in business Y even if they decide to pursue it.

    Should Kodak have gone into search engines in competition with Google? Or closer to home, given their association with the movies, maybe create a special effects studio? Or maybe create software to edit images like Photoshop? Is there any reason to think that they would have succeeded at any of those ventures?

    Having cash and recognition that your business is declining is not enough. The real rub is finding something else that you can succeed at. And I don't think there is any obvious way to go about that.

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