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A Tale of Two Companies 70

Posted by Unknown Lamer
from the dying-breed dept.
Rick Zeman writes "They've had the best of times, and now they're living through the worst of times. The Washington Post talks about the dissolution of both Kodak's and Polaroid's business models, what Kodak can learn from Polaroid's earlier mistakes, and the resurrection of some classic Polaroid tech by private entrepreneurs."
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A Tale of Two Companies

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  • Or Tumblr (Score:5, Funny)

    by Impy the Impiuos Imp (442658) on Sunday December 02, 2012 @01:10PM (#42161731) Journal

    Can someone instagram some photos of hese old cameras and a "gold box" of film so I can see what the hell they're talking about?

  • Poor management (Score:4, Interesting)

    by graphius (907855) on Sunday December 02, 2012 @01:15PM (#42161765) Homepage

    Polaroid was always a bit of a niche company. They happened to be in a fairly big niche, but they were very unique in what they did. Their monopoly kept them going until the market changed.

    Kodak was killed by shortsighted managers who could not understand the implications when they invented digital photography.

    [car analogy] Both companies were buggy whip producers. Kodak invented the internal combustion engine, but never thought it would catch on.[/car analogy]

    • Re:Poor management (Score:5, Interesting)

      by fuzzyfuzzyfungus (1223518) on Sunday December 02, 2012 @01:25PM (#42161841) Journal

      Polaroid was always a bit of a niche company. They happened to be in a fairly big niche, but they were very unique in what they did. Their monopoly kept them going until the market changed.

      Kodak was killed by shortsighted managers who could not understand the implications when they invented digital photography.

      [car analogy] Both companies were buggy whip producers. Kodak invented the internal combustion engine, but never thought it would catch on.[/car analogy]

      The 'buggy whip' analogy isn't quite fair to Kodak. The techniques required to produce their particular buggy whips involved a fair amount of chemical expertise. That spun off as Eastman Chemical [eastman.com] in 1994. They may or may not be setting the world on fire; but nobody is preparing their funeral. This doesn't change the fact that Kodak is still totally fucked, or that they managed to almost entirely fail to capture the future that they invented; but if we had to horribly overload the buggy-whip analogy, it'd be fair to say that Kodak is still trying to sell buggy whips to the consumer transport market, while the market has moved on to BDSM fetishists and the production of diversified specialty leather goods.

      • by graphius (907855)

        Yes the analogy was a bit harsh, yours is definitely more..... picturesque. but no, I don't really have a lot of hope for Kodak now. The vultures are circling.

        Polaroid is now just a name on third party junk. I do hope Kodak doesn't suffer the same fate...

      • Re:Poor management (Score:5, Informative)

        by mbkennel (97636) on Sunday December 02, 2012 @02:03PM (#42162035)

        Somewhat true. Why did Fujifilm survive? Because they correctly saw themselves as an industrial coatings company, and not a photography company.
        Kodak also had great experience in *optics* (they may have made optics for some generations of surveillance satellites, very high-tech and expensive)---optics are necessary for photography but it isn't the same area exactly.

        They had great expertise in two critical industrial areas, but the managers were apparently stuck on consumer photography, and did not appreciate how inexpert they were in semiconductors and consumer electronics.

        • Kodak still has a large medical imaging business. However, they have lots of competition and it's a fairly niche industry at that. Their stuff is OK, but nothing terribly special.

          They do run Linux, if that's any consolation.

          • Kodak also had a brief foray into the field of dental office management software (I had to support an office using their software a while back). The whole medical branch of the company was spun off a while ago into Carestream Health.
      • by ColdWetDog (752185) on Sunday December 02, 2012 @02:51PM (#42162339) Homepage

        I initially read that as "BSD fetishists" and got a bit confused. BSD isn't all that hard to use these days.

    • Re:Poor management (Score:4, Interesting)

      by fermion (181285) on Sunday December 02, 2012 @03:19PM (#42162487) Homepage Journal
      There was little Kodak or Polaroid could do. Technology just made the mass market of what they where selling irrelevant. Expensive instant photography is meaningless with camera phones and instant [s][t]exting. Kodaks mass product, easy snaps that produce high quality are not going to compete when software can create superior images with inferior hardware and no consumables.

      This was not competing with free or irrelevance due to a a change in power source. This was a complete hange in relationship to a product. Even if cameras were still not in phones, and cost $200, Kodak would still be toast. It is not economical to buy film and pay for prints that last a life time when one can print the stuff you want on demand for an equal cost, if you want.

      The reason Kodak and Polaroid failed is the reason that firms should fail. They get too big and sales can't support the inefficiencies. The products are still in demand, ,just not at the same volumes. If we would allow and encourage such companies to fail, things might be much better.

      • Re:Poor management (Score:5, Informative)

        by Attila Dimedici (1036002) on Sunday December 02, 2012 @03:27PM (#42162529)

        There was little Kodak or Polaroid could do.

        This is certainly true of Polaroid, but Kodak, for all intents and purposes, invented digital photography and still failed to capitalize on the technology that made their primary product obsolete.

        • Re:Poor management (Score:4, Insightful)

          by symbolset (646467) * on Sunday December 02, 2012 @04:57PM (#42163093) Journal
          I'm sure the argument was that if they promoted the new technology it would "cannibalize" their traditional revenue base. There is a lesson here.
          • As an example of successful transition among products, we can point out to the iPod Mini that was replaced by the iPod Nano even when it was the best selling product from Apple, and then the iPod line replaced by the iPhone. I like the old Polaroid camera, it was really fun to use when going out with my friends, but for 100% casual shoots the digital cameras win.

          • They were pioneers in shitty plastic lenses and selling less film for more money. And obsolescence - Instamatic, Pocket Instamatic, Disc etc.
        • by fermion (181285)
          Kodak was the first to use a CCD to capture an image. They were not the first to manufacture a digital camera, and they were certainly not the one's who created the software to make a quality image using relatively low quality optics, as the did with film cameras.

          And where is the profit in manufacturing cheap cameras? Kodak had to limit personal CEO jet travel to 100k a year [reuters.com]. These are the things that one is talking about when keeping a company like Kodak afloat. It was a big old style US corporation.

          • by khallow (566160)

            When I say there is nothing Kodak could have done, I don't mean they could not have come out a with a product. What I mean is the model was based on selling consumables at a huge profit, then pissing that profit away. There was no way for them to make those profits on the cheap cameras they sold. They have not, for a long time,like Nikon or Canon with a tradition or selling $10,000 cameras. Kodaks innovation was the Advantix.

            In other words, there was plenty that Kodak could have done to survive and even expand its business. But not while preserving a broken business model that never really worked well.

          • by fatphil (181876)
            > Kodak was the first to use a CCD to capture an image.

            One has to ask what Fairchild (and others) were creating the sensors - two dimensional detectors of visible light - for, if not for capturing images.
      • "There was little Kodak or Polaroid could do. Technology just made the mass market of what they where selling irrelevant."

        I think that the discussion above implies that Kodak especially, was selling the wrong things. They forgot their technology, and got caught up in the bling that the technology was capable of producing. Research, engineering, and the advancement of technology will always sell. Bling resulting from all of that is ephemeral.

        Polaroid? You may well be right about them. I'm not aware of

    • by Teun (17872)
      Strange enough the first digital camera I used around 1994 was the Kodak DC-10.
      The 333,000 pixels pictures could in my view easily compete with Polaroids.
      I remember they (Kodak) made the first camera to match the resolution of a typical 35mm picture and it was an incredible 16 Mega pixel!
      Now I have a 36 MP camera (Nikon D800) using that same 35mm frame :)
      Later Kodak sold re-branded Minolta digital camera's, they probably had Kodak IP in them but the brand eventually went to Sony, Kodak lost their chance
    • Their monopoly

      According to wikipedia they lost their monoploy on instant photography in the USA in the mid 1990s as their patents expired and with them their ability to restrict where instax was sold.

      dunno how much impact that had in the grand scheme of things though.

      • by graphius (907855)

        I am not sure of the dates, but until that time Polaroid did have a monopoly. In fact they sued Kodak and won based on their patents on instant photography.
        I know because my dad won a Kodak instant camera which was subsequently recalled.

        By the mid '90's the writing was already on the wall for analogue film. A lot of people, myself included, predicted that film would not last. The change did come quite a bit faster than I thought it would though...

  • Wrong Example (Score:3, Interesting)

    by samuisan (142967) on Sunday December 02, 2012 @01:21PM (#42161809)

    The article is wrong, both companies were doomed by hopelessly incompetant managers who either failed to see the coming end of film, or else saw it but failed to act (exercise for the student to decide which is worse.)

    It didn't have to be like this, look at Fuji to see how a company could switch its main product and survive.

    Pity, so many people lost jobs because of a few retarded managers at the top of their companies.

    • Re:Wrong Example (Score:5, Insightful)

      by geoskd (321194) on Sunday December 02, 2012 @01:31PM (#42161869)

      Pity, so many people lost jobs because of a few retarded managers at the top of their companies.

      There are two classes of people at Polaroid and Kodak who got the axe. The first are the technicians, engineers and related staff. Those people were going to lose their jobs regardless, as the products they made were no longer wanted. The other class of people at Kodak and Polaroid were the managers, supervisors and non-technical staff. Those people can get jobs elsewhere (and most of them have). Very few people lost their jobs who wouldn't have been let go when these companies transitioned to new technologies, except managers, who can hardly be said to be innocent victims.

      -=Geoskd

    • by sjames (1099)

      What doomed them is that they couldn't shake the 'industrial giant' mentality. As TFA points out, there;'s millions a year in business available out there in supplying artistic photography. Some of those markets are actually growing. However, they'll never support a company the size of Kodak in it's heyday. Combine that with other markets they still have and they could make a go of it for some time.

      At one time, they had the opportunity to bring in the expertise needed to do consumer digital cameras. They ma

  • Incidentally... (Score:5, Interesting)

    by fuzzyfuzzyfungus (1223518) on Sunday December 02, 2012 @01:37PM (#42161909) Journal

    Given how frequently(and often painfully, toward the end) companies seem to founder in the face of structural changes that they can't do much about(short of essentially re-founding as something else, just carrying over the campus and the capital), I have to wonder if there has been any work done outside of the barbaric corporate raider sector on building companies with clean exit strategies...

    After all, there isn't any reason why a company needs to struggle to perpetuate its existence forever(any more than a company would struggle to perpetuate the existence of a given product line forever). Sure, the process that companies who do fight and then die go through is pretty grim; but that is, at least in part, because they keep struggling even after the situation is hopeless, and just bleed and bleed and bleed.

    Is there a process where you just quit before you are behind, wind down neatly, rather than the corporate equivalent of spending a few years stuck full of tubes and unresponsive in the ICU?

    • by GNious (953874)

      Am thinking there must be a funny comment around here refering to the above, Sony and corporate suicide.

    • by cbeaudry (706335)

      I think the problem would be, once shareholders start realising the corporation is winding down, they would start dumping the stock.

      • by sjames (1099)

        Why is that a problem?

        • by cbeaudry (706335)

          Its a problem to the wind down neatly strategy.

          • by sjames (1099)

            **WHY** is that a problem?

            • by cbeaudry (706335)

              Because the stock would be worthless faster than they can wind down operations.

              • by sjames (1099)

                And......what? They won't be taking out any loans against it anyway.

              • by khallow (566160)
                I agree with sjames. Everyone already knows the stock price is going to zero. And as long as the business hasn't completely divested of everything (or permanently obtained more liabilities than it has assets), there will continue to be future income and hence, reason to value the stock at a small positive value.
    • by mounthood (993037)

      After all, there isn't any reason why a company needs to struggle to perpetuate its existence forever...

      Almost all market value is derived from future earnings; it's the potential that drives stock price.

      Is there a process where you just quit before you are behind, wind down neatly, rather than the corporate equivalent of spending a few years stuck full of tubes and unresponsive in the ICU?

      Yes and they're quite common. Companies call them 'projects'.

    • Re:Incidentally... (Score:4, Insightful)

      by gopla (597381) on Sunday December 02, 2012 @02:38PM (#42162255)

      After all, there isn't any reason why a company needs to struggle to perpetuate its existence forever(any more than a company would struggle to perpetuate the existence of a given product line forever).

      That would be equivalent to euthanasia for companies. But there are real reason why it is not universally accepted. For all companies that have died there are enough examples that have struggeld and come out stronger. Nokia and Apple comes to mind immediatly. They diversified and successed beyond immagination.

      The message is: don't quit too easily.

      • This phenomenon gets coupled with human nature. For every Nokia or Apple who struggled and successfully reinvented themselves, there are thousands, if not tens of thousands, who struggled and died. So while the odds of a successful reinvention are maybe not as bad as a lottery, they're still pretty bad, and humans are both optimistic and extremely bad at gut-level statistics. This is why lotteries continue to exist, and why companies don't go gently into that good night.

      • by mug funky (910186)

        but apple and nokia were both on the better side of a disruptive technology. kodak and polaroid are very much on the wrong side of one.

        the only thing i've been able to gather from companies that have stayed for over a century is to either work in a field that's not likely to be disrupted, or have strong enough R&D to be the one disrupting.

        we don't hear much about sheet-music manufacturers these days.

      • by fatphil (181876)
        Upthread ( http://news.slashdot.org/comments.pl?sid=3288637&cid=42161809 ) is the wonderful quote "Pity, so many people lost jobs because of a few retarded managers at the top of their companies."

        I find it odd that you consider Nokia to be an example of strength. I'd consider it to be the exact opposite, and an embodyment of the same retardedness.

        > The message is: don't quit too easily.

        Agreed. But there are different ways of not quiting, with different likelyhoods of success.
    • by dbc (135354)

      Read anything by Clayton Christensen. He has been writing about the phenomenon and outlining solutions that work, for years. Many. Years. Kodak was an obvious slow motion train wreck to anybody that had read his books. Digital photography is the modern poster child for how a cheaper, crummier, technology eventually eats the lunch of the old guard as it improves. CC obseved the same thing happen years before with steel mini-mills.

      He has a book titled "Disrupting Class" about how modern developments (Khan

      • Digital photography is the modern poster child for how a cheaper, crummier, technology eventually eats the lunch of the old guard as it improves.

        Two things make it totally NOT obvious at the time that Kodak was doomed.

        The first of course is, that Kodak invented the modern camera sensor. It was Kodak that developed the Bayer sensor to begin with.

        The second was that Kodak came up, in conjunction with a few other film companies, with a really good film/digital hybrid. It was called Advantix.

        The reason this w

        • by dbc (135354)

          No, it WAS totally obvious, and you said the key phrase yourself: "they never toally committed" -- the handwriting was on the wall for the film business, but they just couldn't bring themselves to shift enough resources over to digital. They were always afraid of cannibalizing the film business. It was that fear that doomed them, and it was totally dead obvious to anybody with Silicon Valley management experience. They never went after consumer digital cameras in any serious way. It was like watching a d

          • No, it WAS totally obvious, and you said the key phrase yourself: "they never toally committed"

            The reason it was not obvious is because at a number of points it was possible to change course - they just never did. It's all too easy to claim in hindsight it was obvious; but anyone that thinks so did not properly consider possibilities at the time.

            *You* didn't see it coming because you think like their managers

            No. The problem is that you fail to understand that film had very real and huge advantages in qua

    • Given how frequently (and often painfully, toward the end) companies seem to founder in the face of structural changes that they can't do much about (short of essentially re-founding as something else, just carrying over the campus and the capital), I have to wonder if there has been any work done outside of the barbaric corporate raider sector on building companies with clean exit strategies...

      After all, there isn't any reason why a company needs to struggle to perpetuate its existence forever (any more than a company would struggle to perpetuate the existence of a given product line forever). Sure, the process that companies who do fight and then die go through is pretty grim; but that is, at least in part, because they keep struggling even after the situation is hopeless, and just bleed and bleed and bleed.

      Is there a process where you just quit before you are behind, wind down neatly, rather than the corporate equivalent of spending a few years stuck full of tubes and unresponsive in the ICU?

      It is possible for a company to cease operations without lots of pain. All it requires is a management willing to face facts. Ken Olsen, founder of Digital Equipment Corporation, used to tell the story of a corner barbershop that knew its finances very well. When their landlord increased the lease on their parking lot, they immediately closed: they knew that with the increased cost they could not survive.

      Some years ago, I owned and operated a store which sold and serviced the Commodore Amiga. When Commo

  • the Real Problem... (Score:5, Interesting)

    by lemur3 (997863) on Sunday December 02, 2012 @02:18PM (#42162119)

    Part of the problem that Kodak had was less to do with the Digital Revolution and somewhat more to do with the complex formulations of their photographic emulsions.

    As I understand it some of these emulsions are so sensitive to variables that one merely couldn't take the "recipe" and scale it down to a smaller run which would work wherever a coating machine existed.. The Kodak Photo Engineers had to tweak and develop the emulsion formulations for the various films they produced to suit each vessel which they were mixed in/stored in/expelled from during production...

    With many of the engineers aging and few young people coming in to the work force having the hands on access to emulsions and coating machines to learn the very specialized techniques of the Photographic Emulsion Engineering guys it put kodak in a situation where scaling down and suiting the changing market would become more and more difficult.

    The end result seems to be they were producing far more film than they could sell, and were having to store it instead of making profit off of it... running operations that they knew were too large... and stuck in a spot where loyal customers might not accept the changes in emulsions that may come from downsizing the operation...

    Digital imaging certainly hurt.. but the extremely complex emulsions and coating really didnt help.

    The biggest loss from Kodak and as we are finding with the people trying to replicate Polaroids instant films.. is the stuff you dont learn in chemistry class, or from a masters degree in Photography.. its knowing how to troubleshoot problems with emulsions and make consistent high quality coating machines..

    While a lot of the processes in the history of the medium of photography can be done without much trouble as a DIY thing.. modern high speed emulsion films and developing papers are one of the few things that are, even with the right tools and ingredients.. likely out of the realm of possibility for the most hardcore of us. (with only a few people i know of even attempting this)

    This is not a "good riddance" type thing.. high speed modern film isnt replaced by digital..

    With the death of many of these former emulsion engineers we stand to lose a photographic process that has been with us for over 100 years.. and that sucks.

     

    • OTOH, the technology that comes from creating high quality coatings [kodak.com] on an industrial scale has applications far beyond photography.

      I guess it's not lucrative enough to support the entire company, but they have tried to capitalize on what they know.

    • by vlm (69642)

      As I understand it some of these emulsions are so sensitive to variables that one merely couldn't take the "recipe" and scale it down to a smaller run

      Standard chemical engineering problem. Scaling from lab to plant (and, apparently, back again) is not easy. They earn their salaries...

      the stuff you dont learn in chemistry class, or from a masters degree in Photography

      Again, above, you want a ChemEng not a chemist or a artist. Probably your best best is the organic coating aka "paint" chem engineers. Note that they spend their time making pigments that DONT alter with exposure to light so you're asking a lot (kinda like the difference between black hat and white hat hackers)

  • by Vinegar Joe (998110) on Sunday December 02, 2012 @02:26PM (#42162173)

    Kodak's CEO, Antonio Perez, was named to Obama's Council on Jobs and Competitiveness.

    http://pmanewsline.com/2011/02/24/antonio-perez-appointed-to-the-president%E2%80%99s-council-on-jobs-and-competitiveness/#.ULudQOS1Uzk [pmanewsline.com]

  • When puzzling over some strategic move by Kodak upper management, my colleague would say, "People much smarter than us have this all figured out."
  • by Teun (17872) on Sunday December 02, 2012 @03:10PM (#42162437) Homepage
    At the original factory for Polaroid media in The Netherlands some guys are again producing the 'film' you need to continue using your late model Polaroid cameras:
    http://www.the-impossible-project.com/?nointro=1 [the-imposs...roject.com]
  • What do they mean there is nothing like Tri-X? What about HP5 Plus?

    The article mentions Tri-X's hard-core following, the demise of Pan-X and how Fujifilm has done better, but it completely neglects to mention Ilford. Ilford sells films that compete against Tri-X (HP5 Plus) and Pan-X (HP4).

    I believe that Ilford went through a bankruptcy, but is doing OK now. I think it would be interesting to learn how they are doing compared to Kodak's analog film division.

  • by SternisheFan (2529412) on Sunday December 02, 2012 @03:54PM (#42162659)
    I was going to submit this as a story, but this works.

    http://money.msn.com/investing/worst-business-decisions-ever [msn.com]

  • If these two companies didn't see digital photography coming at them like a bus they were stupid. It was get on board in a big way or be roadkill. I'm a darwinian capitalist. No business gets bailed out. When the banks tanked the government should have bailed out the bad mortgage holders, not the banks. Like the FDIC - insure the citizens, screw the businesses. They want to make money? Don't screw up.
  • .. and I bet there are plenty of Slashdot users who still shoot film instead of, or in addition to (me) digital. Actually, I was going "mass market" -- I normally shoot E6 transparencies ("slide film"). Now *that* is a business that's fast disappearing.

    True black and white film, however, will be around forever, as an art medium. It is much, much easier to make (some can actually do it at home), and there are several small-scale manufacturers in Eastern Europe, England, India and China, as well as Fuji, the

    • by ninjagin (631183)
      Thank you for making this point. I still shoot on film from time to time (at least a few rolls a year, so not much, admittedly). The truth is that the resolution of film is at a molecular level, which makes it a little tougher to work with, but especially gratifying when you get the result you want. Until we have sensors that can detect at molecular resolutions, there won't be true equivalence. That said, with digital pictures, it's positively amazing how easy it is to repair poor exposures and make enhance

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