Good news and bad news from Kodak bean counters

<p>Kodak announced restated earnings for 2010 that were down by $617 million. The change comes from a reduced estimate of "good will" in the film business. Good will covers the intangible assets such as brand name and loyalty of customers. This has nothing to do with cash flow, it just means that the intangible side of the film business is not worth as much as previously estimated. On the plus side, Kodak has extended the useful life estimate of buildings and equipment in the film business. They now say these assets will be used at least through 2017 instead of 2014.</p>

<p>More details at: </p>

<h1><a href="http://www.democratandchronicle.com/article/20110225/BUSINESS/110225016/Kodak-restates-2010-financial-results-loss-much-larger-than-first-reported-?odyssey=tab|topnews|text|Business">Kodak restates 2010 financial results, and loss is much larger than first reported</a></h1>

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<p>To me this looks as if Kodak is fighting for its very life. Reducing good will = preparing wall street for future losses.<br>

Upgrading useful life estimate of buildings, full of equipment they said in the previous sentence being close to worthless = please don't loose all faith in us on wall street!<br>

Seems to me they are on an excecise we call rolling a snowball uphill : everyne knows the thing is getting heavier and heavier for every few yards, sooner or later it will be too big and come tubleing down, crushing you.....<br>

What they really are telling us is that they now can see a horizon of 2017 instead of 2014, but are pessimistic in the long term. What has Kodak to offer, of in-house products with a future, in todays world?</p>

<p>Doesn't look good.</p>

<p>Just received my weekly Value Line report. Kodak is one of the companies in the report.</p>

<p>Sales in the wrong direction. No profits.</p>

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<p>To me, Kodak in recent years represents the American dilemma: Initial technology lead but then failing to expand or even hold market position. They had the first (?) digital SLR but then failed to come up with a mass-produced product.</p>

This seems somewhat analogous of family wealth - The first generation acquires it, the second generation maintains it, the third generation squanders it away. Back when TV shows had only one sponsor, Kodak used to be the sponsor of the "Ozzie and Harriet" show. Good wholesome family show, good wholesome family film and cameras. I see little of Kodak being advertised anymore.

<p>Mr. Dainis makes two good points.</p>

<p>*****"<a href="../photodb/user?user_id=423911">James Dainis</a> <a href="../member-status-icons"><img title="Moderator" src="../v3graphics/member-status-icons/mod.gif" alt="" /><img title="Subscriber" src="../v3graphics/member-status-icons/sub10plus.gif" alt="" /><img title="Frequent poster" src="../v3graphics/member-status-icons/1roll.gif" alt="" /></a>, Feb 26, 2011; 11:24 a.m.</p>

 

<p>This seem somewhat analogous of family wealth - The first generation acquires it, the second generation maintains it, the third generation squanders it away. Back when TV shows had only one sponsor, Kodak used to be the sponsor of the "Ozzie and Harriet" show. Good wholesome family show, good wholesome family film and cameras. I see little of Kodak being advertised anymore."***** </p>

<p> #######</p>

<p>As to the advertising, they also had advertisements in the major photo enthusiast magazines. For many years, one magazine in particular sold its back cover in color and a 3-5 page middle of the magazine how-to section that provided tips for making or developing good pictures with Kodak products every month to Kodak. In those days, Kodak was "pictures." Everybody else was "me, too." Through their lack of commitment to their product lines, Kodak is now thought of as the "me, too" of photography. Like the decadent family cited above, they've gone downhill while reassuring themselves that they are, after all, "So Kodak." </p>

<p>I think the end of Kodachrome at this point was due to lack of upper management's commitment to the product and product improvements and promotion. But as long as it was going to end due to years of foolish decisions, they made another foolish decision not to use the 75 year mark to create an advertising program that would call attention to Kodak as being one of the long term players in the photo business. </p>

<p>They also missed the opportunity to tweak a couple of their higher end compact digital cameras to give Kodachrome-like colors when a button was pushed or a switch was slid. They could have put them in boxes that looked like giant Kodachrome film boxes, name them the Kodachrome model line, and bragged in their advertising about having had Kodachrome film for 75 years. Old farts would have bought one just for nostalgia, even if they didn't use it past a testing period. Middle aged people would buy it with Paul Simon's "Kodachrome" song in mind. Younger people who follow branding efforts like drones would buy it for the Kodachrome brand, as (non?) status symbols. But alas, it appears upper managment is simply a clothes rack full of empty suits. </p>

<p>A. T. Burke</p>

 

<p>Kodak is film. As goeth film, so goeth Kodak.</p>

<p>The decline of Kodak is a real puzzle to me. One thing Kodak understood very well is that most people don't want to be photographers; photography is not a hobby to them, they just want pictures of family, friends, and vacations. It was George Eastman who said 'you push the button, we do the rest.' The 126 Instamatic and later 110 pocket instamatic were successful developments of the same idea. Digital is just the latest extension of the concept. They clearly understood the importance of digital imaging: only 10 years ago, Kodak had more patents on digitial imaging than anyone else. So why aren't they a dominant player in the digital camera market?</p>

<p ><a href="../photodb/user?user_id=1172872">Professor K.</a> <a href="../member-status-icons"></a>, Feb 26, 2011; 03:02 p.m. said.."....... So why aren't they a dominant player in the digital camera market?</p>

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<p >Like ATB says, poor management, especially in the last 10-15 years. </p>

<p>Kodak could get into some other type business. Why do they have to be limited to photography items. But at any rate I will buy Kodak film while they sell it. I like Kodak film and in fact shot a roll of the new Portra 400 today. </p>

<p>Kodak is not fighting for film - they havn't for atleast a decade. Nor do they seem so much more against it. Kodak itself doesn't seem to know what it wants. Almost like a passive/agressive stance in terms of the film/digital divide. Call me narrow minded, but I do believe if you want to be strong , you have to put your eggs in one basket - EITHER film or digital. Their descions are elusive, but we allways find out later on. A company with an identity crisis.</p>

<p>Whatever the reasons, I have a feeling Kodak will soon go the way of Agfa and will as a last move sell off its film business, machinery and buildings before they become unsellable. And why shouldn't they?</p>

<p>Personally I would love to see that happen. I think I will have to brace for incoming flak by saying this, but Kodak's legacy in film products would most likely thrive and not only survive if sold to, for example, a lean & mean, focused Chinese player with deep pockets and low manufacturing costs. Film is still alive and well in Asia.</p>

<p>How can you say that? Film alive and well in Asia? Do you know anything about it?<br>

In.......Thailand for instance the people aren't stooopid. They have switched to didgital as fast as they can. Why? they have an even bigger incentive than we: MONEY. Even over there dig vs film is 1 to 10 pricewise, same ratio as here, but different money....<br>

But there they have less money to spend, so the incentive is bigger. My friends wife's family don't want no camera but digital. Period. They even don't waant no dig. camera that uses what they think is expensive batteries, they want a camera with reloadable batteries. No matter what I tell them, that ordinary batteries and a laoder plus two NiMh batteries will be far cheaper in nthe long run, they concentrate on whats less expensive NOW!<br>

So film is dropped as fast as they can and as fast as they can lay their mitt on a dig. camera.<br>

Kodak tried to invest in film in China, did think they was looking at 20 years of business, they had to cut their losses, sell out and get out before they got stung in China also.</p>

<p>Imagine that, a big time company, once the most recognized brand in the world was unable to make money in China!! Kodak is toast. Pure and simple.</p>

 

Kodak also used to be a leader in camera production. In the opening of the "Ozzie and Harriet" show, David comes out with a Kodak Pony II around his neck<P>

 

<a href="http://www.youtube.com/watch?v=we0YK_Tx394">Ozzie and Harriet</a><P>

 

then Harriet touts Kodak film at the beginning of the show and at the next commercial break (Road Race 2/4) a salesman touts the Kodak Retina Reflex and the Kodak Pony II. At that time, Kodak was the name that most people associated with cameras and film.

<p>Kodak is no different than all the other American companies over the past 10-20 years.</p>

 

<p>Erik, I live in Asia for over 14 years now, so chances are I do know some things about things over here. But I may be wrong.</p>

<p>The consumers you are referring to are the "Mr. & Mrs. Jones" and in no way unique to Asia. I was talking about people with photography as a more or less serious hobby, profession or study-subject. Obviously a much smaller market than the J's but from what I can observe, it is doing quite well and actually gaining some converts/new users. Then there are people for whom digital will always be difficult, due to infrastructure, climate and budget - for example unless you also have a computer, you are quite limited with what you snap (Note: I write snap not "take photographs of" which is a totally different thing in my mind) and without reliable electricity it won't work for long.</p>

<p>BTW: The Jones'es are moving away from digital cameras (P&S I mean) en masse right now and using their (crappy) phones instead. Good enough for them. If I may make a prediction, the low-end and P&S digital camera market will dry up in less than 3 years from now.</p>

<p>But I agree with your closing comment that Kodak is in serious trouble.</p>

<p> I imagine that Kodak will find it's place eventually as a smaller company. I guess if they sold the film interests to a Chinese business I would stop shooting Kodak. Right now I choose it mostly because it's a US company. If it becomes a foreign market company then I will switch to Ilford for my film needs. I just shoot B/W these days anyway. </p>

<p>Ross, why change just because Kodak would be non-US? Can we even be sure where their film, or Ilfords for that matter, is manufactured today? Does it even matter? Most of what we drive, fly or buy is manufactured in China, either in whole or partly as components. There is no manufacturing left in Hong Kong where I live, virtually none in Taiwan, Singapore and even Japan anymore. It has all moved to China, as has Volvo whilst GM, Boeing and Ford just to mention a few get most if not all their components from there. Apple, IBM, HP and the list of US companies relying on Chinese manufacturing goes on..</p>

<p>It is a globalised marketplace and there is not much we as consumers can do about it - because we demand the cheapest manufactured goods at our doorstep.</p>

<p>More flak incoming, I suppose...:)</p>

<p>No flak, IBM sold their entire PC operation to the chinese several years ago, there *is* no IBM any longer just a world wide organization of consultants....</p>

<p>It really is telling when people offer their older film or digital cameras for sale on a local online site, calling them "Kodac", "Codac" and "Kodiak". The brand name is probably slipping out of the minds of much of the public.</p>

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<p>Not Ozzie and Harriet but perhaps a Kodak house organ production? </p>

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<p>It is "So Kodak". </p>

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<p> Ingemar, I just like to know where my money is going if possible. I would rather a guy in the US have the job then a guy in China. Nothing against the Chinese guy as he is just trying to get along like the rest of us but I have to choose the American guy first. I am 63y/o and grew up in a time where you bought American or you were not a Patriotic guy. It's a world economy now but I am a product of my youth. Obviously avoiding Chinese made products is impossible. But when it comes to camera stuff I can buy what I want or not buy it at all. It's just a camera. I believe that Kodak film is made in America. Hard to say for sure because there is very little honesty in the world but the box of film says "made in the USA". I do not know where Ilford is made but I believe the company may be a partnership with the Swiss, the US and Britian. I would like to know where they film is actually made but I do not. I like the Ilford XP-2 film. I use Domeke camera bags, Tiffen filters and Op-tech camera straps. All US made camera products. I cannot change anything in the world but I can vote and spend my money where I choose. </p>

 

<p >Excerpts from:<a name="00YIbb"></a></p>

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<p ><a href="../photodb/user?user_id=5957080">Ingemar Lampa</a> <a href="../member-status-icons"></a>, Feb 27, 2011; 07:01 a.m.</p>

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<p>"Does it even matter?" </p>

<p>Yes. </p>

<p>"It is a globalised marketplace and there is not much we as consumers can do about it -.."</p>

<p>We can not buy it. </p>

<p>".....because we demand the cheapest manufactured goods at our doorstep." </p>

<p>Some of us are willing to pay the right price considering value/price and will pay a higher price for quality. Unfortunately, too many US companies rebrand cheap Chinese crap or make it substandard themselves and try to fool us into paying quality prices.</p>

<p>"More flak incoming, I suppose...:)" </p>

<p>Nah... But there IS another side of the story. </p>

 

 

<p>I'm sick of Kodak, why dont they sell their film division to another company and stick with their mom-and- pop Point & Shoots.</p>