What will Carp's retirement mean for film?

[reuben_c]

Will Daniel Carp's retirement as Kodak CEO on June 1 have any effect

on the company's agenda for traditional sensitized materials?

 

Will Kodachrome receive a new lease on life?

 

Does anyone know who they'll be replacing him with?

[reuben_c]

Well, that was fast. Anthony Perez will replace him.

 

Does anyone know what implications that may have for traditional photography? Anyone know where Perez stands on "issues"?

[reuben_c]

Here's a possible ray of hope from an article on thestreet.com:

<P><A

href="http://www.thestreet.com/_yahoo/markets/marketfeatures/10222843.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA">Carp

Out as Kodak CEO</A>

<P>Excerpts:

<BLOCKQUOTE>Daniel Carp, the Kodak chief executive whose decision to reorient

the camera company around digital imaging has been a source of enduring

controversy, announced Wednesday that he will retire at 57.

<br>...

<br>Carp will be succeeded by Antonio Perez [...] The Spaniard is two years'

Carp's senior.

<br>...

<br><B>The appointment comes as Carp's vision for an all-digital Kodak remains in

flux.</B> [emphasis added]</P></BLOCKQUOTE>

<P>Comments: It looks like thestreet.com sees Carp's exit as being tied to

problems with Carp's "vision" being "in flux". Since his "vision" was for "an

all-digital Kodak", it seems logical to speculate that his exit might mean a

newfound respect for the "silver goose" that pays the bills. </P>

[reuben_c]

I need to clarify the above -- he is exiting as CEO on June 1, but will remain Chairman until Jan (06), at which point he will retire.

 

http://biz.yahoo.com/rb/050511/tech_kodak.html?.v=1

[robert_johnson15]

The Kodak annual stockholder meeting is today! Stay tuned for "Film at 5PM" that is unless they kill that too at today's meeting.

 

I just wonder how much Carl Icahn and his shares of EK had to do with this decision?

 

With Icahn, the shareholders (and him in particular) will receive shareholder value. Wonder if the "throwing the money down the digital toilet" will continue? I guess only time will tell?

 

Robert Johnson (a big Kodak film user, but a very small digital user)

[joeb]

Dpreview is reporting that Kodak is now #1 in digital point and shoot sales in the US for the first quarter. It also notes Olympus has lost money for the first time on digital camera sales and is cutting 4000 jobs in China. I don't know what 1 quarter's sales mean. There are many opertunities to inflate numbers in a single quarter. If Kodak remains on top for two or three quarters, the #1 rank would mean more to me.

 

The troubles Olympus is expirencing point to issues with a strategy focusing on low end camera sales. Kodak has always made most of it's money selling consumables. Fuji has supplied most of the 1 hour processors with Frontiers. HP has done the same in Inkjet printers. Both these companies are executing Kodak's model of supplying consumables better than Kodak.

 

The real question is can Kodak return to being the dominate player in consumables. RA-4 is currently equivilent to high end ink jet at a lower cost. The supplier where I have my large prints produced uses an OCE LightJet and Fuji Crystal Archive paper. I don't see many Lightjet processors using Kodak consumables.

 

Kodak has always sold inexpensive cameras. I am sure they made a profit from these sales. I am also sure most of the profit was from consumables and processing. The model has changed. Small processors dominate the market. Film is a mature and shrinking market. If I were running Kodak I would focus investment and R&D on the processing market.

[reuben_c]

<i>If I were running Kodak I would focus investment and R&D on the processing market.</i>

<p>

What is your take on their having spent big money to take over the rights to the "dry" C41 processor/scanner/printer/CD-burner technology invented by Applied Science Fiction?

<p>

They spent the money to take over the technology -- a truly innovative, if not "disruptive" technology -- and then they dropped it!

<p>

The net result was some money in the pockets of the inventors, and the actual technology joining the ranks of the mythical "100MPG carburettor".

[joeb]

It sound like the decision may have made sense. I don't know the costs involved or the technology. The purchase may have made sense before film sales started sliding. The questions I would have would be:

 

Where is the quality of results in relation to current technology?

 

How do costs compare?

 

What is the market? Size? Price points? Demand?

 

To get a handle on these issues Kodak may have needed to purchase the rights. As the 1 hour market has matured prices are dropping. The cost to enter than market with a new technology is high. Kodak's answer to the 1 hour market is their PhotoMaker. The inkjet prints it produces are no better than the ones you can produce at home on a sub $100 printer. The advantages it has are speed and availablity.

[reuben_c]

My understanding of the technology is gleaned entirely from the consumer rags, as I no longer receive the trades. But from what I gathered, it was not intended to be one more "one-hour-lab" device, but was intended to be a "disruptive technology" that would largely carve its own niche.

<p>

If anything, rather than cut into the traditional film/processing market, it would, as I understand it, compete with the <i>digital</I> market, because it gave traditional film consumers much of the convenience of "digital", plus, it added benefits that "digital" could not match.

<p.

I'm talking about things like the ability to change "sensors" by buying a different type of film. Users could "upgrade" the "sensor" by buying faster/sharper/etc. film. And, they would find that <I>all</I> of their 35mm cameras were "digital".

<p>

While obviously not all digital users would benefit from the technology's unique feature set, it's indisputable that many <i>would</I>, and each one of these users would conceivably represent a lost (digital camera) sale.

<p>

Try as I might to rationalize it any other way, I keep coming back to the idea that the purchase was accomplished not in order to bring the technology to market, but rather to keep it <i>off</I> the market. Hence my tongue in cheek reference to the apocryphal "100MPG carb" which, according to the myth, was purchased by "big oil" with the idea of keeping it off the market.

<p>

I'd really like to know what kind of discussions and debates transpired when the decisions were made to acquire and then bury the ASF technology. And as someone who's worked on various projects of my own over the years, my heart goes out to the ASF propellerheads, who while no doubt compensated financially, must have had an emotional stake in wanting to see "their baby" come to fruition.

[john_shriver]

Kodak inflicted a serious wound on themselves by not getting into the 1-hour processing hardware business, to protect their own labs. (If you don't compete with yourself, your competition will be very willing to.) Meanwhile, the labs are not much of a profit center anymore.

 

I wonder how many Frontier machines are using Kodak RA-4 and C-41RA checmicals, instead of Fuji-Hunt chemicals? Of course, I don't know if the patent cross-licensing between Kodak and Fuji-Hunt is 50-50%, or if Kodak gets some royalties on all the Fuji-Hunt chemicals sold.

 

I suppose that Kodak didn't get into consumer color printers for the same reason. Protecting the labs. Selling printer ink would be perfectly in the Kodak consumables model.

 

Nothing is going to save Kodachrome. It's not just that Kodak has chosen not to invest in releasing any new Kodachrome film products. It's that the consumer slide film market is dead as a doornail. When was the last time you were at a "slide show"? The 1980's in my case. Railfans are probably of the larger remaining non-professional markets for slide film.

 

The slide film market is 90% commercial work, and they need the quick turnaround of E-6, and could mostly care less about archival qualities. (Of course, E-6 is reasonably archival now.)

 

There's just no possibility of a positive return on investment in a new Kodachrome film. Heck, there's not much chance of one for a new generation of E-6 films. Velvia 100 may be a last E-6 gasp.

 

The other thing that killed Kodachrome is that the whole color negative and printing process has gotten dramatically better in the last 30 years, and a hell of a lot cheaper as well. Kodacolor-II (and C-41) was a big step over Kodacolor-X, and today's Kodak and Fuji films are a big step over Kodacolor-II. Fuji's competitive push against Kodak has certainly caused both of them to develop much better films. The printing papers have so much better a color gamut, higher saturation, freedom from color casts, etc.

 

Also, there are lots of places that make reasonable color prints at reasonable prices. Computer automation has made this much easier. For non-professional processing, in the 1970's there was Kodak, which was quite respectable, but quite pricey. There were other places that were very cheap and nasty. Now a Fuji Frontier can produce very respectable results at a modest price, without any intelligent human input. (It can produce even better results teamed with an intelligent human, but this lowers the throughput and increases the cost.)

[rowland_mowrey]

John;

 

Very well stated. I'm not sure though if EK inflicted a wound on themselves though. Dan Carp does have a strategy.

 

Look at Fuji. They have invested heavily in reversal films, and now they are posting a loss in both film sales and in digital sales. EK has sustained a lead of 1st place this quarter and 2nd place last quarter in digital sales. Lets just hope they turn the losses into a profit.

 

Ron Mowrey

[david_shaffer]

By all accounts, Dan Carp is a lifetime Kodak man who has done a brilliant

job of dragging the company into a seriously competitive position in digital. It's

hard to think of any similar story of an old-tech firm morphing a new-tech

player. The game is not over by any means, but at this point it looks like a

miraculous achievement. That said, by background Perez appears to be

better qualified to lead the new-tech company. He was recruited at the outset

to succeed Carp, and my guess is that Kodak had to move up the date of the

transition to keep him from being lured back to run HP now that Carly Fiorina

has been dumped. Nothing more to the story than that.

[al_divenuti]

Perez came from HP where he managed digital imaging. I would expect that this will, if anything, accelerate Kodak's depature from silver-based film products. The pace of that departure, though, will be bound by cash flow concerns stemming from the very healthy depreciation EK still gets from its film ops.

[reuben_c]

<blockquote><i>I would expect that this will, if anything, accelerate Kodak's depature from silver-based film products. The pace of that departure, though, will be bound by cash flow concerns stemming from the very healthy depreciation EK still gets from its film ops.</I></blockquote>

<p>

Am I reading that correctly?

<p>

It sounds like you're saying that they're going to work harder and faster to kill off film, which is making them lots of money.

<p>

Please tell me that's not what you meant to say!

[rowland_mowrey]

Guys;

 

I enjoy all of this 'carping' and commentary about what is going on at EK, when I would guess that 99% of you have never even been to Rochester let alone go inside the fence at Kodak Park or visit Kodak Office.

 

I spent 32 years behind the silver curtain, and still talk to friends over lunch. And, yes it is a different company and yes it is going digital, but yes, it is still doing R&D on conventional products. The newest products include the UC film you rave about and Endura paper with 100 years of light stability (if the hype is to be believed), but then I heard Dan Carp speak about the new couplers in Endura personally and know the man in charge of the changeover to Endura and know what went on. In a word - research. Another word - improvement.

 

So, new products will appear, but at a slower rate reflecting the lower percentage of profit from these produts.

 

I went to the store today to buy some odds and ends. They tell me that B&W products are selling poorly, but what they do sell is mostly EK even though they can get Ilford and other similar products. Color negative film and single use cameras are still selling well all things considered. Reversal films are almost dead in the water.

 

Amateur motion picture is really dead and that is why the recent death of motion picture Kodachrome reported here.

 

So, no matter how much we love film, that will not rescue its decline from the desires of the huge body of people out there who want digital for instant pictures. They are the ones who want fast food, and we are the ones who love to dine in fine restaurants. That is a fundamental difference that cannot be ignored.

 

Ron Mowrey

[al_divenuti]

>It sounds like you're saying that they're going to work harder and faster to kill off film, which is making them lots of money.

 

Please tell me that's not what you meant to say!

 

Well, good news, because that isn't what I was trying to say.

 

Film products may sell with good margins (especially compared to digital, which as with all consumer electronics market segments, fairly well sucks margins-wise - but Kodak takes a P&L bath as film sales decline.

 

But Profit & Loss is only half the story because for accounting purposes if Kodak retains its film operations it can still get healthy cash flow as depreciation gets added back to your cash flow. That's hugely important for how costly it becomes for a company to borrow money.

 

So Kodak could continue to have poor earnings from film but it still needs it to stay afloat in order to continue to be able to borrow money to fund its digital transformation.

[ilkka_nissila]

Ron, is there any place which publishes actual sales numbers of different film types? It would be helpful to see the numbers in order to understand the big picture.

[rowland_mowrey]

Ilkka;

 

There is no published data on the detailed breakout. I thought there was, but there is not. There have been general plots of negative vs transparency materials published in our local paper, and a few in USA Today, but the post was deleted from PN and I don't have a URL.

 

Negative is going up within the overall declining sales, and transparency (Kodachrome and Ektacrhome) seem to be accounting for that. Negative sales include single use cameras though and motion picture, and both of these are pretty strong (again in a declining overall picture). Make no mistake, film is going down but the relative ratios within the sales, or the distribution of products is changing radically.

 

Ektachrome E6 really killed Kodachrome by about 1990 when the last Kodachrome ads were published. Now, digital is killing Ektachrome and Fujichrome but people still seem to want negatives and prints. Hollywood loves the new negative film even in the face of digital there, and of course the print film is apparently selling well.

 

B&W sales remain about the same in proportion to total product sales, ie, declining but at the same percentage wrt other film products.

 

This is a thumbnail of my reading of all of the EK articles in local papers and USA Today on-line. In the past, some have disagreed strongly with what I have said. I cannot say how we differ though reading what they have posted. I agree with the fact that film sales are decreasing sharply. I merely add, as I did above, that the mix of products in color is changing with negative moving up and positive moving down.

 

Fuji has also suffered in this.

 

That is about all I can say.

 

Ron Mowrey

[ilkka_nissila]

It is quite understandable that the sales of slide film is going down faster than negative as digital is more of a direct replacement for slide film than it is for negatives. However, I've done some recent testing and I've found digital a disappointing replacement for slide film in some applications. I really would like to see the variety in film based products (and digital) available in the future.

 

I do use more C-41 B&W and color negative than I used to but I do think there is a place for slide film, although the volumes may be declining. Let's hope they settle at some level.

[rowland_mowrey]

Ilkka;

 

I agree with you completely.

 

But, lets face it, people don't like to get out that silde projector and screen. It is easier to take digital (of whatever quality) and show them on the monitor or your TV screen.

 

Ron Mowrey

[rustys pics]

Since Kodak just announced they are killing off Super 8 kodachrome, I'd say you'd better

stock up on any kodachrome products. Kodak seems intent on destroying film and the

American work force that produces it. Look for any remaining Kodak film to be made in

China within 5 years.

 

Kodak dug their own grave by failing to educate the public about the superior archival and

dynamic range of film vs digital. The only way for them to survive and become profitable is

to hire foreign workers at near slave wages and turn out obsolecent digicams with a half

life of 10 months. Gotta love that global economy!

[ilkka_nissila]

I don't think super 8 kodachrome looked anything but terrible compared with digital video, so if it was replaced with an E-6 process film, it can't be anything but a good thing. Film needs to be larger to look good, and that's expensive for video.

 

As for the work force, if the work force in the US can't compete, then companies will produce photography stuff elsewhere, as they do for a great extent already. If you complain about this, I would like to remind you which nation has always been the most eager proponent of a global market economy. Yes, that's right.

[kelly_flanigan1]

The local Walmart is always an interesting data point for me. The still stock about 4 to 6 rolls of Kodacolor 110. I bought all four rolls for my freezer for my old Pentax A110. Two days later they have 6 more rolls as there stock full point. A week later half are gone. They dropped 35mm Tri-x last year! ; but 110 Kodacolor turnover well..It outlasted disc! will it outlast APS ? :)

[kelly_flanigan1]

George Fisher >> Daniel Carp>> Antonio Perez -<BR><BR>Antonio Perez is 2 years older than Carp; who is "retiring". The Dodgers 2B Antonio Perez made $320,500 in 2005. Bats: Right; Throws: Right; and is 25; #26. He is on rehab in Las Vegas Triple-A until Tuesday. <BR><BR>Business week calls Kodak's Antonio Perez a <b>"digital warrior for Kodak</b><BR><BR>Perez at HP was deep into inkjet cartridges; printers; and the profitable "razer blade concept" of the annuity in repeated sales from cartridges. <BR><BR>In Baseball George Fisher was the first major league player from Delaware; born and played there. <BR><BR>Older base ball game news; with strikes; fouls and pitches:<BR><BR> <a href="http://www.forbes.com/2002/01/29/0129carpstrike.html"><i><b>"The conventional wisdom is that Eastman Kodak Chief Executive Daniel Carp is like the manager of a once-glorious baseball team whose stars are well past their prime and whose rookies are extremely green."</i></b></a><BR><BR><BR>. It ain't over till it's over. Yogi Berra