Oh no film is dead....yet again.

[jbirdweb]

<p>So Kodak disbanded the film group. Does this mean the end of Kodak film?<br>

Probably not. This is a re-organization, they are putting the film production under the auspices of another division.<br>

It's intriguing to me that smaller companies such as Ilford still produce film, still are in business and I can still buy Ilford film at any photo store I go to in the US even though it's made in the UK. As far as I know all Ilford makes is photo sensitive materials such as film paper and chemistry they are still solvent and yet the film giant is struggling. Could it be poor management? could it be too much diversity in too short a period of time? After all they make everything from batteries to computer media. Kodak has a huge sensitized materials division with massive infrastructure to support. That amount of overhead would drive any companies profitability out the window with decreased sales.<br>

Kodak sells raw chemicals has several manufacturing plants accross the country, has their own rail lines and locomotives in Rochester and many mnay irons in the fire. Compared to some of their other divisions film may not be as profitable, yet Kodak has repeatadly stated their commitment to film even as recently as last month.<br>

This has to do more with poor managemant and bad business decisions. Given all Kodak does, to put the blame on the Film division is ridiculous, how can you be one of the largest suppliers of chemicals to industry and science, manufacture batteries, videotape, digital cameras, computer media etc. and still be losing your butt because one division has slow sales? Poor management!</p>

[steve m smith]

<blockquote>

<p>Compared to some of their other divisions film may not be as profitable</p>

</blockquote>

<p>I thought it was their only profitable division.</p>

[JDMvW]

<p>Reading one story about the event, it seems to be the "<em>division</em>" that is being disbanded, but the products are being folded into the 'consumer' division, perhaps with the former head of the film division as chief?</p>

<p>I suspect that this all does not bode well for "film", but I doubt the end is nigh.</p>

[john_shriver]

<p>Nothing more than a shuffle of the "corner offices". They split it into two parts, and put them into different divisions. One part is consumer, the other is professional and media. I suspect that the latter has movie film, and perhaps the "professional" films (B&W, Portra, Ektar, Ektachrome). The former has whatever they call Kodacolor these days (Gold, Ultra, Hyper, Zow, the marketing idiots thing new names will make it sell better).</p>

 

[doug_harl]

<p>As of the Third Quarter of 2011, Kodak's Film, Processing, Entertainment Group (FPEG) income <strong>decreased 98%</strong>.<br>

See page 26 of their<a href="http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTEzODE3fENoaWxkSUQ9LTF8VHlwZT0z&t=1"> 3rd quarter 10-q</a>.</p>

<p>Whether that will continue, we won't know because FPEG was merged into other groups - to my great annoyance because this was an economic curiosity for me.It's not often where you see a disruptive technology drastically change an industry. Although, my fiancial model of the FPEG division shows them operating at a loss for the first quarter of 2012.</p>

<p>It is quite interesting that the hint of eliminating the film business sent the stock up almost 50% yesterday. I think that gives some indication of Wall Street's opinion of Kodak's film business.</p>

<p>Over the last day, I have been trying to ascertain the scope of this reorg. From what I've seen, Kodak isn't reducing redundancies (ex. canning people, closing facilities). It looks like this is an accounting reorg.</p>

<p>But here's something quite telling about Kodak's Management's thinking:</p>

<blockquote>

<p>“As we complete Kodak’s <strong>transformation to a digital company</strong>, our future markets will be very different from our past, and we need to organize ourselves in keeping with that evolution,” <a href="http://www.kodak.com/ek/US/en/Kodak_Creates_New_Business_Structure_to_Accelerate_Digital_Transformation.htm">Perez said.</a></p>

</blockquote>

<p><em>(Bold added by me.)</em></p>

<p><strong><em>My prediction is that Kodak will exit the Film business by year end 2012.</em></strong></p>

<p>Ilford, Foma, and other film companies are strictly B&W companies and their market is geared towards the artist market.<br>

Although, the decline in traditional photographing is an industry wide phenomena, I do not have access to their financials so I cannot comment on their business structure or profitability or their sales for that matter.</p>

[Dave Luttmann]

<p>Kodak just announced price increases of 10% to 15% on all their film.</p>

[jeff_livacich]

<p>Doug, film decreased 98% compared to what?<br>

What I do see in that report is that FPEG is the only thing that did not lose money- a lot of money.</p>

<p>No longer showing the film side distinctly is going to enable Kodak to hide that fact.</p>

[richardsperry]

Ilford is still in business due to its own bankruptcies and debt abandonment.

 

 

 

I still think its weird that we bailed out the schysters and bankers and ponzi schemers on wall street, and we let a real

productive company die. Something is wrong with people.

[hjoseph7]

<p>"<em>As we complete Kodak’s <strong>transformation to a digital company</strong>, our future markets will be very different from our past, and we need to organize ourselves in keeping with that evolution,” <a rel="nofollow" href="http://www.kodak.com/ek/US/en/Kodak_Creates_New_Business_Structure_to_Accelerate_Digital_Transformation.htm" target="_blank">Perez said.</a>"</em></p>

<p>Ever since this guy came on board he has been making matters worse by been steadily under cutting the film side of this company which is still producing a profit. This is what happens when you hire an outsider with no real ties to the company.</p>

[randall_pukalo]

<p>I suspect this may have more to do with setting things up for either a spin off, or to hide losses/buffer their ink and printing undertaking. Film, particulrly movie and professional films are still bringing in cash and making money. Moving them into their inkjet/commercial unit helps to hide any setbacks in this undertaking. also postions them to split the company up if needed. consumer film probably doent make much, being scarificed/prepared for ejection. My suspicions anyways.</p>

[mauro_franic]

<p>I doubt Kodak film is going away any time soon. </p>

<p>Just for kicks I order $1,000 of TMAX 100 120 which was all the inventory Amazon had though.</p>

[jbirdweb]

<p>Thanks for all the input.<br>

First thanks to Richard Sperry for his correction on Ilford, I was unaware they too had re-organized.<br>

Second this is from Jeff Livacich on another thread to a different poster.</p>

<td width="24"> </td>

<p> <strong>The film division's profits did not decline 98% in the third quarter.</strong> Go back and read the 10Q report you linked in another thread. The Film, Photofinishing, and Entertainment Group (FPEG) ended the third quarter with a $2 million profit <em>for the first nine months of the year</em>, but <em><strong>third quarter</strong></em> profits by themselves were $15 million, meaning the third quarter reversed earlier losses.<br>

Now let's look at third quarter earnings for the other two groups.<br />Consumer Digital: <strong>$90 million dollar loss</strong> for the third quarter, compared to $67 million profit for same period the year before (3Q 2010)<br />Graphics Communication: <strong>$55 million loss</strong>, compared to $35 million loss for 3Q 2010.<br />Compare that to FPEG: <strong>$15 million profit</strong>, compared to $28 million profit for 3Q 2010.<br>

So the Film Group <strong>made $15 million</strong> for 3Q 2011, while the other two divisions <strong>lost a combined $145 million</strong>!<br>

For the first three quarters of 2011, all groups:<br />Consumer Digital: <strong>$350 million loss</strong>, compared to $345 million profit for the first three quarters of 2010.<br />Graphics Communication: <strong>$171 million loss</strong>, compared to $92 million loss for the first three quarters of 2010.<br />FPEG: <strong>$2 million profit</strong>, compared to $86 million profit for the first quarters of 2010.<br />The Film Group <strong>made $2 million </strong>for the first three quarters of 2011. while the other two divisions <strong>lost a combined $521 million</strong>!<br>

So FPEG is the only profitable division as stated earlier by Steve Smith. When you consider that Hollywood, Dahliwood and China all primarily use film for their motion picture industries I doubt Kodak is going to abandon such a cash cow.<br>

As I said earlier this is due to poor managemant. When all of the divisions of such a large corporation are bleeding revenue it isn't due to lost market share from one division especially if that is the only money maker in the company. Amazingly consumer digital had a <strong>$350 million loss </strong>For the first three quarters of 2011, compared to $345 million <em><strong>profit</strong></em> for the first three quarters of 2010. How do you have a net change of $695 Million in one division in one year? simple, bad leadership!</p>

[rossb]

<p> Photography for me is a relatively inexpensive hobby. I do not need to buy any new gear or anything. Just the cost of some film is all and the cost of printing and framing for some of the pictures. . But anyway if Kodak needs a higher price for their film I am fine with it. It does not bother me at all. </p>

[walter_degroot]

<p>this is complcated pathes for my old mind to follow<br>

But I get the strong impression that the FILM business could turn a profit on it's own.<br>

if it did not have to support other divisions that are total disasters.<br>

It reminds me of to people who suggest and belkieve mizing Folgers Maxwell house to gether with a little bit of any store brand.<br>

and getitng MORE & BETTER coffee. Since I am that old man and obviously know nothing about nothing.<br>

I am mocked when I suggest buy one brand and never mix any bad to make more good coffee.</p>

<p>when we lived on the farm they said " one bad apple spoins a whole barrell'<br>

doesn't that apply to businesses as well. ?<br>

yest see, If we combimne the plastic half broken toy busness with the Maglite division it will look great.<br>

where do these exceutive come from?<br>

a freien who had a high position with Motorold 2 way communicatiosn.<br>

told me the smartest manager he ever knew was hired away by Kodak 20 years ago.<br>

after two years he quit.<br>

when asked he told his old friends the company is impossibly they will surely fail.<br>

this man knew over 20 years ago.</p>

[hjoseph7]

<p>To add salt to the wounds:<br>

<a href="http://www.latimes.com/business/la-fi-ct-academy-nokia-20120112,0,4062074.story">http://www.latimes.com/business/la-fi-ct-academy-nokia-20120112,0,4062074.story</a> </p>

[david_pickard]

<p>'IF' Kodak (or anyone) would make film cameras, film sales could increase or at least flatten. Since everyone stopped no one had a choice but switch to digital.</p>

[leicaglow]

<p>David, There are plenty of film cameras still made (Nikon makes two, last I checked), and Leica, Voigtlander, Mamiya, Hasselblad, and many others. </p>

<p>If the market is lucrative enough for the Foma's, Efke's, and the like to continue making film, that says something. If someone is willing to take over Polaroid equipment and keep producing it, then someone is going to want to make Kodak films. I'm not really worried about it.</p>

[jbirdweb]

<p>I do love digital for one thing, I just bought a Mamiya RB67 complete with lens and prism and a Nikon F3 with motor drive and Nikon zoom lens all for $550.00 from KEH and all are in excellent condition. Makes me happy and sick all at the same time.</p>

[rossb]

 

<blockquote>

<p>'IF' Kodak (or anyone) would make film cameras, film sales could increase or at least flatten. Since everyone stopped no one had a choice but switch to digital.</p>

 

</blockquote>

<p>Camera's are starting to get really old. </p>

 

[kris-bochenek]

<p>80/20, 80% of your income should come from 20% of your product. I am not an economist but this 80/20 rule makes a lot of sense.</p>

[doug_harl]

<blockquote>

<p><strong>The film division's profits did not decline 98% in the third quarter.</strong> Go back and read the 10Q report you linked in another thread. The Film, Photofinishing, and Entertainment Group (FPEG) ended the third quarter with a $2 million profit <em>for the first nine months of the year</em>, but <em><strong>third quarter</strong></em> profits by themselves were $15 million, meaning the third quarter reversed earlier losses.</p>

</blockquote>

<p>Oops, let me clarify: They declined 98% from end of third quarter last year -<strong> which is even worse than what I originally stated. (98% decline for the end NINE MONTHS instead of for just the quarter.) </strong>Thanks for pointing that out. I didn't mean to make things look better than they were. Their statements can be confusing with their reorganizations, charge-offs, Goodwill, and other things that have me hitting the books.</p>

<blockquote>

<p>When you consider that Hollywood, Dahliwood and China all primarily use film for their motion picture industries I doubt Kodak is going to abandon such a cash cow.</p>

</blockquote>

<p>And they buy all of their film from Kodak? Even though there are much cheaper alternatives made in China?</p>

<p>Regardless of the wording of my post, I still believe that Kodak, one way or another, will exit the film industry this year (2012) - bankruptcy or by choice.</p>

[doug_harl]

<p>Let me clarify:<br /> I am probably the most negative person here on P.net about the film industry. I never said film is dead.</p>

<p>I basically did say that film is dying and will be dead - like glass plates.</p>

<p>BUT - I'm looking at an S&P report dated 1/7/12 about Kodak and all I can say is that their predictions about the film industry are a bit more optimistic than mine. They just say decline instead of dying.</p>

<p>Anyway, come 23:59 31-12-2012 Kodak could very well be still in the film business and I'll have egg on my face.</p>

<p>I like eggs.</p>

<p>So what's my motive for posting here about Kodak and the film industry?</p>

<p>Shear wonder.</p>

<p>I like to read history and especially economic history - yes, I'm a weird little man. I have read time and time again about disruptive technologies but never seen an industry changed so much like the film industry.</p>

<p>And it's interesting the way folks are so attached to a technology and to a company. It amazes me how saying "Kodak is dying and film is dying" can create so many posts. That's say quite a bit about the Kodak name and how photography has become such a part of our society.</p>

<p>But what will all of you get out of this:<br /> If you love TMax - I would keep a stockpile of it.<br /> If you love Portra - the same<br /> Ektachromes? ditto<br /> Tri-X: that's a no brainier.</p>

<p>R.I.P. - <strong>Kodachrome</strong>, Plus-X, Ektachromes of yesteryear, Portra VC and NC, etc ....</p>

<p>So, let me ask you this: so what? So, what about what I have to say? Or anyone else?<br /> Film is dead! Film is dead!Film is dead!Film is dead!Film is dead!Film is dead!Film is dead!<br /> And that is a problem because?</p>

<p>If film survives to the day my grand kids know what it is and can buy it easily, more power to everyone.</p>

<p>Thank you for your correction about my statement about the Third Quarter earnings, btw.</p>

<p> </p>

[lwg]

<p>If Kodak's film business dies it's not from lack of demand, but from poor management. Sure it's been contracting for a while, but it's still making a profit. Kodak should really quit pushing their digital crap on the world for a while. Go back to the drawing board and see where they can innovate and lead. Pushing tired consumer cameras and inkjet that no one really wants is just killing their brand identity, and apparently costing them money. Perez won't do that since he set this course, so he should be fired (without a golden parachute).</p>

[jeff_livacich]

<p>I think a 98% decline in just one quarter would be worse (about 97.6%, actually).<br /> <br /> To be accurate: the numbers reflect earnings over periods compared to same period the year before. They do not account for what happened in the last quarter 2010. They compare performance, not year to year earnings.<br /> What the numbers show is the 3Q 2011 profit more than corrected the losses from Jan 1, 2011 to end 2Q 2011. In one quarter film went from -13 mil to +2 mil. Not bad.</p>

<p>Going on what you are saying and looking at the over 100% decline over in the Consumer Digital group (+345 mil to -350 mil) in one year, that must surely mean it is <em>really</em> dead.<br /> And the Graphics Comm. group, wow. They went from losing 92 mil to losing 171 mil over the same period, an 85% increase in loss. Bury that one quick-it's stinkin' real bad!</p>

[doug_harl]

<blockquote>

<p>I think a 98% decline in just one quarter would be worse.</p>

</blockquote>

<p>No it's not. 98% decline over 9 months is worse because <strong>it shows a long term trend and permanent decline as opposed to a temporary blip in declined sales. <br /></strong><br /> That's why.<br /> And they have been experiencing declining film sales for the last decade.</p>

<p>Fuji is experiencing the same thing - and I'm having a hard time finding documentation that I found before(Japanese financial reporting is a bit different from ours) - I have been concentrating on Kodak. BUT Kodak in their own reports say that <strong>they are experiencing industry declines in film sales.</strong></p>

<p>But again, what's the big deal? Film sales are declining World wide. Why does everyone doubt this? It's like I'm saying, "Hey guys, the sky is blue." and everyone is doing their best to discount what I'm saying. All of the stock market, credit, and industry analysts are saying the same thing I am - come to find out -so, I'm becoming increasingly confident about saying, "Film is declining." get over it.</p>

<p><strong>We got the numbers that prove what we're saying but folks are denying it.</strong></p>

<p><strong>What gives?<br /></strong></p>

<p> </p>