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The Rise and Fall of Kodak 352

H_Fisher writes "Michael Hiltzik of the L.A. Times writes with a frank look at the decisions and changes that have led to Kodak's decline from top U.S. photography company to a company whose product is almost irrelevant. He writes: '[Kodak] executives couldn't foresee a future in which film had no role in image capture at all, nor come to grips with the lower profit margins or faster competitive pace of high-tech industries.' He also notes that Kodak's story comes as a cautionary tale to giants like Google and Facebook."
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The Rise and Fall of Kodak

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  • by Anonymous Coward on Monday December 05, 2011 @09:18PM (#38274984)

    This story should also come as a cautionary tale to the recording industry!

  • by bigredradio ( 631970 ) on Monday December 05, 2011 @09:20PM (#38275018) Homepage Journal

    more or less a lost cause now

    I would say less. If they were able to cut their expenses to the bone, then take on additional funding to create innovative imaging products, then they would have a shot. Their brand recognition is still worth a lot. There are a lot of people over 30 who will have some trust in new Kodak products.

    Unfortunately, they have tried to create products by copying the status quo. They should raid developers and designers from Apple and try a fresh start.

  • Next, paper. (Score:5, Insightful)

    by Animats ( 122034 ) on Monday December 05, 2011 @09:21PM (#38275024) Homepage

    The paper industry is feeling the pinch, too. Newspapers are dying, and paper mills are closing. The latest generation of computer users feels little desire to print anything. The paper industry had a "put it on paper" promotion. That seems to have disappeared.

    Paper requires an infrastructure. In business, paper implies filing, filing cabinets, folders, record storage, file clerks, trash cans, shredders, staplers, paper clips, paper recycling, and other cost items. This not only increases cost, it increases head count and makes outsourcing and offshoring harder.

    Printed forms are really expensive. Someone has to fill them out, they have to be moved around, sorted, and filed. and probably entered into into a computer at some point. It's been a long time since a forms manufacturer could advertise "the world is run on tracks of printed paper".

    There are still many businesses with a lot of legacy paper, but the trend is down.

  • by the_humeister ( 922869 ) on Monday December 05, 2011 @09:22PM (#38275040)

    It's lesson for all businesses: adapt or become irrelevant. Look at IBM. They used to make tabulating machines. Now they make most of their money selling services. Some industries change at a glacial pace (e.g. oil, cement, Christmas trees) so companies entrenched here can take their time adapting to new realities whereas other industries change pace almost daily (e.g. fashion), so companies in these industries also need to adapt very quickly (e.g. Coach, LV, etc.).

  • by Anonymous Coward on Monday December 05, 2011 @09:23PM (#38275056)

    Actually I'd say the attempts at new features (eg. idle, poorly done 'Web2.0') have done more to harm /. than stagnancy.

  • by Junta ( 36770 ) on Monday December 05, 2011 @09:27PM (#38275086)

    I want to say I enjoy slashdot as one of the few sites actually implementing a nice and full threaded discussion system. We aren't talking about obsolescence, but rather a preference. Too many discussion systems either reorder posts, support no or one level of reply, and other such silly limitations.

    Aside from that, the quality of commentators tends to be higher. More often than not, someone related to or very keenly aware of the subject of a story chimes in with additional data whereas most other forums explode in a barrage of inane chatter, trolls and woefully misinformed people. Yes, slashdot is subjected to that as well *but* if we are grading on a curve here, slashdot's community comes out pretty good.

  • by Junta ( 36770 ) on Monday December 05, 2011 @09:28PM (#38275094)

    They already 'learned' a lesson:
    New technology *will* destroy your business model, so destroy the technology while you still have power!

  • by rubycodez ( 864176 ) on Monday December 05, 2011 @09:37PM (#38275174)
    of course, IBM services are all about unnecessarily complex projects that are time and money sink holes. With the economy tightening up, we can only hope enough businesses see through these scams to make IBM irrelevant and out of that business.
  • by Kenja ( 541830 ) on Monday December 05, 2011 @09:55PM (#38275314)
    And ironically Kodaks business plan of sell the camera for cost and over charge for the film is alive and well in the printer/ink business.
  • Re:Next, paper. (Score:4, Insightful)

    by zdammit ( 1143747 ) on Monday December 05, 2011 @10:09PM (#38275414)

    I hear paper mail and its infrastructure is in decline too, but many slashdotters wailed about a country needing a national paper mail pushing system. But reality means cuts will further erode revenue in a negative feedback spiral. USPS is going down, hard

    Really? In my country the decline in letters has been compensated for by an increase in packages, from online sales. So the postal system is changing but not declining.

  • Content vs medium (Score:0, Insightful)

    by Anonymous Coward on Monday December 05, 2011 @10:15PM (#38275456)

    The big difference was Kodak produced the medium and not the content.
    If they were smart, they would have been buying the copyright on every photograph they could get their hands on
    and not just sold film.

  • by Anonymous Coward on Monday December 05, 2011 @10:24PM (#38275502)
    They sell one VERY big unspoken service: Blame Hedging. You know the adage, "nobody ever got fired for buying IBM", and it still means that if something goes really wrong your boss is going to chew up their sales/support reps instead of $middle_manager.
  • by jedidiah ( 1196 ) on Monday December 05, 2011 @10:34PM (#38275582) Homepage

    The ironic thing is that Kodak pretty much invented digital photography long before it was practical to implement as a consumer product. They probably had the closest thing to genuinely inventive patents. Although it would have been a tragedy if they were able to set back the industry like Apple wants to.

  • by fermion ( 181285 ) on Monday December 05, 2011 @10:40PM (#38275620) Homepage Journal
    I am not sure about the expectation that a corporation should exist forever, or that shrinkage and eventual folding is bad. Really it is this idea that a firm should be forever, and all the effort to make it happen, that creates inefficiencies in the free market.

    Kodak provided a good product, and it innovated both in the pro and consumer market. The stuff it did really brought photography to the masses, and high end photography to the pros. The cameras allowed us to take pictures. The film allowed us to accurately reproduce those pictures. The technology was not trivial.

    The think is that it is simply not cost effective to do a good job printing pictures that can just be reprinted. Archival for the family is no longer an issue. So the quality that Kodak represented is no longer needed. Which means lower markup and therefore an inability to pay for the bloated management that all corporation build up over time. This is why we need firms to go under, fire all the management, and sell all the assets. It frees up managers that are good to start more efficient ventures, and allows inefficient managers to no longer be a drag on the system. With the current idea that corporations are imortal, we have manager vampires feeding off the workers and consumers without providing any real value.

    So is there a lesson here. Yes, to the inefficient manager, be ready to be thrown out into the street. Which won't happen, as there will always be banks and courts that perpetuate the efficiency of aristocratic class. Kodak can go. They represent and inefficient past. Not buggy inefficient, but perhaps heating stove inefficient.

  • Re:Photogs? (Score:2, Insightful)

    by unity100 ( 970058 ) on Tuesday December 06, 2011 @12:34AM (#38276340) Homepage Journal

    At the end of each of his five years there, he sold off just enough of the company to meet his "profit" goals, leaving the company decimated when his time was up.

    that's just stockholder capitalism. profit at whatever cost in the short run, jump to next corporation to fuck up.

  • Re:Rochester (Score:5, Insightful)

    by hairyfeet ( 841228 ) <bassbeast1968 AT gmail DOT com> on Tuesday December 06, 2011 @01:52AM (#38276704) Journal

    Ya want to know how they could have REALLY kicked some digital ass? they should have worked on a digital camera that outputs film style pictures. and they could have cleaned up! What I mean by that is the warm tones that something like Kodachrome put out. folks still like that warmth and would be happy to give up some resolution if they had a camera that could crank out digital pictures that looked like they were taken on Kodachrome. Sure you can tweak it afterwards in Photoshop, but how many people have the skills to do it?

    A camera where little Suzy the checkout girl could have all the convenience of digital with the softer warmer look of film would have frankly been a hit. Tie it in with a photoprinter that could crank the pics out and they could have backed up the money truck. But just like the *.A.A and piracy instead of adapting to the times and offering a better product they sat on their collective butts and let the world pass them by. Stupid move Kodak, really stupid.

  • by Kjella ( 173770 ) on Tuesday December 06, 2011 @03:51AM (#38277226) Homepage

    (I can take over 1000 in RAW mode on my current DSLR and the way oversized Compact Flash card I have)

    Sure, now but you're not winning any points for predicting this in 2011. I remember having a 512 MB card that could fit about 100 pictures, and for a weekend trip that was barely enough. Those before that sucked even worse. I remember thinking with a film I could at least just snap in another film and keep taking pictures, it wasn't anything like "snap as many pictures as you'd like" unless you felt like going through them on the tiny little LCD monitor on the camera. And it was very expensive. It's easy to say it afterwards but I don't think it was nearly as obvious back then. And when it was obvious, maybe they felt they were too late to the party.

  • Re:Rochester (Score:5, Insightful)

    by StopKoolaidPoliticsT ( 1010439 ) on Tuesday December 06, 2011 @06:46AM (#38277906)
    The city itself now owns Midtown Plaza, but they plan to give portions of the land away to companies in exchange for moving downtown (cannibalizing the suburbs). IIRC, one of the local mall developers had owned the property before that and was more than a million dollars behind in tax payments, but the city chose to pay them $10 million for the building. The local mall developers are also active in local government (though I don't remember if this particular one was).

    The mayor prior to this one didn't actually live in Rochester, he lives in Batavia but owns property in Rochester. During the development of one of the sports stadiums built during his term, he directed the stadium to be built on property he owned even though it wasn't the best overall fit for the stadium.

    For the most part, the local newspaper turned a blind eye to the behind the scenes shenanigans since they were very loud avocates of both projects. Not to mention the Fast Ferry, which lost $60 or $80 million over the course of 3 years. The paper also withheld publishing the fact that the city council had been told the ferry was going to fail and was a waste of money. Alas, the paper is VERY beholden to the government and its executives often serve on local community advocacy type panels, further clouding its supposed independence. The local tv and radio news personnel have been gutted over the last decade, so they don't really have the manpower to do much actual investigating themselves.

    The city government is controlled by one party and the county government by another. There's a lot of animosity between the two which trickles right down to the residents. You know the typical stereotypes... the reality of the situation doesn't matter. On top of that, the city desperately wants to merge with the county, effectively taking over the county government, so the city can bleed the county to fill the coffers that have long been drained at further expense to the suburbs. The whole thing is a giant mess, partisanship reigns supreme and all that matters is the dogma, because nothing else gets published in this area and few on either side bother hear the other side's dogma.

    You could argue that, since George Eastman's suicide, the city has suffered the exact same fate his corporation has... and for largely the same reasons. Complete and utter mismanagement based on a total misunderstanding of what is happening on the ground, no ability to realistically plan for the long term and the desire for the brass to aggrandize themselves in the short term.
  • by Sique ( 173459 ) on Tuesday December 06, 2011 @07:07AM (#38278012) Homepage

    Kodak is pretty much a north american name. In Europe, if anyone thinks about cameras, it's not really Kodak, that comes to mind.

  • by JoeMerchant ( 803320 ) on Tuesday December 06, 2011 @09:24AM (#38278722)

    Read up for how societies are affected when an industry leaves for one reason or another and is not replaced. Rochester, Detroit. These are not happy stories.

    This is not about brand names, this is about the erosion of full-time, life-time employment being replaced by temporary work at minimum wages for less then full weeks.

    And that matters.

    Arguably, the problems in Detroit and Rochester are less painful than the problems in 1940s Europe that allowed Detroit and Rochester industry to flourish for the last 60 years.

User hostile.