The phrase “Kodak moment” became part of the world’s popular vocabulary. It was used to signify the importance of a moment that should be cherished forever. Yet when people now use this phrase, they might pause to think that the company exists almost in name only. Kodak is currently filing for bankruptcy protection, and 2007 was the last year in which they actually turned a profit.
Yes Kodak- a household name for many years, is no longer making any money, and may not exist at all in the future. This would have been almost unthinkable at one time, as they had a massive market share when it came to the photography equipment and consumables sector.
But the unthinkable is happening slowly but surely. A company that used to make a massive profit is now making massive losses. But what has led to their demise?
Since its founding by George Eastman in 1889, Kodak has made most of its money from cheap film sales and selling expensive cameras at a large mark-up. Kodak cameras have historically been very good, for most of the company’s life they had 90% of all film sales, and 85% of all camera sales in the US. Their bridge cameras, full sized cameras, compact cameras and disposables where all market leaders. But in the seventies, Japanese companies started to eat away at their profits.
The main contributing factor has to be the shift from film to digital. Just as the famous late-seventies song went – “video killed the radio star”, “digital killed the film manufacturer”. This was the beginning of the decline.
In 2001, Kodak attributed a sharp decline in their stocks to the September 11th attacks on New York, but whereas other companies recovered, Kodak still struggled. 2001 is also the year in which their sales of film declined significantly. With the sales of film dropping-off, it was left to their digital cameras to fight Kodak’s corner.
Yet although Kodak made very good conventional bridge cameras and other types of camera in the digital market, they have struggled to cope with the loss of the film market. Their digital cameras were still at the number one spot, in 2005 their digital camera sales accounted for 40% of the market. But the drop off in film has been enough to ensure the company has struggled. This has been further compounded by the encroachment of Japanese firms such as; Canon, Nikon, Fuji and Sony into their market share.
The final nail in the coffin though, has been the introduction of Smartphones with excellent cameras. Although these in-built cameras will never replace dedicated cameras, they are now good enough for the very casual photographer who doesn’t worry too much about picture quality.
The situation is all the more shocking because Kodak came up with a digital camera in the 1970s. For over thirty years they have known that digital would be the future, yet failed to stay ahead of the curve because they feared the development of their own digital cameras would harm their film sales. This is surely a moral against suppressing technology, and failing to move with the times. Had they embraced the technology all those years ago, they might have been able to weather the storm and come out on top.