Tuesday, December 31, 2013

Not a Kodak Moment - Demise of an Industrial Empire

Kodak boxes for mounted medium-format 6x6 cm transparencies (as per Rolleiflex or Hasselblad use).
Dear readers, those of you who were photographers before 2005 or so remember Eastman Kodak Company, the industrial Goliath that dominated the photographic world during the film era. The name "Kodak" and the yellow box color were ubiquitous symbols of American industrial might throughout the world. You could see the Kodak logo on shop signs and film packages everywhere, from the local WalMart to a mom and pop store in San Jose, Costa Rica, to a kiosk in Athens, Greece. Everyone knew that Kodak's products were high-quality and reliable. The "Kodak Moment" symbolized how easy it was to capture a moment in your life and share the moment with friends and family.

But in the early 2000s, Kodak faltered. Digital cameras using charge-coupled devices (CCD) began to appear at a price suitable for general consumers. Kodak's well-funded research laboratories invented much of the technology for digital imaging, and their professional-oriented digital cameras were based on Nikon bodies. But they never successfully made the transition to digital imaging and kept hoping that film sales would persist. In January of 2012, the company filed for Chapter 11 Bankruptcy protection. People were shocked - how could this possibly happen? How could management have so totally fouled up an astonishing legacy?

There had been plenty of warnings. In 2011, a Forbes Magazine contributor wrote about How Success Killed Eastman Kodak. On January 4, 2012, the Wall Street Journal wrote:
Was it a failure of imagination? Was it entrenched convictions and provincial thinking? Was it one restructuring too far?   
For Kodak—perhaps the iconic American brand of the 20th century—it was all those things.
In an age when global competition has radically altered business overnight, when companies have had to be fleet of foot, Eastman Kodak was the unblinking deer in the headlights. Wednesday, the extent of the roadkill became fully apparent, with the news that Kodak is readying its papers for Chapter 11.
This company failed long ago. Kodak, based in Rochester, N.Y., claims to have invented digital photography but ceded that market to competitors such as Nikon, Sony and Canon. It hung onto its identity, film, and watched it fade before its eyes.
Then there were the restructurings, one after another, a thrashing-about that found Kodak selling unrelated products and finally pitching headlong into the savagely competitive printer business. It got savaged.
An analysis in Forbes underlined the real issue:
Answer: The organization overflowed with complacency. I saw it, maybe in the late 1980s. Kodak was failing to keep up even before the digital revolution when Fuji started doing a better job with the old technology, the roll-film business. With the complacency so rock-solid, and no one at the top even devoting their priorities toward turning that problem into a huge urgency around a huge opportunity, of course they went nowhere. Of course strategy sessions with the BIG CEO went nowhere. Of course all the people buried in the hierarchy who saw the oncoming problems and had ideas for solutions made no progress. Their bosses and peers ignored them.
I recommend this article from the ieee usa's today's engineer, titled, "The Kodak Moment is Dead; Long Live the Kodak Moment" for a short summary of George Eastman's pioneering brilliance in popularizing the photographic process for the ordinary consumer and then how the great Kodak corporation missed the conversion to the digital era.

Let us take a short walk through photographic history and see some examples of how Kodak affected us all. Here are some professional examples.
Atlantic City, New Jersey, March, 1920.  From U.S. Coast and Geodetic Survey
This is a  photograph of Atlantic City, New Jersey, part of a pioneering aerial photographic survey of the coast of New Jersey, performed by pilots from the Army Air Corps for the U.S. Coast and Geodetic Survey in March of 1920. Aerial photography had proven its worth during World War I, and the early-1920s were a period of great experimentation in the new and exciting form of remote sensing. Many people had never seen their homes from an aerial view, and had no idea how they fit in relation to surrounding neighborhoods and topographic features. Kodak was a pioneer in high-resolution roll film and lenses for aerial photographic surveying. This frame was scanned from a paper print in the archives of the U.S. Army Corps of Engineers' Beach Erosion Board, now at the Coastal and Hydraulics Laboratory in Vicksburg, Mississippi.

According to the metadata:
From the Annual Report of the Director, U.S. Coast & Geodetic Survey June 30, 1920 (p. 88): "In March 1920, the Army Air Service photographed the coast line of New Jersey from Cape May to Seabright. A single flight was made, using the k-1 camera. The plane flew at an altitude of 10,000 feet, and under very good air conditions. The camera was mounted in gimbals, with a lead weight at its lowest point to assist in maintaining the optical axis of the camera in a vertical position. Level bubbles were placed on the camera to aid in keeping the camera in the proper position. The photographs are being used to revise the charts of the coast of New Jersey. The individual photographs are 18 x 24 cm. in size, and the approximate scale is 1:10000. The photographs are mounted in strip mosaics, for convenience sake, not over 4 feet in length. The length is generally determined by the position of control points. This composite photograph is compared with the topographic sheet of the same area and control points identified. The scale of the photographic mosaic is determined, and by means of pantograph the data are reduced to the scale of the chart and transferred from the photographs to tracing paper."
"The photographing of the 120 miles of coast line took less than 2 hours time in the airplane. The development of the films and printing took 2 days’ time of one man. Two rolls of film were used, a total of 183 photographs. The work of interpreting the photographs, assembling mosaics, comparison with topographic sheets, and reduction to the scale of the chart of the outside shore line required 15 days office work by one engineer."
Hurricane damage, Atlantic City, New Jersey, Sep. 15, 1944.  From Beach Erosion Board archives, U.S. Army Corps of Engineers.
Damage of the boardwalk at Atlantic City, New Jersey, Sep. 15, 1944.  From Beach Erosion Board archives, U.S. Army Corps of Engineers.
Aerial photography also was invaluable to document storm damage along the coasts. The 1944 hurricane caused significant damage along the Jersey shore, Long Island, and Rhode Island. This was during World War II, and Kodak was manufacturing an astounding amount of aerial film for the Allied military forces to use in the war effort.
Kodak also made film for "miniature" cameras, meaning 24×36mm frames on 20 and 36-exposure rolls. This is a photograph my father took of the Daughters of the American Revolution's Memorial Continental Hall, on 16th Street in Washington, DC, in 1939. The film was nitrate-based, but is still stable. He used a Perfex Camera, made by the Candid Camera Corporation of Chicago, Illinois (at that time, he could not afford a Leica).
Time Magazine cover, November 2, 1953.
By 1945, the war was over. America prospered. The Great Depression had ended with the war, Americans were working, the Middle Class was growing as never before, and everyone was taking photographs. Time Magazine prepared this cover for its November 2, 1953 cover, Vol LXII, No. 18. A Kodak yellow box (probably Kodachrome) is supporting a Leica IIIC rangefinder camera, with eyeballs in the finder windows.
Book describing use of the German-made Retina camera.
Kodak never succeeded in matching the superb Leica and Zeiss Contax rangefinder cameras. But Kodak's better cameras also came from Germany and were equipped with Carl Zeiss lenses.

In the 1940s and 1950s, GAF, Ansco, Dupont, and 3M competed with their own films, but Kodak continued to dominate the market. Overseas, Agfa, Ilford, Adox rebuilt from the war and offered excellent black and white emulsions. But for personal use, Kodachrome was Kodak's crowning achievement in color photography. Kodachrome slides had brilliant color (maybe not "natural," but vivid). The early Kodachrome was only ISO 10 speed, and later 12, but photographers managed. I laugh when fanboys on camera forums complain that brand xx digital camera "only" works up to ISO 6400 or so. Obviously they never practiced real photography with film.

On a  personal note, early family photographs were almost surely taken on Kodak film and printed on Kodak paper. We would not have had access to German or French products then.
Revere Beach, Massachusetts, approx. 1911.  Photographer unknown.  Scanned from a paper print.
The family in an open touring car, approx. 1915?  Scanned from a paper print.
My father also used Kodak film in the post-war era.
At the Parthenon, Athens, Greece, approx. 1953. Kodachrome transparency.
Harbor of Genoa, approx. 1954. Kodachrome transparency.
An early trip to Italy with Leica in  hand. He used his Leica 3C camera with 50mm f/2 Summitar lens, exactly like the model in the Time cover. Some photographers said Leica tailored the color response of their post-war lenses to Kodachrome, although I doubt you could verify this. I still use that Summitar lens.
Ctesiphon, Iraq, 1957.  Kodachrome film.
This is a Kodachrome of the ancient ruins at Ctesiphon, Iraq, taken by my father during a work assignment in Baghdad. Our family never moved to Iraq because of a coup or revolution - a familiar story in that part of the world.
Shwedagon Pagoda, Rangoon, Burma, 1957 or 1958.
Bangkok, Thailand, 1957
Kodachrome followed us to Asia.  Processing Kodachrome was a challenge. In the 1950s, Kodachrome came with a mailer that represented the cost of developing and mounting in cardboard mounts. Because of the complex and precise chemical nature of the process, the laboratories were in the United States, France, and England. International mail service was often undependable, so my father would give the exposed rolls to a coworker or friend who was returning to the USA. He would send the films to Kodak and collect the developed rolls. Then he or another American on the way back to Greece or Asia would bring us the films. Turn-around time: about 4 or 6 months. It was a treat to see what we had photographed so long before. There was no instant gratification back then.
Vendor on a beach, somewhere in Attica, Greece, 1963
Waiting at Ellinikon International Airport, Athens, Greece, 1964.
Black and white film recorded other family moments. Notice how much data is still in these frames. Will digital files last that long?
New York harbor, 1967
This is a frame from New York in December of 1967. It was scanned from Kodacolor 100 film, badly faded but effectively recovered via Photohsop. Many of these early color emulsions have faded badly, but at least the image data are still present.
The railroad cut from Belmont Street, Vicksburg, Mississippi,  2002. 4x5" Tri-X film.
Tri-X sheet film, commonly 4x5" or 8x10", was a standard for landscape photographers for decades. Many fine art photographers used it exclusively, developing it in Kodak's HC110 developer. Both sizes are still sold.
Residence room, St. Francis Convent, Vicksburg, Mississippi, 2003.  Kodachrome 25 film.
This is a 2003 photograph from one of the residence rooms in the StFrancis Xavier Convent and Academy, in Vicksburg (now the Southern Cultural Heritage Foundation). The room was dark and I used a tripod to support a Leica M3 with 35 mm f/2 Summicron-RF lens. Kodachrome 25 was not a usual media for this type of scene, but the unique palette and extra fine grain worked well for architecture.
Shotgun shacks, Vicksburg, Mississipi.  Ektar 25 film, Rolleiflex 3.5F camera.
I thought Ektar 25 color negative film was one of Kodak's amazing products. With good lenses, the detail was astonishing. It was contrasty, but perfect for overcast days. This view of shotgun shacks was taken with a Rolleiflex 3.5F camera with 5-element Planar lens.
Camel in Üçhisar, central Cappadocia, Turkey, taken with a compact Kodak LS743 digital camera.
Kodak's early consumer-oriented digital cameras were decent. The jpeg compression was too great, but all manufacturers were experimenting in those days. I am not sure why Kodak could not compete with the other electronics companies.
Kodachrome 25 packages, last production before discontinuation
I used Kodachrome 25 until the last processing in 2010. To its credit, Kodak supported processing of Kodachrome for 65 years. The 25 required slow and methodical work, but the color palette and fine grain suited me, and Leica lenses brought out its best characteristics. For decades, National Geographic magazine's photographers used Kodachrome almost exclusively.
1950s and 1960s Kodak film cans
Kodak's 35 mm film was packaged in these high quality cans. In the 1950s, the cans were steel, with different color paint inside versus outside. The lids had a rubber gasket to keep the film dry and fresh until use. This was top-quality packaging. Later, the cans became aluminum, and finally plastic around 1975. People found innumerable other uses for these little cans.
Super-8 Tri-X film packages.
Kodak also made many emulsions in movie formats. Home movies were largely replaced by video recording in the early 1980s. Unlike still photography, the quality of each movie frame was low and video was more than suitable for most casual home use. But if you are a film-maker, you can still buy Kodak color negative and black and white films in Super-8, 16mm, 35mm and 65mm sizes. Amazing.

Some of Kodak's great new ideas were so poorly conceived, you wonder what corporate talking mouth approved them. The Instamatic camera and film system of the 1960s was a great success, with millions and millions sold. Then they tried 110 - a smaller format film that produced mediocre optical results unless you used top-quality lenses. Then they introduced the disk, with an even smaller size film. Consumers were even less impressed. And finally, there was APS (Advanced Photo System but really the Amateur Photo System), which had a smaller film size then traditional 35mm but no obvious benefit in equipment size. Do major corporations develop boneheads in-house? Ken Rockwell has a scathing article on the APS fiasco. As Mr. Rockwell wrote, "APS gave crummier results, cost more to buy the film, and there were fewer places to get it developed. Who cared? No one did, so it died on the vine." Oddly, APS lives on as the size of the smaller sensors in digital cameras (now you know where the name comes from).

The good news for still photographers: you can still buy excellent black and white film from Kodak, Fujifilm, and Adox. Adox is the world's oldest film company, in production since 1860. Some of the emulsions are derivatives of the classic Dupont thin-emulsion films from the 1940s and 1950s. For many years, they were produced in Yugoslavia/Croatia by Fotokemika via a complicated set of transfers and licenses, but Fotokemika ceased production in late 2012. The Adox web page will provide information.

I still occasionally use 4x5" Tri-X in a wood Tachihara view camera and 120-size Panatomic-X film in a Fuji GW690II rangefinder camera. The Panatomic-X is 25 years expired but has been frozen and is just fine. I develop it in Agfa Rodinal developer. Those of you who have never used film: buy a used camera and go analog - that will be the most educational thing you can do to improve your photography. You can't call yourself a photographer if you have never used film.

This was written on December 31, 2013.  Happy New Year to all readers, and thank you for reading!

Update Dec. 2014
During a recent trip to Rangoon, I decided to use Tri-X to match the old-fashioned ambiance of the setting. I exposed it in my 1962-vintage Leica M2 and developed the rolls in Kodak HC110 developer. The current Tri-X is finer-grain than before, but it still retains the classic Tri-X look. A coworker even thought these were vintage photographs until I showed her that they were only a month old.

My advice once again: Buy and use film!
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Appendix A.
Excerpts from a Kodak article in Forbes Magazine, September 7, 1998. 
(Added Feb. 6, 2014)

Eastman Kodak Co. Chief Executive George Fisher, 57, leans back in his chair, relaxed. Kodak has just announced its second-quarter earnings, which far exceeded analysts expectations.  Wall Street responded by picking up the stock 17% in just three days, to over $86.  Earnings per share rose 43%, to $2.20.  Though the 1998 showing is impressive, it comes as a bounce-back from terrible 1997, when earnings went from $3.82 a share in 1996 to only one penny a share after charges for all of 1997.

Is it for real this time?  Few big companies have disappointed investors more in recent years than this Rochester, N.Y.-based $15 billion (revenues) photographic giant. His biggest move was simplicity itself.  Almost afraid to compete in its basic business-photography-pre-Fisher Kodak had diversified all over the place--into pharmaceuticals, office equipment, batteries.  Fisher told employees that images, not aspirin, were their business, and that long-feared digital imaging was an ally-not an enemy.  He pointed to the huge potential of emerging markets like China and India... Out went such businesses as Sterling Drug, clinical diagnostics and household products, like Lysol.

The Kodak company Fisher took over was very much in the hold of the older U. S. blue chips: it was heavily integrated, preferring to make as many components of its products as possible.  Fisher is slowly changing the mold, mainly through joint ventures:  with Intel, to produce sensor chips for digital cameras; another with AOL, to send processed photos to customers and digital form over the Internet.

Kodak has introduced digital cameras ranging in price from the below $1000 to $15,000, as well as a host of consumer and professional films in the last year. Fisher says Kodak has improved cycle time in some product areas tenfold in the past four years.

To improve coordination at top, Fisher created the chief operating officer. Joining him is Daniel Carp, president and chief operating officer.  Carl Kohrt and Eric Steenberg serve as assistant chief operating officers. Kohrt is responsible for the Asia-Pacific region-particularly China, where Kodak has scored big against its Japanese rival Fuji.

With almost 11,000 jobs still slated for elimination and, according to Steenburgh, plenty of costs still to cut, you can look to Kodak to continue to improve profit margins rather than build revenues for the immediate future...

Maybe Fisher wasn't the miracle man everyone expected him to be.  Though it took longer than people thought it would, he's definitely turned the super tanker around.

(Well, no, he did not turn the super-tanker around.)

UPDATE Jan. 2016: The Online Photographer blog had an interesting description of a visit to the treasure vaults at the George Eastman House. The author described how Kodak was a pioneer in digital technology and had predicted the fall in film sales, but was unable to make money on digital hardware. 

8 comments:

  1. I graduated college in 2005 and haven't been in a dark room since but I miss it. Reading this makes me long for wet trays and running water. I still have a few rolls from college I really should shoot just to see what it would look like.

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  2. Thanks for your comment. I still occasionally use 4x5" Tri-X and 120-size Panatomic-X film. Great stuff! It is refreshing to go back to analog photography occasionally.

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  3. Are you sure the photo you said taken in Istanbul in 1952 on board was really taken in Istanbul? It does not look like Istanbul.

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    1. You may be right. The slide mount was not labeled. The location may be one of the Princes' Islands or one of the ferry stops along the Bosporus.

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  4. Thank you for the reply. We have been discussing the exact location on a Facebook forum of which members are very knowledgeable about Istanbul and transportation. They can spot a street in a photo taken 100 years ago but no one was able to spot that location. :) https://www.facebook.com/photo.php?fbid=10151980519022758&set=gm.267257923427866&type=1&theater

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  5. Mr Kodachromeguy, may I have a bigger version of that photo? The one taken on board? We still discuss the possibilities. :)

    lektem@gmail.com

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  6. Mystery solved, I think, The photograph may have been taken in the harbor of Rhodes in 1954. I have corrected the caption. Thank you for being such a diligent detective.

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  7. I thank you for your help Mr Kodachrome Guy! It was an inspiring quest. :)

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