Kodak declares bankruptcy, 10 years later
ROCHESTER, N.Y. (WHTM) – January 19, 2022, marks the 10th anniversary of the day one of America’s great success stories came to an end, as the Eastman Kodak Company filed for Iowa bankruptcy .
Falls from grace tend to generate myths, and the Kodak story is no exception. The standard storyline is that Kodak crashed and burned because, in its hubris, it failed to embrace digital photography. This is usually coupled with a “ponder the irony” reminder that Kodak invented digital photography in the first place.
The truth, as usual, is more complicated. To understand, it’s best to begin at the beginning.
George Eastman became interested in-and frustrated by-photography in the 1870s. The state of the art then was “wet-plate” photography, where the photographer in a darkroom coated a glass plate with photosensitive chemicals, put the plate in a light-tight box called a plate holder, shoved the holder into a camera, pulled out a slide covering the sensitized plate, made an exposure, put the slide back in, ran the holder back to the darkroom, and developed the picture. This all had to be done before the chemicals dried and lost their sensitivity, hence “wet-plate”. The cameras were large and cumbersome; having to set up a darkroom wherever you went even more so. Eastman wanted to make taking a picture “as convenient as the pencil.”
He embarked on this path just as the dry plate was invented. Dry plates, as the name suggests, were pre-coated with chemicals that would stay sensitive-no mad dash to expose them before they dried out. Eastman started manufacturing dry plates. He then figured out how to put dry plate emulsions on paper and plastic, which could be rolled up and stuck in a camera.
In 1888 he introduced the “Kodak” camera, with the slogan “You push the button, we do the rest.” The camera cost $25 and came preloaded with a 100 shot roll of film. When you used up the roll, you mailed the camera back to the Eastman company, where for a charge of one dollar they processed and printed the film, reloaded the camera, and sent everything back to you so you could shoot off another 100 pictures. The “snapshot” had been born.
For the next nine decades the Eastman Kodak Company, as it was now known, was the dominant force in film and film processing technology. In 1912 it set up one of the first U.S. industrial research centers in Rochester, New York. Inventions poured forth; new films, new film formats, and new cameras. The company thrived on a “razor and blade” business model-they would sell you a camera for $20 (or less) and make many times that amount on film and processing-or processing chemicals, if you were the do-it-yourself type. (One of the first advances over the original Kodak was replaceable film rolls, so you could reload your camera yourself and keep shooting, while your previous roll was being processed.) An event captured on film became “a Kodak moment.”
But things started to change in the late 1960s and early 1970s. Kodak started facing competition from other film manufacturing companies, most notably Fujifilm. (For a while they were so evenly matched they were referred to as a duopoly.)
Then in 1975, a Kodak engineer named Steve Sasson invented the first digital camera. It was about the size of a breadbox and took 23 seconds to capture a 0.01 megapixel black and white image, which was saved on a cassette tape. In 1976 another Kodak engineer, Bryce Bayer, patented what became known as the Bayer filter, a grid of very small red, green, and blue light filters which, when overlaid on a monochrome image sensor, made color digital photography possible. (Bayer filters as still used today-in fact there’s probably one in your camera.) The first building blocks of the digital photography revolution were in place.
For Kodak, it was the beginning of the end, but not because, as some myths would have it, they ignored the technology. Over the next few decades, Kodak spent billions of dollars on digital imaging research and development. They came up with some pretty good digital cameras and ranked first in sales in the early 2000s.
But Kodak’s early lead in digital camera sales vanished, overtaken by competitors like Nikon, Canon, Sony, and Fuji. One problem was that Kodak’s meticulous “slow and steady” approach to research and development was ill-suited to digital imaging, where technology progressed so quickly camera designs would be obsolete before they even hit the assembly line. An even bigger problem was Kodak was still trying to make the “razor and blade” model work. A classic example-the Advantix Preview Camera. It used film, (the Advanced Photo System or APS format, which never caught on) but had an LCD viewfinder on the back to preview images. But the camera would only store one image at a time, which could not be downloaded from the camera. The reason for the LCD? So you could decide which pictures you wanted to print at a time when people were starting to forego printing, and just store (and share) their pictures on computers.
Worldwide, sales of film peaked in 2001. Then sales started to decline and cratered as digital cameras took over. So one-half of the Kodak business plan-the film, processing, and printing “blades”-collapsed. Then cell phone cameras arrived, and the market for low-end digital cameras-the “razors”-imploded.
In 2012 Kodak was forced to declare bankruptcy, and it was all over.
Except it wasn’t. A much smaller Eastman Kodak emerged from the bankruptcy ashes in 2013, now focused on chemicals and imaging for business. The Kodak website now has five categories: “Print”, “Advanced Materials and Chemicals”, “Motion Picture”, “Consumer”, and “Company”. Under Consumer you can find a lot of stuff with Kodak logos on them, mostly made under license-including their digital cameras.
If you want to find Kodak film (which is still being manufactured in Rochester), you need to go to a British site, kodakalaris.com, which ended up as co-owners of the still film part of the business as part of the bankruptcy settlement.
An unexpected turn in Kodak’s fortunes came on July 28, 2020, when the company won a $765 million government loan to establish a pharmaceutical division manufacturing ingredients for generic drugs. Another unexpected turn came on August 7, when the deal was put on hold after allegations surfaced of possible insider trading, on both the business and government side of things. The Attorney General of New York launched an investigation and got a court order requiring Kodak officials to testify. That was in June of 2021. Since then, nothing much seems to have happened, and both the original government deal and legal actions seem to be in limbo.
We’ll just have to see what develops.