Eastman Kodak (Kodak) is closely associated with film and photography and held a dominant position in the film market for most of the 20th century. Today, Kodak provides functional printing, graphic communications, packaging and professional services to global organizations. Its two main business segments are: Digital Printing & Enterprise and Graphics and Entertainment & Commercial Films.
While they did supply Hollywood with the raw material of moviemaking, their business model depended on selling cheap cameras and expensive film to the public. Until the 1990s, Kodak was regularly rated one of the world’s five most valuable brands. By 1976, Kodak accounted for 90% of film and 85% of camera sales in the United States.
In the late 1990s, Kodak began to struggle because of sluggish sales of photographic film and its reluctance to transition to digital photography. In fact, Kodak developed digital photography in 1975, but because of the profitability of physical film, they did not bring it to market—when, indeed, it could have disrupted the market in a major and potentially profitable way.
The advent of the smartphone—with built-in cameras—replaced the standalone camera for most consumers. Kodak’s revenues peaked at nearly $16 billion in 1996, by 2011 they were down to $6.2 billion—and faced Chapter 11 bankruptcy in January 2012. In 2013, the company was able to emerge from bankruptcy with court-approved financing. As a result of this process, Kodak sold a portion of its patents for $525,000,000 to Apple, Google, Facebook, Amazon, Microsoft, Samsung, Adobe Systems and HTC.
While out of bankruptcy, Kodak is no longer the powerhouse it once was. 2023 gross profits were around $210 million. Kodak currently has 4000 employees (2024)—a severe drop from the 145,000 workers that were employed worldwide in 1988—and noticeably fewer than the 14,000 that were employed pre-bankruptcy in 2012.
Kodak invented the technology that destroyed its business. It had become complacent and unwilling to take the risk to create new products, move into new markets, and explore new technologies. In retrospect, Kodak had the capacity to ideate and to come up with good ideas and to bring them to the prototype stage—as they did with the digital camera. What Kodak lacked were innovation leaders who could read and interpret signals. Kodak leadership was blind to the smartphone revolution and social media trends. Kodak did not possess the internal innovation leaders who could support and promote innovative ideas not just to the public but also throughout the organization. Kodak missed many opportunities—but arguably their biggest misstep was not to see the promise and potential of digital photography.
Kodak now operates largely business-to-business, and while it is surviving, it is not thriving as well as it had for most of the 20th century.
© BLG
