What Can Be Learned From Kodak’s Camera Failure
Kodak was known as the giant that revolutionized the photography industry. Their revenue was $11 billion yearly. Within 8 years after hitting 11 Billion they were down to $812 million, they were forced to file for bankruptcy in 2012. So, what had happened to once known one of the most powerful companies in the world.
It can be said that from the very start, Kodak was a pioneer in the industry. They introduced innovative products for photographers and filmmakers for well over a century. In 1878, George Eastman, the founder of Kodak got world’s attention with his gelatin dry plates. By 1903 Kodak introduced their Non-Curling Film, which became the standard for all amateur photographers, for almost three decades. Then Kodak revolutionized the motion pictures industry with the first microfilm ever on the market with their 16 mm KODACOLOR Film. Kodak kept up with technology by introducing its first motion picture film. Many would save their earning, just so that one day, they could afford Kodak. By 1976, Kodak had 85% market share in cameras and 90% share in films.
In the early 80’s Sony released their first electronic camera. Digital photography, although it was in its embryonic stages, this technology was showing signs that would replace film. Kodak had the money and the sales figures on their side, they were hitting 3 billion annually. Digital cameras were becoming popular, and many at Kodak did see the transformation coming.
An electrical engineer at Kodak, Steven Sasson invented a digital camera in 1975 which was patented by Kodak. But it is said that this transformation was happening in the background, as Kodak kept dominating the industry with their films. To put this in perspective, when Steven proposed his idea of going digital, executives at Kodak reportedly told him:
“that’s cute — but don’t tell anyone about it”
It took Kodak 3 years to file a patent for Steven’s camera. Kodak was bouncing back and forth with Film and digital and by 1984, people switched to Fuji as they were 20% cheaper. Kodak kept up with the film business model and chose to use digital to improve the quality of the film by introducing the Advantix Preview camera. They spend a good $500 million from this technology. The Advantix Preview used film and emphasized print because Kodak was in the film business. Kodak soon knew that this was not their best product. Keeping up with films they completely missed the rise of digital technologies.
People would much rather share pictures than, print them. However it still was not too late, Kodak purchased a photo-sharing site, Ofoto in 2001, they could have kept it for what they purchased it for, sharing website. But their love of films was strong. They tried to get people to print digital images using the platform. Despite all their best efforts, Kodak was in trouble by 2008. They introduced a digital product but Sony, Canon and Nikon were way ahead of Kodak by now. By 2012, they had no option but to file for bankruptcy, leaving its legacy business and selling off all its patents. Remember Ofoto? that was sold to Shutterfly as part of its bankruptcy for less than $25 million.
Kodak missed out on the opportunity on digital landscape, a technology that they were pretty much in the frontline of. In some ways, they failed to recognize the power of digital and kept investing in films. They failed in realizing that online photo sharing was the new business, not just a way to expand the printing business.