Why did Kodak go bankrupt?
At one time, Kodak was practically a monopolist in the photographic film market. Moreover, it can be said that the entire photo market was CREATED by the company's founder George Eastman. The size and influence of Kodak on the world can be compared to Apple today: a huge corporation, hundreds of thousands of employees, sales and service points in almost every city on the planet. And this corporation prospered throughout the ENTIRE 20th century. But in 2012, the company went bankrupt. Why? How can a world leader fall into the abyss in a few years? The answer is in this video, and more details are on our channel.
HISTORY OF KODAK
Part 1 - • Фотоаппарат Kodak [Часть 1/3] | История ко...
Part 2 - • История компании Kodak [Часть 2/3]: фотоап...
Part 3 - • История компании Kodak [Часть 3/3]: фотока...
Kodak's business model throughout the 20th century was very simple: sell cheap cameras to ordinary people at cost or even at a loss, and make money on film and printing photos. If you don't remember, then all over the world in shopping centers or just on the street there were such points where you could leave the film and pick up an envelope with photos a day later. Of course, Kodak sold a lot of related products, but what they never did was professional advanced cameras.
But in 1975, Steve Sasson created the first digital camera in Kodak laboratories. The architecture of the device is generally similar to modern digital cameras: the matrix received light through optics, converted the signal into digital and recorded it on a storage medium - an audio cassette. Recording 1 photo took 23 seconds, and the resolution was 0.01 megapixels. It would seem that it is necessary to develop a promising idea, invest money. And Kodak had a lot of money. But the company's management closes the project, because there is no film in the digital camera. And film is the MOST IMPORTANT source of profit for Kodak. In addition, sales are growing EVERY YEAR. What figure, what are you talking about?
However, the idea of digital photography is in the air and competitors are not sleeping. Already in 1981, Sony introduced its first digital camera. It is wildly expensive, inconvenient and does not do much. But it will go down in HISTORY as the FIRST digital camera, Sony Mavica. And after 1985, the race begins, all companies that seriously work with conventional cameras present their digital cameras for the commercial market. Sony, Fuji, Hitachi, Canon achieve the greatest success. In general, the Japanese companies intercepted the initiative. In the early 1990s, everyone who could showed their cameras. Kodak also shows its developments, but the company's management still does not believe that digital is the near future and Kodak remains on the periphery of the market.
Thanks to the scale effect, digital camera components are getting much cheaper. Already in 1997, a digital camera costs 300-500 dollars and you are not ashamed to look at its photos (this Cyber Shot was the first digital camera that I held in my hands and it was a shock). Just in 1994-97, the Internet is growing, and by 1999 it is in every advanced home and office. And the main advantage of digital cameras is amazing speed: take a photo and in a minute it is in the mail of a friend on the other side of the planet. And in 2000, prices drop even more, for 100-200 dollars you can buy a simple digital camera, which greatly simplifies the work. At the same time, a milestone in quality is reached: an ordinary person looking at two photos does NOT understand which one was taken on film and which on digital.
Film sales decline in 2005 by 20%, then by 10-20% per year. By 2008, it is already obvious to everyone that just in just 10 years the market for photographic film and analog cameras has practically died. More precisely, it did not die, but decreased almost 10 times.
The film market for cinematography, which is also important for Kodak, switched to digital more slowly, but 2004 was indicative: several major film directors shot their films on digital at once. And they were happy.
Suddenly in 2007, when the market was falling, when everything had already become obvious, the Kodak management woke up. They began to close factories everywhere, sell off unprofitable assets and invest a lot of money in the development and marketing of digital cameras. However, after 3 years of hard struggle, they were able to capture only a little more than 5% of the world market.
In 2010, there was a series of mass layoffs, the stock fell through the baseboard, and in 2012, Kodak declared bankruptcy.
Today, Kodak exists. But it is a pale shadow compared to the powerful corporation that they were throughout the 20th century.
00:00 - Introduction
00:57 - Brief history of the company
01:30 - Kodak business model
02:20 - The emergence of the digital camera 1975
03:24 - The beginning of competition in the digital camera market
04:14 - Cameras are getting cheaper 1995-1999
04:58 - Prices fell even more...