From today’s Wall Street Journal:
Eastman Kodak Co. is preparing for a Chapter 11 bankruptcy-protection filing in the coming weeks should efforts to sell a trove of digital patents fall through, people familiar with the matter said.
The struggling photography icon, which employs about 19,000 people, is in discussions with potential lenders for around $1 billion in so-called debtor-in possession financing that would keep it afloat during bankruptcy proceedings, the people said. A filing could occur as soon as this month or early February, one of the people said.
A Kodak spokesman said the company “does not comment on market rumor or speculation.”
Should Kodak seek Chapter 11 protection from creditors, the company would then try to sell its portfolio of 1,100 patents through a court-supervised bankruptcy auction, the people said. Kodak would continue to pay its bills and operate normally while under bankruptcy protection, the people said.
It’s a crime that Kodak is nearly bankrupt. They were there at the beginning of the digital revolution and should have thrived. (Remember the photo CD system from 1990?) It doesn’t take a big stretch of the imagination that Kodak – with top notch management – could have been Xerox, Sony, Canon, Samsung, or – with exceptional management – even Apple. Now instead the company will be broken up in pieces.
Some investment firm will probably buy Kodak’s digital properties. Some Chinese company will probably buy Kodak’s film and paper business. Somehow, somewhere, Kodak Portra and Ektar film will continue to be made – for a while. But it’s probably going to get more rare and expensive.
A note on film: Kodak’s bread and butter film business has largely been supported by the motion picture industry, which – until very, very recently – still shot almost everything on film. It is the continuous improvement in this film which eventually transferred over to still photography film like Portra and Ektar. Unfortunately for film users, while it’s taken a decade longer to get there than still photography, digitally-shot cinema is finally here. Cinematographers who have the freedom to shoot with any medium are beginning to choose digital. Case in point: The Girl With The Dragon Tattoo, The Social Network, Margin Call, The Lincoln Lawyer, The Book of Eli, Angels and Demons, Pirates of the Carribean, and The Hobbit were all shot on digital. It’s unlikely that any company that buys Kodak’s film business will continue to put any more into R&D. What’s become a niche product (film) now becomes a micro-niche product.
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I think Chapter 11 is a winning formula for Kodak. They should've done it earlier. Once Kodak gets rid of unprofitable printing business, and renegotiate all the deals, they have a potential to become profitable again (since film products are lucrative) but not at the size of the company it is. Kodak once had more R&D than the rest of the film industry combined until 1980s, but because of poor management, the company wasn't making necessary effort to catch up with changing market. Fujifilm, who had much smaller R&D until 80s, is now doing very well. I also think that Kodak will hold on to the film product division... they are the only part that has potential to generate good cash flow. (January 05, 2012 | 05:22pm)
It is a shame, but with all of these new cinematography cameras being used such as the Red Epic and Arri Alexa, film is being used less and less. (January 06, 2012 | 03:09pm)
Kodak should have spent more time investing in digital technologies earlier on. It's unfortunate, but when you follow conservative buisness practices, this is the risk. I was on the cutting room floor of the very first National Geographi Channel episode. They admit they dropped the ball 20 years ago when their biggest competitor, the Discovery Channel, started. Nat Geo had a difficult time investing in new media, and they are now a fledgling company compared to Discovery. Just goes to show you without risk, comes no reward. (January 07, 2012 | 06:49pm)
I think most of the epitaphs for Kodak are completely wrong. Kodak never had a chance competing against Canon, Nikon, Sony, Samsung and so forth. Even during the film days, they always targeted the lowest end with Instamatics and, eventually, disposable film cameras. There was never a future for Kodak in digital photography. The possible future for Kodak might have been -- to leave the photography business. It's funny how nobody says that Kodak "could have been like Fujifilm," which now derives only 10% of their income from photograph, including film, processing, paper, and all of Fuji's digital cameras. The answer to the digital age was -- get out of the photography business. Kodak's mistake was that they tried to make a transition to digital photography. (January 09, 2012 | 06:59pm)
What a shame! I wonder what major companies who rely on Kodak for paper will transition to? Those big box portrait chains owned by CPI Corp (Sears Portrait Studio, PictureMe, Kiddie Kandids, etc.) use Kodak paper at their processing plants. Even worse, I'll probably never worry about investing in a film camera now. With film prices on the rise - again - it just makes more sense to invest in my digital equipment. (January 11, 2012 | 07:09pm)