Kodak, the camera company founded more than 130 years ago, which once sold more than 90% of all the film used in the US, filed for bankruptcy protection this week, emphasising the danger of staying complacent in the fast-paced digital world.
In 1889 Kodak was the innovator that created the world’s first “rolled” camera film. Founder George Eastman built the company on the now well-versed strategy of selling cheap cameras but marketing the consumables at premium prices – as many brands have followed with products like razor blades and air freshener refills – leading to substantial profit margins.
Years passed in which its ubiquitous yellow and red boxes dominated the camera stands at chemists and photography stores alike as demand for capturing the perfect “Kodak moment” soared the globe.
While many commentators have said that Kodak’s subsequent road to failure was because it was then too slow to get into digital, many people forget that the company invented the first digital camera in 1975. The problem for Kodak was not that it was slow to enter the digital world; Kodak’s failure was that it was too slow to embrace it.
Kodak was indeed the first to invent the digital camera, but up until recently, those devices were out of reach to the ordinary consumer. As its rivals developed cheaper parts and made the category available to the mass market, Kodak was reeling, still stuck in a world of film and premium pricing.
Since the turn of the century, Kodak has been playing catch-up. It built a digital camera business, but even this was not ready for the pace of change and specifically the advent of the camera phone generation, which meant anyone could point, click and share photos at minimal cost or effort.
Kodak’s century-old business model was long overdue a dramatic revamp but its executives were stubbornly incapable of making the transition into the digital age, worried that focusing on its digital unit would cannabalise sales in its profitable film business.
Even when Kodak realised the power of print was declining and moved headlong into digital, its marketing strategy failed to follow.
The Kodak brand stands for its legacy in film and its achievements of the past. For consumers, it is the old grandmother of a brand we look back on fondly, rather than a high-flying young upstart destined for exciting things to come.
In recent years Kodak brought on board chief bloggers and social media experts to try to get consumers engaged with the brand in a 21st century fashion. But ask any consumer about their “Kodak Moments” and you’re likely to hear tales of disposable cameras, the recording of the first Moon landings, waiting three weeks for the Bognor holidays snaps to be developed and trying to wind up fiddly film reels in darkened rooms. “Kodak”, as an ideology, represents bygones, not the future.
Countless brands have managed to turnaround their business models with success when faced with the challenges of an evolving marketplace. Take IBM, which foresaw the decline in PC sales ahead of time and opted instead to focus on business software, or General Motors, which this week bounced back from bankruptcy in 2009 to regain the position of the world’s biggest automaker, thanks to a renewed focus on technology and emerging markets (and a US government bailout).
As Kodak changed category to shift away from pulped trees to screens, it also needed to change its approach. Instead Kodak decided to try to shoehorn digital into its long-standing film-based strategy. The result was like attempting to ram a 6×4” into a USB socket.
Sadly, Kodak’s moment in the frame may be no more.