What Happened with Kodak? It’s Not a Great Moment

This one really stings. As I’m based in Rochester, New York, having to file a blurb about Kodak under History and not Tech is devastating. Once a household name throughout the world, today’s version of the company is not exactly on the cutting edge. What happened with Kodak? Here’s a quick biography.

 

The Birth

George Eastman, founder of the Eastman Kodak Company (better known as just Kodak), was born in Waterville, New York, on July 12, 1854. At the age of five, he moved to Rochester with his family, ultimately becoming enamored with the then cumbersome process of photography. Funded in part by a gentleman named Henry Strong, Eastman pioneered a series of advancements that would eventually make photography highly accessible to all.

In 1888, he registered the trademark Kodak (he apparently just liked the sound of it) and released the first Kodak camera, which, of course, used the recently patented roll film that had been licensed to him. In 1892, the company was renamed the Eastman Kodak Company, with Henry Strong serving as the first president. The outlook was bright.

 

The Good Times

Throughout much of the 20th century, times were good for Kodak and the city it called home. Though the company sold cameras, its largest margins came from film and the materials needed to develop film, like chemicals, paper, etc. Many other business lines were part of the picture, but film (for both still photography and cinema) clearly paid the bills.

By 1930, the company had been added to the Dow Jones Industrial Average, a stock market index consisting of 30 prominent American companies.

In the 1970s, Kodak accounted for 90 percent of film sales and 85 percent of camera sales in the US. By the next decade, Kodak had approximately 60,000 employees in Rochester and 145,000 employees worldwide. Annual revenue peaked in the 1990s in the $16 billion range.

During his lifetime, Eastman was known for his generosity to his employees and their families as well as a variety of philanthropic endeavors. Beneficiaries of the latter included the University of Rochester, MIT, Hampton University, and the Tuskegee Institute. (Eastman, suffering from chronic back pain, died on March 14, 1932 as a result of a self-inflicted gunshot wound. A suicide note read: To my friends – My work is done – Why wait? His mansion in Rochester is now the world’s oldest photography museum.)

 

The Slow Bleed

Although a Kodak engineer named Steve Sasson actually developed the first self-contained digital camera in 1975, the company’s embrace of digital strategies was a bit sluggish. Perhaps more importantly, there was a misread regarding exactly how disruptive such technologies would be, resulting in a failure to stay ahead of the curve.

By the 1990s, decreased sales of films were becoming a reality. The situation was only exacerbated by competition from the Japanese competitor Fujifilm. While Kodak did successfully push its digital cameras, this avenue would prove short-lived due to the later rise of smartphone-based cameras. And investment in digital printing would become less relevant as online photo storage and sharing became the norm.

In 2004, the slow bleed resulted in Kodak being delisted from the Dow Jones Industrial Average after 74 consecutive years in the index. And what started as a slow bleed eventually became a frank hemorrhage, reaching a critical point in January 2012 when the company filed for Chapter 11 bankruptcy protection. About 20 months later, after exiting certain businesses and selling off a variety of patents to a consortium of bidders that included tech giants like Apple, Google, Facebook, and Amazon, Kodak emerged from bankruptcy.

 

Post-Bankruptcy

In current times, Kodak’s business involves activities like packaging, functional printing, and professional services. Film is still in the mix, and some income is generated by allowing small companies to use its massive infrastructure. Forays into the world of cellphones, tablets, and digital currency have not been particularly successful. The company did receive some press in 2020 after being considered for a federal loan to help use its chemical expertise to make ingredients for generic drugs.

The number of employees worldwide has dipped to around 4,500, and that number in Rochester is probably under 2,000. Annual revenue is in the $1 billion range.

The company now serves as one of the go-to case studies for why companies fail. And just to rub a little salt in the wounds, several former Kodak spin-offs such as Eastman Chemical, Carestream Health (a subsidiary of Onex Corporation), and a clinical diagnostics division now part of Ortho Clinical Diagnostics are in seemingly solid shape.

 

So what happened with Kodak? The bottom line is that a Kodak moment, once commonly used to describe a sentimental moment worthy of a photograph, should probably be called something else. Or mean something else.