Kodak, Going, Going, Still Here

On July 12th 2014, we celebrated the 160th anniversary of George Eastman (July 12, 1854 – March 14, 1932) birth. A lot has changed in 160 years. March 31st was the 90th anniversary of Eastman appearing on the cover of Time magazine. Last April Kodak announced its plans to emerge from Capter 11 Bankruptcy. The last two big items on Eastman Kodak Co.’s bankruptcy to-do list were to settle a shortfall of nearly $3 billion in its United Kingdom pension plan and sell a pair of businesses. Kodak planned to sell those businesses to the pension fund. Kodak had worked out a deal with its U.K. pension plan that would see the pension plan buy Kodak’s Document Imaging and Personalized Imaging operations. Kodak would receive $650 million and the pension plan, in turn, would write off roughly $2.8 billion in claims.

Now we have had a string of feel-good stories for fans of motion picture film. Quentin Tarantino converted the New Beverly revival house in Los Angeles to a 35mm-only screening venue. Christopher Nolan’s Interstellar became the latest title to get a 15-perf IMAX release, and theaters showing IMAX, 70mm or 35mm film prints were allowed to premiere it two days before digital-only venues. Most importantly, a small group of directors, including Tarantino and Nolan, were said to have convinced several studios to make purchasing commitments that would keep Kodak manufacturing film stock in the years to come.

But in October news broke that Kodak was set to eliminate 85 jobs, including 70 at its headquarters in Rochester, NY, where motion-picture film manufacturing takes place. According to at least one source Kodak’s film production is running about 90 percent below plan for the year, so the company has produced only about 10 percent of the film stock that it had budgeted for in 2014. What about that campaign to keep Kodak’s film production lines running for several years, reportedly underwritten by purchase commitments from Warner Bros, Universal, Paramount, Disney, and The Weinstein Company? Its value has probably been exaggerated, apparently only Disney has signed such an agreement. Since the contracts are still being finalized, suggesting progress is still being made on those studio deals.

Things Have Changed for Kodak

George Eastman was a poor high school dropout, who was judged “not especially gifted.” As a young man, he took it upon himself to support his widowed mother and two sisters, one of whom was severely handicapped. He began his business career as a 14-year old office boy in an insurance company and followed that with work as a clerk in a local bank.
His ability to overcome financial adversity, his gift for organization and management, and his lively and inventive mind made him a successful entrepreneur by his mid-twenties, and enabled him to direct his Eastman Kodak Company to the forefront of American industry.

George Eastman was born on July 12, 1854. When Eastman was 24, he made plans for a vacation to Santo Domingo. When a co-worker suggested he make a record of the trip, Eastman bought a photographic outfit with all the paraphernalia of the wet plate days.
The camera was as big as a microwave oven and needed a heavy tripod. And he carried a tent so that he could spread photographic emulsion on glass plates before exposing them, and develop the exposed plates before they dried out. There were chemicals, glass tanks, a heavy plate holder, and a jug of water. The complete outfit “was a pack-horse load,” as he described it. Learning how to use it to take pictures cost $5. Eastman did not make the Santo Domingo trip. But he did become completely absorbed in photography and sought to simplify the complicated process.

He read in British magazines that photographers were making their own gelatin emulsions. Plates coated with this emulsion remained sensitive after they were dry and could be exposed at leisure. Using a formula taken from one of these British journals, Eastman began making gelatin emulsions. He worked at the bank during the day and experimented at home in his mother’s kitchen at night. His mother said that some nights Eastman was so tired he couldn’t undress, but slept on a blanket on the floor beside the kitchen stove.
After three years of photographic experiments, Eastman had a formula that worked. By 1880, he had not only invented a dry plate formula, but had patented a machine for preparing large numbers of the plates. He quickly recognized the possibilities of making dry plates for sale to other photographers.

In April 1880, Eastman leased the third floor of a building on State Street in Rochester, and began to manufacture dry plates for sale. One of his first purchases was a second-hand engine priced at $125. “I really needed only a one horse-power,” he later recalled. “This was a two horse-power, but I thought perhaps business would grow up to it. It was worth a chance, so I took it.” As his young company grew, it faced total collapse at least once when dry plates in the hands of dealers went bad. Eastman recalled them and replaced them with a good product. “Making good on those plates took our last dollar,” he said. “But what we had left was more important — reputation.” He later said: “When we started out with our scheme of film photography, we expected that everybody who used glass plates would take up films. But we found that the number which did so was relatively small. In order to make a large business we would have to reach the general public.”

Eastman donated more than $100 million to various schools and medical causes. In his final two years, George Eastman was in intense pain, due to a degenerative spinal disorder. On March 14, 1932 at age 77, Eastman died by suicide with a single gunshot to the heart. He left a note which read. “My work is done. Why wait?”

Kodak’s Secret Nuclear Reactor

The Kodak Eastman Co. had a small nuclear research reactor in a little-known underground lab at its Rochester, N.Y., facility. Locked down and under tight security, it also contained 3½ pounds of highly enriched uranium (can you say nuclear bomb?) The imaging company used the reactor to check chemicals and other materials for impurities, as well as for neutron radiography testing, the newspaper reported. The reactor, acquired by the company in 1974, was about the size of a refrigerator and kept in a 14 by 24 foot cement-lined cavity dug below a basement of one of its research buildings.

The company reassures, this device presented no radiation risk to the public or employees and radiation from the operation was not detectable outside of the facility. Kodak didn’t necessarily mean to keep the reactor a secret; it was just never truly public knowledge. Although it had been mentioned in research papers, the company never made a public announcement about it. And he wasn’t sure the company ever notified local police, fire or hazardous materials officials that it possessed the reactor. The uranium is no longer at the facility; it has been shipped to a federal facility in South Carolina.

Kodak Scholarship Funds

Kodak may have gone through Bankruptcy procedures yet they still had some funds set aside for student scholarships. KODAK Student Scholarship Program was started around 2011, with the addition of a Student Cinematography Scholarship Award, in addition to a Student Scholarship Award. Each award included a cash tuition prize along with KODAK Film Product grants to assist recipients with future projects. Participating worldwide colleges and universities that offer a degree or diploma program in film, film production, or cinematography may nominate up to two students each year for consideration for the KODAK Student Scholarship Award and one cinematography student each year for consideration for the KODAK Student Cinematography Scholarship Award.

For 2013 John Bailey, ASC, a renowned cinematographer known for his artistic contributions to cinema, spearheaded a panel of judges for the Kodak student scholarship program. This international competition acknowledges student filmmakers who demonstrate exemplary filmmaking skills and creativity at the undergraduate and graduate levels.

Kodak, in collaboration with the University Film & Video Foundation (UFVF), holds this annual scholarship to encourage students pursuing a career in film-making. As part of the competition, the judges will review sample reels, as well as evaluate the students’ faculty recommendations and academic achievements.

Since 1991, Kodak has been supporting future filmmakers and encouraging excellence in the field of motion picture education. The company’s ongoing efforts include a range of opportunities that students and educators can use to enrich their knowledge of the art and craft of filmmaking, including educational materials and discounts, in addition to sponsorship of film festivals, awards, seminars and student showcases that raise awareness about emerging talent. For more information, visit http://www.kodak.com/go/education.

Kodak Timeline

In 1880 George Eastman was granted a patent on his emulsion-coating machine. He began commercial manufacture of dry plates in a rented loft in Rochester, N.Y.
In 1881, Eastman and Henry Strong form a partnership called Eastman Dry Plate Company.
In 1888, Kodak put the first simple camera into the hands of the consumer selling for $25. and making a cumbersome and complicated process easy and accessible. It quickly became a household name by marketing film under the slogan, “You press the button, we do the rest.” Kodak thrived using this strategy, selling cameras for low prices and making its money on the film. Eastman reached his goal of making photography “as convenient as the pencil,” but after Eastman was gone something happened and I think that pencil has broken off several times.
1889 – The Eastman Company was formed, taking over the assets of the Eastman Dry Plate Company, renamed the Eastman Kodak Company in 1892.
1896 – Kodak gets into the X-ray business a year after x-rays are discovered.
1900 – Kodak cameras launched the Brownie with a $1 price tag.
1901 – 1905 – The No. 2 Stereo Kodak Camera was manufactured. Resembling the Kodak Bulls-eye camera the No. 2 Stereo camera features twin rapid rectilinear lens and a modified form of the Eastman shutter. Loaded with a No. 2 Kodak film Cartridge capable of taking up to six standard sized images 3 1/2 x 6 inches. It could also be used as a single lens camera by placing a blind over one lens. Additional features included three stops, brilliant finder, spirit level, and tripod socket. Outside size measures 4 3/4 x 6 x 8 1/8 inches and weighs 2 lbs, 3 ozs. Originally priced at $15.00.
1908 – Kodak produces the first film using cellulose acetate base instead of the highly flammable cellulose nitrate. Employees number over 5,000 world-wide.
1917 – Kodak develops aerial cameras and trains photographers for the U.S. Signal Coprs during World War I.
1917 – 1925 – The Stereo Kodak, model 1 Folding Camera was manufactured. Fitted with two Kodak Anastigmat f/7.7-f/45 lens and a special stereo ball bearing shutter. Capable of producing two exposures sized 3 1/8 x 3 1/8 inches on Kodak number 101 roll film. Originally priced at $53.00. This model underwent changes during its production years.
1920 – Tennessee Eastman Company begins manufacturing wood alcohol for film base. Later Tennessee Eastman would manufacture textiles and plastics.
1923 – Kodak introduced their 16mm Cine-Kodak camera and projector, tripod and screen at a price of $335.
1929 – Kodak introduces its first motion picture film designed for making motion pictures with sound. Kodak now employees more than 20,000 people around the world.
March 14, 1932 at age 77, Eastman died by suicide with a single gunshot to the heart. He left a note which read. “My work is done. Why wait?” The same year the first 8mm amateur motion-picture film, cameras and projectors are introduced.
1935 – Kodachrome film is introduced and becomes the first commercially successful amateur color film.
1947 – Distillation Products Industries, a Kodak subsidiary that came out of a joint research program with General Mills, begins producing vitamin A; DPI discontinued vitamin A production in 1973.
1953 – Subsidiary Eastman Chemical Products is formed to market products made by Tennesee Eastman and Texas Eastman.
1953 – Kodak introduced a stereo slide mounting service, which it operated until the late 1980s.
Summer 1954 – Kodak introduced its Kodaslide stereo viewer.
Late 1954 – Kodak finally introduced its easy to use stereo camera priced at $84.50 (about half of the price of the Stereo Realist) as the public’s fascination with stereo imaging was fading, it was produced until 1959.
1959 – Kodak shareholders pass the 100,000 mark.
1962 – The company’s U.S. sales exceed $1 billion for the first time; Koadak film records John Glenn’s space orbit.
1963 – The Kodak Instamatic camera launched. More than 50 million were produced by 1970.
1965 – Kodak employees numbered 88,400 worldwide, 55,500 in the U.S. a 9% increase.
1969 – Three Kodak films went to the moon: Ektachrome EF film SO168, Ektachrome MS film SO368 35mm film used in a specially built the stereo moon camera and Panatomic-X recording film, which was specially developed for use on the moon.
1969 – Kodak created a stereo close-up camera for Apollo 11. About seven months prior to the Apollo 11 landing NASA commissioned a new camera, a 35mm camera for creating stereo photos. The purpose of this camera was to take close-up photos of the soil and rocks. It was to be used to determine what the lunar rocks were made of? How craters were formed, by meteors, volcanic action or a combination and where the moon came from?
A few of the camera features: Able to withstand temperature fluctuations of +/- 250 degrees, Collapse for easy storage, easy buttons for “fat fingers” (the astronauts gloves,) Built in flash, Removable film cassette (because the camera was to be left on the moon) and of course keep it simple to use. Resulting photos were 2 side-by-side 3 inch photos, the actual exposed film was 1 inch square. The camera was just a pinch bigger than a cigar box with a long handle. An astronaut could pick it up and set it down with out bending over. The handle was also used as the trigger for taking the picture because of limited amount of dexterity of their hands with the gloves on. In the foreground of the picture below is the stereo camera.
1974 – A small nuclear research reactor containing 3½ pounds of highly enriched uranium was installed in a little-known underground lab at its Rochester, N.Y., facility.
1975 – Kodak controlled about 90 percent of the film market and 85 percent of camera sales in the United States. But Kodak’s phenomenal success in film would also be its undoing, making its managers complacent and slow to adapt to change. When Fuji began eating away at Kodak’s film business in the 1970s, Kodak executives ignored internal warnings because “they didn’t believe the American public would buy another film.” The downward spiral began.
1975 – The company launched its first copier.
December 1975 – Steven J. Sasson, a Kodak electrical engineer, demonstrates the first digital camera to fellow Kodak employees, the prototype was about the size of a toaster, took .01 megapixel black and white photos.
1976 – Kodak expands its line of copiers and microfilm products.
1980 – Kodak celebrates its 100th anniversary and enters the clinical market with a machine that does blood analysis.
1981 – Sales company wide pass the $10 billion mark.
Aug. 24, 1981 – Sony introduces a consumer video camera in Tokyo. A spokesman for Kodak tells The New York Times that film images would remain the dominant form of photography.
Feb. 3, 1982 – Kodak introduces new cameras that replace roll film with cartridges that incorporate a rotating wheel. The lowest price model, the Disc 4000, sells for $67.95.
1983 – Fuji submits a winning bid of $5 million for film sponsor rights to the 1984 Olympic Games in Los Angeles, raising the Japanese film company’s profile as it challenges Kodak.
Jan. 4, 1984 – Kodak enters the consumer market for video cameras with Kodavision.
1986 – Kodak establishes its Eastern Pharmaceuticals Division, eventually selling all its non-imaging health-related business in 1994.
July 1986 – Fuji begins selling a disposable camera in Japan.
Feb. 19, 1987 – Kodak announces its first disposable camera, the Fling, on the same day that Fuji announces it will sell its disposable camera in the United States.
Jan. 22, 1988 – Kodak agrees to acquire Sterling Drug, a pharmaceutical company, for about $5.1 billion, as part of a diversification strategy.
Feb. 1, 1988 – Kodak suspends production of disk cameras.
1988 – Kodak employs 145,000 people worldwide.
June 1, 1990 – Kay R. Whitmore, Kodak’s president, succeeds Colby H. Chandler as chief executive. Mr. Whitmore’s tenure lasts just three years. In one incident Whitmore fell asleep during a meeting with Microsoft’s founder, Bill Gates.
May 28, 1991 – Kodak takes its first steps into digital photography, offering a conversion system that can turn a conventional Nikon into a digital camera. The system sells for about $20,000.
Oct. 27, 1993 – George M. C. Fisher, the chairman of Motorola Inc., is named Kodak’s chairman, president and chief executive, a sign that Kodak will shift its focus to new technologies.
Dec. 21, 1993 – Kodak sells its chemical operations (founded in 1920) to Fisher Scientific.
1994 – Kodak sells off its non-imaging medical divisions.
1997 – Kodak announced Kodak Picture Network, which lets people upload and share photos online.
May 19, 1998 – Kodak announces a partnership with America Online called You’ve Got Pictures, an online service based on digitized film images.
March 17, 1999 – Kodak announces that it will sell most of its copier business to Heidelberger Druckmaschinen.
Jan. 1, 2000 – Daniel A. Carp, Kodak’s president, replaces George M. C. Fisher as chief executive. Mr. Fisher had pursued a “digitization strategy,” using digital technology to enhance, not replace, conventional film.
2001 – Kodak expands its line of digital cameras, launching Easyshare digital cameras and docking systems. Kodak also partners with Maytag to sell disposable cameras and film in vending machines. Mr. Carp becomes chairman.
Sept. 25, 2003 – Kodak announces that it will concentrate on building its digital business, acknowledging that film-based photography will become a smaller part of its business.
2004 – Announced it will stop selling reloadable film-based consumer cameras in the U.S., Canada and Europe, because of poor sales and profits.
2005 – Kodak has 55,000 self-service kiosks in retail stores, for customers to print digital photos. The company also invests heavily in home photo printing. Antonio M. Perez, Kodak’s president, becomes chief executive, he joined Kodak in 2003 as president and COO following a 25 year career at H-P. In 2006 he is appointed chairman.
2006 – Kodak was one of the top three digital camera makers in the world.
February 2007 – Kodak enters the inkjet printer market, aiming to undercut competitors on the price of ink, part of a strategy Mr. Perez created to bring the company into the digital age. The least expensive model, the EasyShare 5100, sells for $150. Kodak employs had about 30,000 workers worldwide, but the company finishes a painful four-year restructuring plan that slashes its workforce to 27,000 from a high of 64,000 as numerous plants are closed.
June 22, 2009 – Kodak announces that it will discontinue the manufacture of Kodachrome film.
January 14, 2010 – Kodak files two patent lawsuits against Apple, Inc.
December 10, 2010 – Kodak files a patent lawsuit against Shutterfly, Inc. In March 2012 it will sell Kodak Gallery Services to Shutterfly.
December 2010 – Kodak employs 18,800 people worldwide (down from a high of over 88,000.)
2010 – Kodak posts a loss of $675 million, its fifth straight unprofitable year. Kodak begins selling its Prosper Press, a digital commercial printer.
2011 – Kodak stock plunges to under $1, leaving Kodak with a market value under $500 million.
Sept. 30, 2011 – Kodak hires the law firm Jones Day, which has a prominent restructuring practice, to provide advice.
October 17, 2011 – 131 year old Eastman Kodak Co. licensed a portion of its patents to big-screen movie specialist Imax Corp., in a deal that will provide it with some extra cash while it works to complete a large patent sale that is crucial to its turnaround.
2012 – Kodal files chapert 11 bankruptcy protection.
February 9, 2012 – Eastman Kodak announces it will shutter its camera business, it will stop supplying digital cameras and pocket video cameras and focus its consumer business on photo printing.
February 15, 2012 – Bankruptcy courts approves removal of Kodak name from the Hollywood theater that hosts the Oscars, the Academy had begun searching for a new home, but will remain in the Dolby Theatre.
March 1, 2012 – Kodak discontinues manufacturing all slide films.
March 2, 2012 – Kodak sold online Kodak Gallery services business to Shutterfly for $23.4 million. Shutterfly closed it down.
December 19, 2012 – Kodak sold $525M patents. The transaction is one of the key measures in Kodak’s restructuring as the company emerges from Chapter 11 bankruptcy.
2013 – Eastman Kodak sold Film Divisions, which includes “traditional photographic paper and still camera film products” as well as 105,000 photo-printing kiosks and the document-scanning branch. The sale will also loop in Kodak’s event imaging venture, which provides souvenir photos at theme parks and other venues.

Comments

  1. Steve Hines says:

    Helo Lawrence,

    I hope you’re doing well. I just came across your write up “Kodak, Going, Going, Still Here”. It’s well written but sad to read about it’s problems. It seems that I left when it was at its peak.

    You might be interested in one of my projects done while at the Kodak Research Laboratories, http://www.HinesLab.com/shirt-pocket-movie-camera

    On my home page, you’ll find a section on 3-D products. http://www.HinesLab.com

    Regards,

    Steve Hines

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