Photo greats shutter under weight of the Digital Age
Great brand names become part of your everyday world. There's a little extra pain in seeing them fall on bad times.
The two greatest names in U.S. photography figured in sad developments last week. Kodak will cut up to 4,500 employees worldwide, 18 percent of its work force. Polaroid agreed to sell its entire business for a measly (by today's standards) $42 million.
Eastman Kodak Co. — to give it the full name, which honors its founding inventor and the potent product name he brainstormed — also suffered losses, plunging sales and a price drop to under $5 a share Thursday, 75 percent down from its 12-month high. More shocking yet was a fact reported by the company's hometown newspaper in Rochester, N.Y. Eastman Kodak has been shedding jobs year after year for a quarter-century.
And why• Just a revolution, that's all.
Everybody used to shoot pictures with film rolled up in the camera. Now immortalizing the kids on Grandma's lap is all digital — instant and amazing. Kodak makes the magical new cameras, too, but the impact on photo paper, developing and industrial sales has been as devastating as sunlight in a darkroom.
Polaroid Corp.'s inventor-founder Edwin Land outdid Kodak's George Eastman (but only after two generations) by developing images inside the camera. Television talk show host Jack Paar in the 1950s snapped guests with his Polaroid. No mechanical whiz himself — to prove anybody could do it — he'd tear off a length of exposed film, give it a minute to clear and show an "instant" photograph. The wonder made a great growth stock in its day.
But the literal instant of digital photography clearly whipped Polaroid's figurative "instant," although the company sells other optical and printing products.
The late Dr. Land's enterprise went through bankruptcy twice in the past four years. It has lost $200 million since 2005. The most recent owner was indicted for fraud. Now, the company is to be sold to a Luxembourg-based private equity firm, Genii Capital SA, but other offers might still be considered until mid-March in Bankruptcy Court in Minneapolis. Mary Jeffries, chief executive officer, said, "Polaroid is going to emerge a sustainable business."
Over at Kokak, CEO Antonio M. Perez called the second half of 2008 "one of the most challenging periods we have seen in decades," Rochester's signature company ended 2008 with 24,400 employees, including 8,500 in the hometown area, where bachelor Eastman lived and where his mansion is now a museum.
He extended photography to the masses with rolls of film and a simple black box that he called a "Kodak." The word may have sounded to him like a shutter snapping. It became a branding inspiration like Henry Ford's Model T or H.J. Heinz's 57.
Kodak announced what many companies should emulate. No bonuses for executives this year, salaries virtually frozen and no executive pay increases in 2009. A clearer profit picture is definitely needed.