There was a time when Kodak was the king of the photography world. Kodachrome film captured the Kennedy assassination and the first man on Everest. Paul Simon wrote a song about it. The phrase “Kodak moment” was so ingrained in the lexicon that it’s still around today, long after the sun has set on film photography.
Now, the Eastman Kodak Company is a shadow of its former self, having filed for bankruptcy in 2012. So what happened? How could a company over a hundred years old suddenly fall so hard?
Stuck In The Past
Kodak’s executives didn’t realize that the world around them was changing. They thought they knew who was taking photos and why.Kodak thought that the way people shared and displayed photos was with hard prints, and that digital could never match the print quality of film photography. At first, they were right — digital photos were low-quality, both in color and resolution, and no match for film.
But digital evolved, and with it, so did the way people took and shared photos. Digital cameras took over not because it offered a better print photo experience, but because people didn’t want prints any more at all.
It was not so long ago that photography was the purview only of dedicated, serious photographers. With self-contained film cartridges like those that Kodak provided, photography became easy — something anyone who wanted to capture a moment could access.
Digital took that to the next step, making cameras just another gadget. They were cheap to obtain, easy to use, and sold in electronics stores alongside other shiny toys. Suddenly Kodak was playing catch-up — they weren’t the rulers of their territory anymore, because the territory had moved.
Knowing your target market is as important as knowing your product. When cameras became a futuristic, high-tech toy, the photography market shifted.
Kodak had excelled at marketing to the main customers of film cameras — women. Women were the family archivists, taking sentimental photos at holidays and birthdays to print, put in albums, and reminisce over later.
When digital took over, the market shifted heavily toward men as primary customers. Men didn’t care about preserving their photos for posterity — they liked to show them off on cameras, computers, and phones.
Photos became transient, and Kodak didn’t adapt. They tried to bring photography back to what it had been before — emotional and timeless — but that train had already left without them.
Clinging To Old Business Models
Once Kodak started to smell trouble, they decided to join the modern era of photography. But they couldn’t commit.
Film carried with it enormous margins — almost 70% — and Kodak didn’t want to let go of that for the razor-thin margins of consumer electronics. So they stuck to film, trying to prolong the technology’s life through smaller cameras and film-digital hybrids like Photo CD.
They also leaned heavily into the photo printer industry, refusing to let go of the high margins of consumable paper and ink. Kodak’s printers were never very good at photo-quality prints, but that wasn’t the problem — the problem was that people didn’t care about prints at all.
What Can We Learn?
Every brand worries that they’ll be the next Kodak or Blockbuster or RadioShack — on top of the world one day, then suddenly obsolete. Kodak followed a template that we’ve seen more than once when new technology threatens an old incumbent.
First, they ignored the technology, hoping it was a flash in the pan that would go away by itself and not wanting to dump resources into a fleeting trend. Then they tried to fight it, telling customers how much more expensive, how much slower, and how complicated digital cameras were. Finally, they tried to drag out the existing tech by integrating it into the new — ask Sony how MiniDisc fared to see how that usually goes.
In short, Kodak needed to recognize that the newer generation — the ones familiar with evolving technology and unburdened by hangups about revenue streams and unpredictability — should be taking over.
Kodak wasn’t the only one facing the challenges of an evolving market — Canon and Nikon took it in stride, and are now head-to-head as digital photography juggernauts. Kodak’s mistake was more fundamental. They focused on the product, not the user, and it spelled their end.