Kodak and the Writing on the Wall (Craig Douglass On Consumers)

Craig Douglass

I guess you could call it a Kodak moment. On Tuesday, Sept. 3, Eastman Kodak Co., long the most recognized brand name in photography, emerged from bankruptcy. Because of photography pioneer George Eastman, the 1880 origins of Eastman Kodak strove, as Eastman said, “to make the camera as easy as the pencil.” He succeeded, with the help of a burgeoning advertising industry, and trademarked in 1888 the brand name Kodak, a name he simply made up. The rest is consumer-products history.

Bloomberg News reported Kodak followed a plan to become much smaller — eliminating 47,000 employees since 2003 — and restructure the company. Businesses sold or spun off during the bankruptcy included digital and photographic film patents, photo kiosks, online photo-sharing, consumer printing and document scanners.

You know the story, of course. Because cameras are now digital, and most photos taken today are snapped with smartphones, film is passé. Consumer choice directed the evolution from film to digital by shunning the use of film and all of the machinations that went with it, including negatives, development, cumbersome storage, etc. Digital is simple, instant gratification. And I do mean instant. Seen a Polaroid lately?

The irony of the story is digital technology was developed in an Eastman Kodak applied research lab. From its discovery, the first digital camera appeared in 1974. And although Kodak developed the technology and invested billions of dollars in digital imaging, its business model failed to recognize and transition the foundation of the company into a brand that could claim the creation of a whole new category of imaging. Although Kodak knew it was in the memory-making business — promoting advertising slogans including “America’s Storyteller,” “The Times of Your Life” and “Open Me First” — they failed to understand how consumers ultimately wanted those memories to be captured, shared and stored. Kodak simply could not, or would not, adapt.

We suppose you could all too simplistically say this is an example of a company’s product selection and marketing program following company direction rather than consumer direction. After all, consumers make the decisions on what wins and loses in the marketplace. Where was the research? Or, if there were market research — and we can’t imagine a lack of it — why wasn’t it followed? Seems to us that simple focus group research could have clearly pointed the way for an iconic brand name so identified with capturing life’s images and personal memories. We don’t know all the facts, but do know the results. What a shame.

Chroniclers of the company’s demise suggest top executives long viewed their own discovery of digital technology as potentially cannibalizing their profitable film manufacturing business. (Ya’ think?) In fact, when Kodak engineers first presented the new discovery to corporate executives, they called it “filmless photography.” The presentation was underwhelming and, as reports suggest, company leadership chose to ignore the potential and game-changing nature of a new digital world. One vice president who left the company in 1993 because he couldn’t persuade leadership to manufacture and market the digital camera said, “We developed the world’s first consumer digital camera but could not get the approval to launch or sell it because of fear of the effects on the film market.”

Kodak knew what digital would do to film. It would kill it. If they knew, they obviously should have adopted the new technology as their future platform, because they really weren’t in the film business; they were in the image business.

Today the legacy Kodak brand will be limited to print technology for corporate customers, including smartphone components for touch-screen sensors, commercial printing presses for document printing and product packaging.

If only Paul Simon’s opening lyrics in the 1973 hit “Kodachrome” had been heeded, “When I think back on all the crap I learned in high school, it’s a wonder I can think at all. And though my lack of education hasn’t hurt me none, I can read the writing on the wall …” The writing on the wall. It’s what consumers write everyday.

Craig Douglass is a Little Rock advertising agency owner and marketing and research consultant. He is president of Craig Douglass Communications Inc.