So Kodak’s increasingly desperate fight to stave off calamity has ended in the ignominy of the 132-year-old company and its US subsidiaries filing for Chapter 11 status to seek refuge from creditors. The relentless march from silver halide film to digital pixels has taken its toll on what for much of the 20th century was one of America’s greatest companies.
The immediate reason for the move is to make it easier to 'monetise non-strategic intellectual property', according to the company. This means selling its clutch of valuable digital imaging patents but also potentially handing large sums of money to lawyers to sue those whom Kodak accuses of infringing its IP.
This might all get very complicated, however, because Kodak’s creditors will be scrambling to pocket some of the proceeds from those IP sales too, which could mean buyers getting cold feet at the prospect of lengthy litigation procedures. It’s one unholy mess.
It’s an ignominious end for Eastman Kodak, not least because the company was the game-changing Ford or Google of its time. Established way back in 1880, it was known for its innovative technology and daring marketing. It brought photography to the masses. 'You press the button, we do the rest,' went the legendary Box Brownie ad of 1888.
Almost a century later in 1976, Kodak accounted for 90% of film and 85% of camera sales in the United States. As late at the tail end of the 20th century, it regularly made it into lists of the five most valuable brands in the world.
So what went wrong? Kodak’s party was spoiled by the rise of digital photography, which supplanted film at an astonishing pace. A particular irony given that it was a Kodak engineer who invented the first digital camera. But for all its illustrious history, the firm proved unable to adapt to world of digital imaging in which the rise of camera phones has made even cameras themselves practically obsolete.
In 1996 Kodak’s revenues peaked at $16bn. Profits were $2.5bn in 1999. But the fall from grace was looming – in 2011, it is thought Kodak turned over a mere $6.2bn and before the balloon went up it reported a third-quarter loss of $222m, the ninth quarterly loss in three years. Twenty-five years ago, Kodak employed over 145,000 workers worldwide; now that figure is down by 90%. Its share price has fallen by nearly 90% in the past year.
For weeks, rumours have swirled around the company town – Rochester in upstate New York – that unless the firm quickly sells its portfolio of intellectual property, it might go bust. Rumours that seem to have been justified by the Chapter 11 announcement, although it is possible that a much reduced and streamlined Kodak might emerge from the process to live and fight on. But the glory days which made its founder George Eastman one of America’s richest men are likely gone forever.