Magazine Article


Eastman Kodak Shuts Down Qualex Photofinishing Division

According to Kodak, the processing service will: remove dark shadows, reveal richer detail, add more vibrant and accurate color to pictures, and improve sharpness and contrast.

Perfect Touch processing also delivered to the customer index prints, sleeved negatives and backprinting of the date the processing was done.

When Perfect Touch was introduced, the service was first offered by Qualex labs and then by retailers and labs who used Kodak's DLS software with their equipment.

Kruchten said Perfect Touch would continue to be offered by Kodak Gallery as well as via the Kodak kiosks for digital printing. But once Qualex shuts its doors for good, Perfect Touch processing for film will no longer be offered.

Service Calls

Qualex had three main lines of business: its Central Lab Operations (CLO), Event Imaging Solution (EIS), and Kodak Service and Support (KSS).

With Kodak Service and Support transferred out of Qualex's responsibilities and the impending closure of the remaining labs, Qualex will only be responsible for its Event Imaging Solution business (theme parks, malls, etc.).

As was reported by Jerry Lansky in the January 2008 On-Site article, the lack of growth to the service operation is due to the fact that many of the retail chain customers are either adding or replacing their wet labs with dry lab equipment.

Kodak caught the timing just right in the 1990's as it established itself as the only national operation capable of providing the mass/drug/grocery segments with the means of breaking into the burgeoning on-site processing business. It offered equipment, financing, consumables, service, training and more. These accounts were new to the business and gratefully accepted having their hands held by a leader, such as Kodak, as it walked through the maze. Besides, Kodak was already handling the overnight business via Qualex for these same accounts as well as selling them film. An easy fit.

At one time Noritsu was the sole lab maker that Kodak would sell its customers.

Later Kodak chose to add Kis Photo-Me labs to the offerings it would suggest its customers install.

Gretag was a beneficiary of the very successful Kodak on site picture plan. Kodak was Gretag's only U.S. customer, and a fine one at that, as there might have been 12-15,000 Gretag labs plugged in by Qualex technicians. But Gretag ran into serious service and supply problems, falling into bankruptcy in December, 2002.

Back in 2003, when Gretag filed for bankruptcy, Eastman Kodak had purchased a large inventory of Gretag parts from that company, to be able to service those installed labs. Although Qualex was responsible for the service, the parts had been bought by Kodak and will continue to be utilized by Kodak's Service and Support operation. Kruchten reiterated that there will be, "no impact on service."

Lansky noted in his January 2008 On-Site article: "Every minilab brand is serviced and parts are still manufactured or remanufactured, especially for the defunct Gretag-brand machines--of which there are still about 5,000 in the field."

Kruchten noted that during the summer of 2008, the company transitioned all of the service and support personnel from Qualex to Kodak. Kodak's support group is also responsible for scanners and the Kodak Nexpress digital presses.

On-Site Now In Control

As the December 16, 2008 Kodak press release noted, Kodak has seen the trend towards in-store and home printing options and is focusing its initiatives in those areas.

One of those initiatives is the Kodak Adaptive Picture Exchange (APEX) dry digital lab system­ that needs no wet chemicals or water to make prints. The APEX systems, along with the 95,000 Kodak picture kiosks presently installed worldwide, and Kodak Gallery online photo service will provide consumers with their digital printing needs. Kruchten noted that for consumers who use film, many of the retail locations offer on-site, one-hour processing service.

In addition to the store-based solutions, Kodak is also focusing on the home printing customer. Kodak's line of home inkjet printers tout the ability to print more lab quality photo prints, cheaper, saving consumers on average $110 on ink per year.

According to Photo Marketing Association (PMA) research, over the past 10 years, on-site has gained ground each year in the percentage of total rolls processed, as wholesale photofinishing lost its stronghold. In 1998, PMA research shows on-site photofinishing at 38% while wholesale, at the time held 62% of the total rolls processed. By 2003, on-site was up to 53% and wholesale down to 47% of total rolls. The research further shows, in 2008 wholesale photofinishing is at its lowest at 18% of total rolls processed while on-site is at its highest point at 82%.

"Kodak is committed to this space. We're here to respond to what consumers want and what consumers preferences are, and in this case they've spoken. They want online, home, and instore printing," said Kruchten. He explained that the decision to close the last three Qualex labs is a response to this trend by its customers.

"The desire for the immediacy of the print is a stronghold we don't see changing," he explained.

Just as digital changed the game for film, so has on-site photofinishing finally taken over the majority of film processing.

Everyone we spoke to seems to be suggesting the smart independent lab owner may do well to contact those mass/drug/grocery stores in his neighborhood who were using Qualex for photofinishing.

Considering that Wegmans, the first grocery chain to enter the photofinishing game just threw in the towel, and got out of photofinishing late in 2008, the photo specialist may well have the opportunity to pick up even more of the much needed photo printing and gifting that consumers are creating with their digital images.

[Ed. note: Excerpts of a number of Jerry Lansky's On-Site articles from prior issues of PTN have been reproduced here, in the context of this article.]