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Even Still, Kodak Clings to Film
source: Democrat and Chronicle (NY)

Doug Pasono of Greece is an operator in the Main Control Room for film making at Kodak. Kodak expects to still have a film business in 10 years but acknowledges it will be smaller.
(ANNETTE LEIN staff photographer)

Rochester, New York--January 2009-- The Ektar 100 comes in a little yellow box, like generations of Eastman Kodak Co. camera film before it.

A fine-grain film aimed particularly at nature and travel photographers, Ektar 100 was launched in October, and batches of it are churned out regularly from Building 38 at Eastman Business Park - Kodak's sprawling manufacturing site straddling Rochester and Greece.

Little yellow boxes of camera film were long the building blocks of Kodak - which in turn was the major force in the Rochester area economy for much of the 20th century. But between 2004 and 2007, Kodak spent $2 billion in cash and took $3.3 billion in restructuring charges as it shed 27,000 jobs, demolished numerous manufacturing buildings and worked to remake itself into a digital imaging business.

Yet even as sales of Kodak's consumer and professional camera films continue their rapid spiral downward due to digital photography, the company continues to invest in new lines of films and the revamping of others. And the company remains steadfast that camera film will continue to be a part of its business, though admittedly increasingly a niche product.

"You come back in 10 years, there will be a film business here," said Joel T. Proegler, general manager of film capture and a vice president in Kodak's film, photofinishing and entertainment group. "It'll be smaller. Maybe there will be a bigger space between innovations."

Kodak's film business doesn't come cheap. The company would not say what kind of costs come with putting out a product such as the Ektar 100. But for the company's third quarter of 2008, ending Sept. 30, its film, photofinishing and entertainment group spent $11 million on research and development, as well as $93 million on operating that group. For that same three-month span, according to documents filed with the U.S. Securities and Exchange Commission, Kodak spent $583 million on the cost of goods sold, such as raw materials and production expenses.

Along with rolling out Ektar last year, Kodak revamped its Portra line of professional photography film in 2006 and its T-Max 400 professional photography film in 2007. In 2008, Kodak put out new lines of Portra 400NC and 400VC film, with a finer grain.

More than half the professional photography market still uses camera film occasionally, said Scott R. DiSabato, marketing manager for Kodak's professional film operations. "We call it the 'and' world," DiSabato said. "We know the professional use will be significant enough the next couple years, we'll get the investment (into those film lines) back."

Amy Postle, a New York City-based professional photographer, shoots both film and digital, using film about 75 percent of the time, and Kodak product exclusively.

"When I dreamt of being a photographer as a child ... it was to be a photographer, not a digital technician," she said. Photographers now "spend countless hours on the computer making the images look like they were shot on film," she said.


Meanwhile, at the Photo Marketing Association's 2008 international trade show held in early 2008 in Las Vegas, Kodak introduced one-time-use cameras loaded with its new 800-speed film. Last year it started a new business line of personalized one-time-use cameras with specialty label printing for such events as weddings. The company plans to do a larger launch of the cameras, sold in batches of 10, in 2009. The company comes out with new or revamped film products yearly, Proegler said.

All Kodak's film capture products are in decline, "but all are profitable," Proegler said. "The only problem we have is we're getting smaller."

Much of that profitability came as Kodak did its massive, four-year restructuring that largely wrapped up in 2007, taking out costs well beyond what the company needed to at the time, building in future declines in film, Proegler said.

The revamped and new film lines are aimed at helping keep the film customers the company still has, Proegler said. "We're not walking away from film," he said. By coming out with new or improved film products, "it gives people the incentive to continue to use film," he said. "If we acted like film was going away, we kind of influence it."

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