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Author
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Topic: Kodak to sell X-Ray film unit
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John Hawkinson
Film God
Posts: 2273
From: Cambridge, MA, USA
Registered: Feb 2002
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posted 01-10-2007 07:12 PM
Today, Kodak announced that it would sell its "Health Group" to Onex Helathcare Holdings, a subsidiary of Onex Corporation, for $2.4 billion dollars.
See Kodak's Press Release.
Notably, this unit manufactures X-ray film and related systems. In a New York Times article that will run tomorrow, Ian Austen writes:
quote:
Unlike Kodak's consumer film business, which rapidly collapsed as many photographers switched to digital cameras, X-ray film sales have declined more slowly and the unit remains profitable. The medical business, which also produces digital equipment, had revenue of $2.54 billion in the year ended Sept. 30.
A spokesman, Christopher Veronda, said Kodak decided to sell the medical-imaging operations largely because of the high cost of adapting them to all-digital technology. "The business was going to require a lot of investment," Veronda said.
This makes me wonder what it means for the Entertainment Imaging group -- if the incentive behind selling the X-ray group was problems with conversion to all-digital technology, it seems like MP film products have those problems in spades, at least insofar as Kodak doesn't seem to be at the forefront of either high-end digital cameras or digital protectors.
--jhawk
Edit: added in final URL
[ 01-11-2007, 10:48 AM: Message edited by: John Hawkinson ]
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 01-11-2007 06:03 PM
quote: John Hawkinson
This makes me wonder what it means for the Entertainment Imaging group -- if the incentive behind selling the X-ray group was problems with conversion to all-digital technology, it seems like MP film products have those problems in spades...
Not necessarily. The vast majority of medical x-ray images will only require one copy of each, viewable in a relatively small number of locations (hospitals, doctors' surgeries, etc.). As a relatively limited number of origination and viewing devices will be needed, the economies of scale involved in cutting film out of the equation may well work, here and now.
With MP imaging, however, you've got all those theatres that will need digital projectors and servers before you can take film out of the equation. Add to that the standards battles that are going on (rapidly turning into a rerun of the MPPC around this time last century, if you ask me) and the reluctance of exhibitors to abandon a technology whereby the distributor bears the up-front cost of distributing (35mm: prints expensive, projectors cheap) to one in which the exhibitor does (digital: 'prints' virtually free, projectors very expensive), and I don't think we're going to see the decline of 35mm as an exhibition format on any significant scale until these issues are resolved. Given that release printing probably accounts for the bulk of raw stock manufacture and lab services now, and I'd guess that Kodak is safe ... for a while.
But the economies of scale are going to turn sooner or later - all my comments above add up to is the belief that it's going to be later than many people think. And when they do, I think John H has a point - Kodak is the established market leader in film, but not much else. My guess is that they'll be trying hard to change that in the next few years.
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 01-12-2007 04:02 AM
OK, but to what extent are Kodak digital cameras actually Kodak technology, as in, they developed and own the patents for the CCDs, lenses, processors, software etc.? Are they assembled from outsourced technology to any significant degree? I guess that might be their long-term future in the post-film era. Other companies have done it - for example, Hollerith punch card tabulating machines have long been consigned to the Science Museum, but IBM managed to reinvent itself and is still a successful multinational. But on the other hand, other corporate giants which were built on the back of a single product range have withered and died, e.g. Edison and RCA.
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 01-12-2007 05:37 PM
Many thanks for the clarification. My post above wasn't Kodak bashing - I have no view or bias one way or the other - but very much a neutral response to John H's post, noting that Kodak is a company that has built and sustained a reputation for excellence, literally for over a century, the bedrock of which is a single technology which, all the signs suggest, is going to become obsolete as a mainstream medium within the next one to two decades.
OK, it's late in the evening and I've just won myself the 'longest, most convoluted sentence of the month' award...
Of course, Kodak was there with the Box Brownie, too, and so building on that tradition to give the next generation of technology a consumer friendly face could well be one of the ways forward. But I can't help thinking that John H has a point. I suspect that 20 years from now, film will be something that media professionals come into contact with occasionally but not very often; in 40 years, only archivists will have any first hand experience of what the stuff looks and feels like. Turning that legacy into the next generation(s) of mainstream imaging technology is what Kodak is going to need to do in order to remain a household name.
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Joel N. Weber II
Expert Film Handler
Posts: 115
From: Somerville, MA, USA
Registered: Dec 2005
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posted 01-22-2007 02:26 AM
quote: Leo Enticknap
The vast majority of medical x-ray images will only require one copy of each, viewable in a relatively small number of locations (hospitals, doctors' surgeries, etc.). As a relatively limited number of origination and viewing devices will be needed, the economies of scale involved in cutting film out of the equation may well work, here and now.
I'm kind of surprised that there hasn't been much decline in the sales of medical X-ray film; the last time I remember having an X-ray, it was digital, and the other hospitals in the Boston area where I've had X-rays have probably converted by now as well.
Bigger hospitals presumably have large volumes of patients over which to amortize the fixed costs of the digital equipment, which would be large recurring costs with film, which I suspect is how they justify the conversion.
Smaller hospitals that are large enough to have CT scanning equipment can probably share the viewing equipment between X-rays and CT scans, and CT scans have to be done with a computer anyway (although it is certainly possible to get the images printed to films).
The other factor for smaller hospitals is that digital imaging enables telecommuting; for an on-call radiologist over the weekend or night, this can mean working from home, and for an institution with multiple locations, one radiologist may be able to cover multiple sites.
And then there's finding the images for later reference. I've had better luck getting CDs of CT images than films; films seem to be easier for a hospital to lose. (Getting radiologists to look at CDs from other institutions, however, hasn't been doable, in my experience.)
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