posted 02-09-2007 08:18 AM                    

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Kodak may pull down the shutters on film business
James Doran in New York

Kodak is considering hiving off its traditional photographic film arm and selling or spinning off the business it created more than a century ago.

The business, which has long been in decline, could raise as much as $1.5 billion (£664 million), according to Wall Street analysts.

Antonio Perez, the chief executive of Kodak, who came in three years ago to turn around the ailing company, believes that the traditional film business has just a decade of growth ahead of it.

To get out of traditional film would be a watershed for Kodak, the company that invented the consumer camera and pioneered the modern film industry. The business has been in decline for years as the photographic industries have been overtaken by the digital revolution.

Mr Perez told The Timesthat the Hollywood movie industry is the last big film customer in the world, but that digitisation is gathering pace.

“Digital film is in its infancy in Hollywood, but in maybe three years we will see much more of it,” Mr Perez said, adding that he expected Hollywood to have almost completed the switch to digital within ten years.

He declined to comment about a possible sale or spin-off of the film business, but a source close to the company said that the idea had been discussed by Kodak board members and senior executives and was well within the realms of possibility.

“We will do whatever is good for this company and whatever is good for shareholders,” Mr Perez said.

Analysts welcomed the talk of a potential sale of Kodak’s film business, as it would enable the company to devote much-needed resources to its burgeoning print and digital arms, which lag behind the industry leaders.

Most analysts believe, however, that Kodak’s film business will not command a high price because its fortunes are clearly declining in America and Europe. Sales of traditional camera film have many more years of growth remaining in Asia and parts of the Third World, however, where digital technology has not yet gained a strong foothold.

Asian movie centres, such as Bollywood, are also expected to use film longer than the Hollywood industry.

Even so, most analysts believe that the business would command a price only equal to about 0.5 times annual sales.

Sam Doctor, a JPMorgan analyst who covers Kodak, estimates that the company’s traditional film business will make sales of about $3.4 billion in 2007, declining to about $2.7 billion in 2008.

He said that the Kodak arm also owns a large amount of valuable real estate that could inflate its value.

Call me a Luddite, but it's just magic
Graham Wood: Analysis

For all of my 35 years as a photographer, I have always used film. Partly it’s because I am a Luddite, partly because film is just magic.

It is a much richer medium in which to work, even though digital has come on in leaps and bounds in terms of quality. Now, with a photograph reproduced in a newspaper, you wouldn’t be able to tell the difference between the two media.

My problem with digital is the way it encourages photographers to work. Because you can see the end result instantly on the back of your camera, it takes your mind off the creative process of taking a photograph.

Another issue is that film is honest; digital photos are easily manipulated.

Of course, the huge advantage of digital is speed, but, if you have time, as I do on a weekly magazine, then there is all the time in the world to make adjustments.

Film has a lasting endurance. It is the true medium for photographers. Do you think Ansell Adams would have used digital?

— Graham Wood is the director of photography for The Times Magazine

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posted 02-10-2007 03:58 AM                       

quote: Steve Guttag

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From what I can tell, exhibitors only seem to be getting DCinema equipment when it is practically given to them.

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