A proud American company that never understood digital

A long, long time ago I had to pick an online platform to store my photos.  What better brand name to trust with your photos than Kodak, right? Wrong.

For a century Kodak WAS photography.  The tech. The fun. The innovation.

I was saddened, but not surprised that Kodak announced yesterday that its photo-sharing site has been sold to Shutterfly as part of its Chapter 11 fire sale. What an amazing turn of events for this once proud and dominant company.  How could a brand that strong lose it so fast?

The company had everything it needed to succeed. The name. The technology. The resources. And yet in a decade the global brand has been decimated.

Kodak never really “got” the digital revolution did it?  When they started charging me an annual fee to store my photos, I knew the end was near for them. What a stupid move. The adjacent revenue they could have achieved from selling prints and stuff like photo mugs and calendars would have been enormous. But they needed to have the photos — and the owners of the photos — intact and engaged on their site. Instead of focusing on making it fun and great, they went for the quick bucks and lost.

Over and over, they tried to “re-invent” themselves, to no avail. Last month they exited the digital camera business. Now their patents are up for sale. When it’s all over, I don’t even know if there will be any company left.

Any way, here is the official announcement I received from Kodak:

Although I am sad to announce that our Kodak-branded service will be closing on July 2 as a result of this sale, I am very pleased to announce that we have found a strong partner in Shutterfly. They offer a market leading user experience that mirrors ours in many ways, and many of the services and products that you enjoy today on Kodak Gallery can also be found at Shutterfly.com. Their services include free, unlimited storage and 100 percent customer satisfaction guarantee. Working together, we will securely transfer your account photos to them free of charge. We are absolutely committed to making this transition as smooth and easy as possible.

For well over a decade, Kodak Gallery has operated with a mission to make it easier for people around the world to celebrate their Kodak moments through photo-sharing, photo-product creation, and more recently, innovative new mobile photo experiences. Now, it is our top priority to ensure that your images and confidential information are kept private and secure as they move from our site to Shutterfly. And of course, although Kodak Gallery is transitioning, the Kodak brand you love and trust remains.

Don’t you mean the Kodak brand I USED to trust and love?

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  • They missed a chance in 1995 when the CEO of Active Imaging, a company we were helping at that time offered Kodak (during many months of negotiations) the MvNet; which was the very first small IP camera (camera, video server, and internet connection in one plug and play package).

    We really had vision in 1995 but unfortunately Kodak didn’t. I have often wondered how things would have played out if they had acquired the MvNet and focused in the direction we all thought things were headed even then. Couldn’t resist adding my little bit of trivia here. 

    Good lessons to be learned from this post. Thank you Mark.

  • Great story Caroline!  In the past I had several meetings with Kodak and just could not get over how SLOW everything was to get anything done there. I love what the brand stood for and am sad to see it go out this way.

  • Neat article – thanks for posting. Way back in 1960, Theodore Levitt wrote an article in the Harvard Business Review which he called “Marketing Myopia”. He coined the term to describe the failure of a company to correctly identify the core of its business.
    He cited 3 examples:
    The Railroads believed they were in the railroad business, but they were in the transportation business. If they had understood the difference back in the early 1900s, they would have embraced trucking and then airplanes as extensions of their services and today airports, railroad stations and trucking terminals would form a transportation hub that would own transportation services.
    The Banks believed, until the late 1990s, that they were in the banking business. But they have awoken to the fact that they are in the Financial Services business and today they offer Insurance, Investment Advice and so on, in addition to checking and savings accounts.
    The Oil and Gas industry, again until very recently, believed it was in the petroleum industry but they are actually in the Energy business. And they, too, have broadened their research to include alternative forms of energy.
    Kodak, suffering from Marketing Myopia, believed that it was in the film business, but it was in the business of photographs and photography. It seems such a simple explanation, but many spectacular falls from marketing grace can be attributed to this same shortsightedness.
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  • It’s funny – not only did I receive the same message and think the same thing once they started charging to host photos, but we were also just talking about Eastman Kodak this past week in my Strategic Management class. It seems their lack of strategic vision and ability to adapt to change is what ultimately brought them down. On a side note, our local paper (owned by Gannett) just started charging this past week to view content online. I know newspapers are trying to find ways to become profitable again, but for some reason this doesn’t seem like the best answer and for me its reminiscent of Kodak for some reason. It will be interesting to see what happens.

  • ‘..the Kodak brand you love and trust remains.’  More appropriately….’the remains of the Kodak brand’, as in death! 

  • I actually remember that article from a HBR classic series I believe. I love how you have connected the dots here. Great job! 

  • Is that the Reno paper?  Will be very interested to see how it works out. A delicate balance if page views go down and ad rates decline. Thanks Tiffany!

  • very sad but true. Hate losing them but they buried themselves.

  • I like that analogy Gossamar. It should be even less of a stretch for Kodak to concentrate on the evolution of photography.

    Kodak had such a strong brand – it’s one of those brands that you can’t hardly believe is not going to exist in a couple years. The brand name alone could be revived with the right product line to become an industry leader again. 

    MY latest experience with Kodak was owning an Easy Share camera setup a few years ago. The camera was superb – the printed images from that 6.1MP camera were more clear than several models that have over 12MP today. The problem was that Kodak included a photo printer (4×6 maybe?) and some other peripheral hardware that was pure junk. I had 2 family members that bought an identical package after me, and all 3 of the printers eventually had several malfunctions. That was Kodak’s answer to film’s replacement. I’m guessing that for the 50-200 prints I got from the small printer, I spent tenfold on the hardware, cables and paper compared to what the equivalent amount of film would cost, and would have been satisfied simply keeping my photos in digital format to start with.   

  • You know what’s sad? I read the tweet “A proud American company that never understood digital” and knew before I even clicked here that it would be about Kodak.  Just as they used to be so well known and renowned for their innovations and superior photography equipment, they are now well known in the digital age as failures.  It really is disappointing…

  • Len

    Interesting yet sad.

    I may be wrong, and correct me if I am, but I believe Kodak Gallery Canada offers free galleries as well as various products for sale. I haven’t heard anything about them shutting it down.

    kodakgallery.ca

  • A relevant anecdote Adam. Many thanks for the great addition to the dialogue.

  • Wow, that is amazing.  Heartbreaking. And you know what else? We need those jobs! Rochester has really taken a hit and it didn’t have to be this way.

  • Hmmm. Wonder why they wouldn’t sell the whole thing?  Maybe it was set up as a different company?  Interesting.

  • Good article. An important case that will be studied for years.

    Whether you call it “myopia” or “innovators dilemma” the Kodak example shows that failing to make the jump to a new technology or business model is not necessarily failing to detect the change. Kodak saw digital coming and made some significant investments in digital.

    It is really hard to understand a new paradigm and to be willing to cannibalize your own most profitable products, even if you know you must.

    Too bad.

  • Can you imagine what it has been like to be an employee of Kodak watching it slip away? Must have been like a Chinese water torture. I’ve often wondered why “Kodak” is not the “Intel Inside” of photography. All  those patents, all that research. Why wasn’t applied to iPhones and other new devices?

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