Why do big dominant companies fail? A seminar on Kodak

Today's Arcadia Seminar was give by Dr Kamal Munir on the topic "Kodak and the Creation of Popular Photography: Explaining the Life and Death of an Icon".

The famous photography firm Kodak recently filed for bankruptcy.  This talk looked at the reasons why a market-leading, world-famous company could be so thoroughly upset by technological change (the move from film to digital).

The history and mindset of Kodak
To understand Kodak's recent history Munir argued that we have to understand the origins of Kodak's success.

'Photographic memories' by Matthew Wilkinson on Flickr

When Kodak first started, it sold film cameras in a world where photography was practised by professionals using glass plates.  Kodak's film cameras were easy to use, and cheaper than the standard, but the market that then existed didn't want them: the quality wasn't nearly good enough for professionals.

Kodak had to create a market in order to be able to sell its product.  First of all it marketed the cameras to children, but soon moved to marketing them to women. In addition to marketing to woman, Kodak created the suggestion that it was important to record the significant events in life, and to take photographs on tourist holidays.  Munir argued that Kodak set up women as the 'archivists of family life', implying that they would be letting their duties slide if they weren't photographing birthdays, marriages, Christmas, christenings, etc.

By the 1970s or so, 60% to 70% of photographs were being taken by women.  This marketing strategy success was supported by a sound financial model: there was a huge (70%) mark-up on camera film. Kodak never sold expensive cameras - in fact, it could almost give the cameras away, as everyone had to go on buying film.

Digital photography - what changed
Digital photography--which really started to take off when PC and internet access (especially broadband access) picked up in the mid 1990s--changed a number of things about the culture of photography.

It meant that, at least in the earlier years of take up, more photographs were being taken by men than women (80% by men), that photos were now more casual and less sentimental, and that photographs were taken more to be shared than to be preserved.

Kodak's response
Munir mapped out three tiers of response from Kodak, similar to the actions of many organisations and companies when faced with technological change:

1. Ignore it and hopes it goes away
2. Deride it. Kodak made statements about how people would always value having physical copies of photos and that they wouldn't accept the lower quality of digital images.
3. Try to co-opt the technology. Kodak made some small changes to try and cope with the change.  The APS film system (making things smaller) and producing photo CDs when processing film.

All the while, Kodak remained wedded to the razor blade sales model: sell the camera (razor) cheap, and make profits on the film (the blades). It was tied into a distribution model for this lucrative old technology, and resisted finding innovative ways to meet the challenge.


This was a very engaging and enjoyable talk.  I've never studied any aspect of business, and I'd never really thought it much interested me.  But the talk really got me thinking about how and why business works, about what Kodak could have done differently, about what other companies but be in a similar position (could it be Tesco?), and about what false assumptions we in libraries might be making and basing our efforts on as we face major technological change.

ETA: John Naughton introduced the talk by wondering whether we, as librarians are making false assumptions about how can survive current technological shifts.  Is the belief that service is the answer well-founded or not?  Could we be the next Kodak?  Obviously, if we don't make any changes then the answer is likely yes, but are the changes we're trying to make really the right ones?

A recording of this talk will be available in due course on the Arcadia Project podcasts page.