x Abu Dhabi, UAEFriday 28 July 2017

The Takeaway: Kodak could not leverage its own innovation

Ironically, the camera and film manufacturer Kodak, which has crumbled into bankruptcy protection, invented the digital technology that eventually sealed its demise.

Illustration by Sarah Lazarovic for The National
Illustration by Sarah Lazarovic for The National

Kodak used to advertise its services with the slogan "You press the button, we do the rest". And it did - do the rest - for more than a century, with effortless simplicity rivalled only by the company's more recent slow, painful fall from grace: last Thursday, Kodak crumbled into bankruptcy protection. An uncertain future awaits.

For much of its history, Kodak represented a gilt-edged opportunity for investors as it forged a near-perfect relationship with its consumers. Trademarked in 1888 by George Eastman, Kodak would prosper first with its box Brownie camera - which turned photography into the hobby of the masses - and later with a business model that encouraged users to buy both its hardware and its high-margin consumables.

It's odd then that it wasn't so much the advent of digital cameras, as the arrival of digital everything, that sealed Kodak's demise.

In fact, Kodak invented film-free cameras. Steven Sasson is credited with developing the first digital camera in the 1970s, some two decades before the mass uptake of such devices started and film began its inevitable descent into obsolescence (production of Kodachrome film ceased in 2009). That Kodak's management in effect scribbled the writing on the wall of its headquarters years before the competition, and then seemed unable to read the words they'd writ large, seems the cruelest irony of all.

Those who have picked over the bones of Kodak - and let us not forget that Chapter 11 protection allows a company a period to restructure its operations free from the attentions of chasing creditors, a time frame exploited to such positive effect by General Motors - do not suggest the company has much of a future. Analysts predict Kodak will have to dump assets and staff and its management team will have to boldly reshape its product line - and do it without the benefit of a huge war chest.

It may sound glib in comparison, but all GM had to do was build better cars than Ford, Toyota et al. For Kodak, on the other hand, it's no longer clear exactly whom its competitors are. The cameras we now use every day and on which we "share moments, share life" (as another of the company's slogans once had it) are more likely to wear brand names such as BlackBerry, Apple and Nokia, than they are Polaroid or Olympus. And the place where we "print" those memories is more likely to be Facebook than a photo-booth.

Questions of a similar nature - such as who the competition is and where the threat is coming from - also trouble the culture business.

The way we consume newspapers, books, music, film or television is changing almost daily. If you are a producer, an author or an artist, where once the internet may have appeared a powerful force for the possible - its global distribution method is unprecedented - now it must feel as if it is overrun by industrial-scale piracy and consumers who want to play but not pay.

In this digital landscape, what is the future for those who invest in the creative process? Robert Levine's book Free Ride (2011) provides close to the best assessment there is of that terrain. "The internet," he writes, "was supposed to empower creators, corporates and independents alike ... it's time to acknowledge that isn't happening."

It isn't happening because few consumers equate the word "theft" with finding, downloading and consuming the latest album, film or TV programme on some shadowy file-sharing site in the far corners of the internet.

Instead, online piracy exists in a world in which we all nod and wink at each other and say, "You're doing it, so why shouldn't I?".

That is an unsustainable model and we all know it. If culture is to prosper, we may have to accept we're approaching some kind of "Kodak moment" - if we don't change our ways, what we now take for granted may be changed for us.