Plenty to learn from the Kodak century
Call me contrarian, but I have come not to bury Kodak, but to praise it. It’s tough to be Kodak. It’s been tough for the past five years at least. Ever since some conference speaker or management consultant decided the United States company should be the poster child for (pick as many as you like) poor planning, ignorance, hubris, myopia, inertia or any one of a catalogue of corporate shortcomings.
Kodak’s crime, of course, was to fail to see the opportunity and threat of digital photography; instead focusing on its film-based business even while it owned some of the early patents that led to the digital photography revolution.
Kodak developed one of the first digital cameras and patented it in 1975.
While it did bring a digital camera line to market in 1994, it had by then been overtaken by traditional (FujiFilm) and nontraditional competitors (Sony and a raft of others), and struggled to replicate its film-camera success in the digital world.
Today, Kodak focuses on film products for enthusiasts, instant printers, 3D printing and a growing number of collaborations turning its iconic brand into everything from T shirts to skateboards. It employs 5800 people and while it was declared bankrupt in 2012 is still alive, if not profitable. That’s now. How about then? By any measure, Kodak is one of the most successful businesses the world has ever known.
Kodak was founded in 1888, and lasted 124 years before its bankruptcy.
Film sales didn’t begin to fall until 2001, signalling the beginning of the end of market dominance spanning three centuries (just) and lasting 113 years.
In that time Kodak employed hundreds of thousands of people and supported countless families. It literally invented personal photography, and at last count had filed 76,806 patents (including the ones for digital photography already mentioned).
Add every company in New Zealand together and they’d only have about 35,000 patents in force (2017 data).
In Kodak’s century of success it returned billions to its shareholders. And it allowed everyone from the world’s top photographers to a kid with an Instamatic to capture, preserve and share their memories.
It’s not exactly true – sorry, conference speaker – that Kodak was blind to the potential of digital photography, either.
While it was late to the start line, by 2005 it was the No 1 digital camera brand in the US, with annual sales of US$5.7 billion (NZ$8.4b). Sales and share dwindled from that peak, with the nail in the coffin being our shift away from cameras entirely with the launch of smartphones, in particular the iPhone in 2007.
Much of the digital imaging technology Kodak developed has been sold to other companies, so even if you have never used Kodak’s film, you’ve probably used its smarts.
One hundred and thirty one years in business.
More than 75,000 patents. Technology that’s been used everywhere on this planet, on several parts of the Moon and even Mars.
Books have been written about Kodak’s failings, and more than one conference keynote and graphic have charted its decline. It’s easy to gloat about the Kodak moment. I’d rather learn from the Kodak century. The French Government unveiled plans to slap a 3 per cent tax on the French revenues of internet giants like Google, Amazon and Facebook.
The bill is an attempt to get around tax avoidance measures by multinationals, which pay most of their taxes in the EU country they are based in – often at very low rates. That effectively means the companies pay next to no tax in countries where they have large operations.
The tax will apply to digital companies that have global revenues of more than €750 million ($1.25 billion), and French revenue of more than €25m. That will help protect startups, Finance Minister Bruno Le Maire said in a news conference.
About 30 companies, mostly from the US but also from China and Europe, will be affected.
France is set to be the first European country to implement such a tax as the bill presented on Wednesday in a cabinet meeting is likely to pass in the coming months in parliament, where French President Emmanuel Macron’s party has a majority.
Le Maire estimated the tax will raise about €500m a year this year but that should increase ‘‘quickly.’’
He said the tax will not affect companies directly selling their own products online. It will mostly affect companies that use consumers’ data to sell online advertising. It will also apply to online services companies like Airbnb and Uber.
‘‘This is about justice,’’ Le Maire said. ‘‘These digital giants use our personal data, make huge profits out of these data ... then transfer the money somewhere else without paying their fair amount of taxes.’’
Le Maire quoted figures from the European Commission, the EU executive body, showing that the major digital tech companies pay
‘‘This is about justice. These digital giants use our personal data, make huge profits out of these data ... then transfer the money somewhere else without paying their fair amount of taxes.’’
on average 14 percentage points less tax than other European companies.
France decided to implement the digital tax after a similar proposal at the European Union level failed to get unanimous support from member states.
Le Maire said he would now push for an international deal by the end of the year among the countries of the Organisation for Economic Co-operation and Development, a Paris-based forum made up mostly of developed nations.
The Computer and Communications Industry Association criticised the French measure, saying it would ultimately lead to higher costs for French firms and consumers.
‘‘So-called digital companies are, contrary to claims, not under-taxed and they should not be arbitrarily targeted,’’ said CCIA Europe’s vice president, Christian Borggreen.
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