The mainstream consumer market for film based photography products has been in decline for many years. The rise of digital imaging, be it within the latest compact digital point-and-shoots or your cell phone, has in large part been the destruction of large profit centers for firms such as Kodak who did not adapt existing business models to the new wave of digital.
Kodak wasn’t the only one affected by the shift to digital; camera firms such as Hasselblad suffered and most recently Franke & Heidecke (maker of the heralded Rolleiflex twin lens reflex) filed for insolvency. However the film companies largely suffered the most, because they were vertically integrated to deal with everything that happened after you took those pictures, from development to printing. Christian Sandström, a PhD candidate at Chalmers University of Technology, Gothenburg, Sweden, recently wrote about this very topic in a piece entitled “The Rise of Digital imaging and the Fall of the Old Camera industry”. He makes a very astute claim that “the companies that made money on ‘doing the rest’ encountered great difficulties for two reasons. With the decline of film, ‘the rest’ was simply much less, and other firms were better positioned to do what remained.”
The rise of the digital imaging has in large part cultivated a meme on the Internet that film is dying if not already completely dead. Many a commenter and writer has stated in no uncertain terms that film is the past and that digital is the future. I’d say that statement is incorrect, because digital is in fact not the future: it’s the present. Mainstream film sales have been in decline for nearly a decade, and unless there is a shortage of silca I’d venture to say that digital isn’t going away anytime soon.
But where does that leave the market for film? The demand for film has fallen, sales have contracted, and the market as a whole in no longer mainstream. While that hurt the bottom lines for firms like Kodak and Fujifilm and killed firms such as Polaroid and Agfa, is the shift away from the mainstream the end game for film? Is there still a demand for the product, and if so, can it be profitable?
New products in the face of decline
Kodak announced new Ektar 100 35mm in September 2008. Demand was high enough that in April 2009, that emulsion was released in 120 format and received good reviews. Kodak even released Vision3 500T color negative film in Super 8 format in September 2008. In the past two years, they’ve also revamped the Porta and T-MAX 400 emulations as well. In November 2008, Amateur Photographer wrote that “Kodak says sales of sheet film are particularly healthy” and that “certain black & white films are bucking the downward trend in demand among professional photographers in Western Europe and the US.”
Ilford has also made similar statements in regards to their black and white film lines, going so far as to state in a press release last year that “today’s marketplace that has enabled black-and-white photography and its associated products and services to carve a defined niche for itself.” In 2008, they released ILFOSOL 3, a new black and white film developer. They’ve started the “Defend the Darkroom” campaign and a special initiative in support of ultra large format (ULF) photographers. Steven Brierley, Director of Marketing at HARMAN technology (who own the Ilford name) stated that they are “committed as ever to manufacturing a wide range of black and white films. This is actually the fourth year we have staged the €˜No M.O.Q€™ ULF ordering window and we will continue to do so for the foreseeable future.”
One of the most recent new film product attempts to take on the niche is The Impossible Project, which is seeking to re-invent instant film for use in Polaroid cameras using former Polaroid equipment and engineers. In a recent New York Times article Florian Kaps (the primary entrepreneur behind the effort) stated that “if everyone runs in one direction, it creates a niche market in the other.” With $2.6 million in capital and support from Ilford, the project continues on, hoping to tap the market that Polaroid left.
In the wings, you continue to have choice beyond the larger players, with firms like Foma, Fotokemika d.d. (which produces Efke and Adox), and manufacturers in China (who seem to be catering to large format photographers).
Failure beyond the market for film
Polaroid is often used as an example of a company that failed because they only stuck to film, only to get out of the film business too late. This generalization isn’t however true. Polaroid didn’t stop making film because of a contracting market, they stopped making film because their business operations were poorly managed. Polaroid was in trouble long before digital; the lengthy legal battle with Kodak, the hostile takeover they fended off in 1988, and sales were stagnate as early as 1990. Their attempts to diversify their products lines were poorly conceived; their move away from core strengths in instant imaging and research and development was the choice that sealed their fate.
A better example would be Agfa, which did release digital camera products but was not able to handle the shift from mainstream market to niche for film. Even after Agfa sold off the film division which became AgfaPhoto, it folded in just a year under mounting losses.
Those left standing reap the rewards
Fujifilm stated in an a 2007 annual report that “sales of color films declined” but that “on a more positive note…Fujifilm increased its market share thanks to the success of a sales strategy that seeks to take advantage of the exit from the market of competing companies.” Ilford stated in a press release that, “most photographic film, paper and chemistry manufacturers have been involved in the black-and-white sector at one time or another, but many dropped out as the popular market declined, leaving ILFORD PHOTO as the world’s leading manufacturer of this genre.”
While many people may see the consolidation of the film industry as a bad thing for consumer choice (which in the case of black and white film doesn’t generally hold true), that consolidation has allowed firms who have been able to weather the shift from mainstream to niche market to increase market dominance. In turn, proper management of the market would allow that niche to become profitable if it isn’t already for those firms.
The death of film…long live film
Niche markets can be profitable when pursued with both the understanding that you are entering a niche market that will not become mainstream and with realistic growth goals. The shift that has taken film into a niche market setting, is good for both film photographers and the companies supporting them. Instant film has the potential to make inroads into developing nations where digital may find difficulty. Large format photographers have largely been left out of the digital revolution, though many find themselves using hybrid workflows after the negative is developed traditionally. Medium format digital remains outside the reach of the amateur photographer with price tags above $20,000; yet medium format film, camera, and scanner provide similar results for a fraction of the cost. Finally, in a world where Ashton Kutcher is pitching Nikon digital cameras, you have the Brad Pitt shooting with a Lomo and Matthew Fox sporting a Holga.
While the flamewars will continue from fanboys around the world on both sides of the analog/digital divide, the reality is there is room for film among the digital superhighway. It just happens to have moved out of the mainstream spotlight and into a niche market. While that niche market will never be as large a profit center as the mainstream market before it, it can continue to be profitable for those firms left standing.