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And now we're on the radio and on demand. I think you're breaking into this wall regardless. I was hoping you wouldn't say that. to go and get some whiskey, I think. Get the whiskey for sure. Subscribe to This Old House Radio Hour from L.A.S. Studios. It used to be that cameras had film, like they weren't in your phone, because phones were on the wall in your house.
Anyway, that film and your camera had to be processed. Back before there were neighborhood photo labs or instant photo developing kiosks, you had to send your film to Kodak. And Building 65 in Rochester, New York, it was their job to develop your film, print your photos, and get them back to you. One of the folks who helped print all those photos was this woman.
Well, my name is Bienvenida Antonetti, but they call me Benny for short because they were always butchering my name. Benny loved her job as a production operator. But it brought her into contact with what I would call some interesting photos. Did you see some crazy pictures? Oh yeah, don't get me started on that. Literally you name it and Benny saw it come through her lap.
The worst one I saw was, you know, a dog funeral. What? But there was, yeah, a complete, full-blown dog funeral. Like, that was the worst one? Well, no, I won't go into the nasty ones. Come on, just banning. Don't do this to us. Just give us a hint. That was something else. Come on. Clearly it's stuck in your brain. Come on. Yeah, yeah. You had all kinds of sizes and all kind of poses. So clearly, intimate photography is not a new thing.
I met my new best friend, Benny, in Rochester at an annual luncheon for alums of Building 65. What we're at is the Kodak Survivors Luncheon. That's what we call it. It's been going on since 1980. That's Ron Sowers. He helped organize the event. He worked at Kodak for more than 30 years, most of that time in Building 65. Kodak Building 65 was a family. Right. We're still a family.
It's true. A lot of the folks at Building 65 met their sweethearts on the job. They've been through births and graduations together. They played on company sports teams and cooked for company picnics. And like all families, the Building 65ers have had to weather a few storms together. Like when their lab shut down in 1986. and later when Kodak, the world's largest photography company, went bankrupt in 2012. Good morning we begin with breaking news. Rochester based film giant Kodak
In an instant. The click of a shutter, perhaps. The company that pioneered the snapshot. that put a camera in every hand, that reshaped our understanding of the visual world. was basically gone. It's easy to think that Kodak collapsed because of the advent of digital photography. And you'd be partially right.
Film, as well as all that printing and processing, just isn't necessary when everyone has digital cameras in their pockets. But that's far from the whole story. Because it was Kodak that invented the digital camera in the first place. That should have put them on solid footing, but it didn't.
I'm Lauren Ober and from American Public Media and the Carlson School of Management at the University of Minnesota. This is Spectacular Failures, the show where we invite failure over for a potluck, even though it always brings a salad. George Eastman was a bank clerk in Rochester, New York when he took up an interest in photography. At the time, in the late 1800s, photography was an expensive, clunky sort of hobby and inaccessible to most people.
Film hadn't been invented yet and the heavy wooden cameras used these glass plates coated in light-sensitive chemicals to make images. But Eastman figured there had to be a better, more efficient system of making photos that could bring this rarefied hobby to the masses. So, he started tinkering. While working at the bank, he's doing this, you know, in his spare time in his mom's kitchen. I'm sure she really appreciated that. Yeah, I'm sure.
That's Todd Gustafson. He's the curator of technology at the George Eastman Museum, and he's showing me around the institution's vast collection of cameras. About 8,000 total. He decides to get really into this, and he actually designs and patents a machine that will make gelatin dry plates. Mmm, gelatin delicious. Eastman's early dabbling eventually led to the creation of flexible negative film to replace the fragile and cumbersome glass plate.
But he didn't stop there. In 1888, Eastman invented a new consumer camera that he called the Kodak. So what we have here is the oldest known Kodak. This is serial number six. The camera came loaded with the film, enough for 100 exposures. It was pretty expensive. It sold for $25. Processing and reloading was another $10. Eastman's first gadget was a simple box camera made out of wood and bound in book leather.
And really, if you look at what George Eastman did, is he took something that was very difficult photography to do, and he made it simple. And he built a camera that was easy to use. Basically, hold it against your body, push the button. That was it. But here was the real innovation. This film that Eastman created, it was still hard to develop for the amateur photographer. Not everyone could turn their mom's kitchen into a photo lab.
So he was like, listen, y'all, you press the button and we'll do the rest. And it's the we do the rest part that really is what made this go. You're supplying film that works, right? But the processing is going to stump most people. So what they decided to do is they would actually just do it for you. And that one little decision to process the film for the customers changed everything.
Before Eastman's innovation, most people didn't have any visual record of their lives. Portraits were for the wealthy. If someone told you you had your grandfather's nose or your grandmother's tree trunk calves, speaking from personal experience, it wouldn't mean anything unless you had met them. There was just no record of what previous generations looked like.
But with consumer photography, it gives whoever has access to having photographs made of themselves the opportunity to create a visual history, not only of themselves, their family members, etc., but of their lives in general. and that's a significant option. That's A.D. Coleman. He's a photocritic, historian, and curator in New York. In some ways, this probably changes our relationship to various ideas of how you construct.
a family and how you mark friendship and how you mark important moments in your life. Memory is a powerful fork. As humans, we're sentimental creatures. We feel the passing of time and we have an impulse to market in meaningful ways. Eastman understood this, and so as a result, Kodak wasn't just a company that made cameras or film, they were in the business of memory making. And Eastman's timing was perfect.
Thanks to the Industrial Revolution, middle class people, mostly white folks, had the luxury of thinking about memories. They started to have vacation time and spare income, and they wanted to do stuff with this extra time and money. ride bikes, go on picnics, hit the beach in their amazing unisex bathing suit. Suddenly photography became an accessible way to capture memories of this leisure time.
The snapshot, a Kodak invention, froze moments in time in a way that nothing had before. I think part of Eastman's genius was that most people would be wanting to use this. outdoors, and therefore you didn't need to get involved with complicated lighting issues, etc. So it was really set up, in a sense, the first idiot-proof. Kodak's point-and-shoot camera was an immediate success for AceMet. It was certainly a major step toward what we often call the democratization.
photography that many of us think is implicit in the invention of photography itself Kodak's technological innovations made them the leading photography company in the world but it was their brilliant marketing that made them a lifestyle brand. They didn't just provide equipment with which to make photos, they taught people to see in pictures, proposed what memories to capture and trafficked heavily in nostalgia.
One of the company's earlier slogans was, prove it with a Kodak, suggesting that visual records are more authentic than memories. And this slogan might sound familiar to you. It's basically the 20th century version of picks or it didn't happen. Another one of the company's clever marketing ideas was branding snapshots as Kodak Moments. This delightful spot features a cute-ass baby gazing adoringly into the middle distance. These are the This baby is going to have a very momentum.
year of first smiles first steps first And none of these first moments will ever happen again. Now if you were this baby's parents, which film would you choose? I mean, I know what film I'm buying for my non-existent baby. But really, that kind of marketing worked. Instead of doing it for the gram, people were doing it for their photo albums and their slide collection.
And I can attest to this with the many volumes of Lauren Ober's so-called life, 1992 through 1996, my photo albums featuring out-of-focus people I barely remember. Snapshot photography in the 20th century became ubiquitous. As a result, Kodak became one of America's most iconic brands. There's sexy yellow boxes of film or everywhere. The company's business model was pretty perfect. It was basically the razor razor blade scenario. Kodak sells you an inexpensive camera
then you buy the film for it over and over and over again. Film was just incredibly profitable. That's Mary Benner. She's a business professor at the University of Minnesota, which, full disclosure, underwrites this show. The cameras were cheap. Or they made very little money on the cameras. And then they made piles and piles of money on the film.
You know, similar to HP printers, right? Where, you know, the printer doesn't cost much at all, but the toner is, like, incredibly expensive. Damn, that toner will bleed you dry. And if you're like me, you're constantly running out. Yes, I print a lot of things. Get off my back already. So that business model... and the way that Kodak really owned particularly the U.S. market was just really a recipe for success.
The bottom line was, Kodak just made really great stuff and everyone bought it. George Eastman envisioned a camera in every hand in the way that his contemporary Henry Ford wanted every American to own a Model T. And he basically succeeded. By 1976, more than 40 years after Eastman died, Kodak made 85% of the cameras bought in the US and 90% of the film.
That's about the time that Debbie Finewood started working for the company in Rochester. At its peak, Kodak operated like a small city within a city. It employed 60,000 people and was one of Rochester's biggest economic engines. Debbie was 19 when she got a job at Kodak. When I went in 1974, there was a big hiring boom for Kodak.
so i went down to lake avenue and stood out on the sidewalk because the line was that long it was out the door out to the sidewalk out to the street and you know just waited in line to go in and get an interview and pretty much everybody that was in line that day got hired. Debbie loved working in Building 65. Her job provided a roof over her kid's head, she had fun with her co-workers, and she learned a ton of new skills, like developing prints and touching them up.
But then, in 1986, Building 65 closed. The print and processing lab shut down, a casualty of the unsparing march of technological advancement. The work that Debbie's department did had become outmoded. You can now get your photos developed in an hour by many photo labs and pharmacies and grocery stores. No more waiting around for Kodak to send prints back by snail mail. Every week. Somebody was going to get a pink slip, and that pink slip was your layoff paper.
And people were just like walking around like they had a cloud hanging over their heads, you know, just afraid of a foreman approached you, you know, because this could be you, you know. And you knew if somebody got one because you would see men crying in the halls. Not uncommon at all. So it was a difficult time.
The folks from Building 65 who didn't get their walking papers were transferred to other departments. Debbie ended up getting reassigned to the mailroom and eventually landed in customer service. All this change at Kodak was the result of high-tech innovation. And for the most part, the company was driving this change. Even though Kodak was the industry leader in film and cameras and photo finishing, they still had an eye on the future.
The same year Debbie Finewood landed at the photo giant, another Kodak employee, a young electrical engineer named Steve Sasson, started working on a special project. He was tasked with fiddling with a gizmo called a charge coupling device imager. Or what photo geeks know today as a CCD. And what it was was a piece of silicon that you would shine light on it for a period of time and it would create a corresponding charge pattern and then using this mechanism called charge coupling.
you were able to get the information out. What Sasson is describing is the thing that makes digital photography work. He hooked these up to some spare Kodak parts, and eventually the information that came out was a still picture. Sasson connected his toaster-sized device to a television, and in front of a boardroom full of Kodak executives, he debuted what he called filmless photography.
It didn't require film, it didn't require paper, and so you can imagine that a company whose whole heritage and its business model is based on that wouldn't be that excited about proposing a new idea. Although we worked on it for decades. In 1975, you could find Kodak's yellow canisters of film all over the world. Professional and amateur photographers swore by it. But Steve Sasson had just built the first digital camera in a Kodak lab. And that invention? That could wipe all that film out.
We're going to take a quick break. When we come back, how the giant fell and what cryptocurrency, drapery, and Forever 21 have in common. Kick off summer with Memorial Day savings at Lowe's. Right now, get five Scott's Naturescape's one and a half cubic foot mulch bags for just $10. Get up to 40% Select major appliances.
And save an extra $50 on every $500 you spend on select major appliances, $396 or more. Lowe's, we help. You save. Valid through 528. Mold shopper excludes Alaska and Hawaii. Selection varies by location. While supplies last. See Lowe's.com for more details. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast?
Easy. Just use Indeed. Stop struggling to get your job posts seen on other job sites. With Indeed Sponsored Jobs, your post jumps to the top of the page for your relevant candidates. so you can reach the people you want faster. According to Indeed data, sponsored jobs posted directly on Indeed have 45% more applications than non-sponsored jobs. Don't wait any longer. Speed up your hiring right now with Indeed.
And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash P-O-D-K-A-T-Z 12. Just go to Indeed.com slash T-O-D-K-A-T-Z 12 right now and support our show by saying you heard about Indeed on this podcast. Terms and conditions apply. Hiring, Indeed, is all you need. Kick off summer with Memorial Day savings at Lowe's. Right now, get five Scott's Naturescape's one and a half cubic foot mulch bags for just $10.
Get up to 40% off select major appliances and save an $50 on every $500 you spend on select major appliances, $396 or more. Lowe's, we help. You save. Valid through 528. Mold shopper excludes Alaska and Hawaii. Selection varies by location. While supplies last. See Lowe's.com for more details. Welcome back to Spectacular Failures. I'm Lauren Ober.
Preet Veseland has been all over the world writing stories and shooting pictures for National Geographic. In his 30 years working for the magazine, he took hundreds of thousands of photos. His home office in Northern Virginia is full of the fruits of those many shutter clicks, boxes and boxes of neatly organized photographic slides. Well, I've been taking photographs of all my National Geographic assignments and there have been more than 40.
So I keep a file for everyone. Here's Arctic native people, Baltic Sea, Estonia, Brazil, the monsoon world. For his entire professional career, pre-used cameras loaded with film, specifically Kodak film. It was considered the gold standard for professional photographers. The process slides came back in these bright yellow boxes. This was the thrill to open up your yellow boxes when you got back to the geography because you're almost shaking in anticipation because you remember taking it but
You think, that was a masterpiece. And then you open up the yellow book. Shaking hands, you pull off the slides and you look at it. Oh, Jesus, it's overexposed. Preet's film of choice was Kodachrome. perhaps the most famous film of all time. The intensity of the color was unmatched and the flesh tones, at least for white skin, were spot on. What Codogron had was wonderful deep red. and yellows and an overall
festive appearance that could be modified. Kodachrome was like the standard that other films compared themselves against. The film was so iconic, Paul Simon wrote a song about it in 1975. So you were shooting film way after digital came out. I stopped shooting film and 2004. Why? Because that's when it became obvious that the resolution was just as exact. They moved up the resolution step by step for three or four years.
And like any other innovation that was considered a toy, lists and people who where Prudence said let's wait until they perfect these until they start competing with what I already had. A handful of digital cameras came on the market in the early 90s, but they were all bulky rigs with terrible resolution. Professional photographers were loath to use them. Still, Fuji, Nikon, and other brands kept experimenting with the medium. But from the outside, it looked like Kodak was asleep at the wheel.
Steve Sasson, the guy who invented the digital camera, says that just wasn't true. I'll give you a story about Apple's first camera. It was called the Quick Take 100. It was Apple. It was marketed by Apple. It was designed and built by Kodak. And Kodak didn't want anybody to know we built it. The Apple Quick Take 100, made by Kodak.
is generally considered to be the first consumer digital camera. We didn't have any channels to sell this thing anyway, but we had the technology, we knew how to do this, and they were the imaging computer in the mid-90s, and so... They came to us, and they needed an on-ramp to their computer, and Kodak was happy to do this, but we couldn't tell anybody we did.
There's a common belief that Kodak didn't see the digital wave until it crashed on top of them and that belief is wrong. Throughout the 70s and 80s Kodak experimented a ton with digital. In the 90s their engineers began outfitting Nikon camera bodies with Kodak digital guts. These Frankenstein cameras were mighty pricey, though. About $17,000 a pop. Only the government and news outlets could afford them.
Willie Sheen knows Kodak had digital photography in its viewfinder. As a former executive at Kodak in the early 2000s, she was tasked with ramping up R&D for the company's digital product. So I was brought in really to run a separate unit, separate from the mainstream company, and our focus was going to be on all things digital. Digital photography, digital cameras, services associated with that, any kind of product.
somebody who was going to use digital cameras would be interested in. The fact that she's department was set apart from Kodak's legacy business is really important. They had really... developed ways of doing things which were great for the film business but might not be so appropriate for the digital business. And they wanted to get us away from all the practices and also the burdens of the traditional business, which had been very, very successful for 100 years.
In the early 2000s, Kodak recognized that it was in trouble. Digital photography had gotten to a point where it matched film photography in terms of quality. The cost of a digital point-and-shoot camera was now in line with a traditional film camera, and home PCs where folks could store digital images were pretty common. Kodak clearly needed to make some drastic changes in order to stay ahead of this tech search.
But remember the Razer razor blade model that made Kodak so successful in the first place? Yeah, that wasn't going to work in the digital realm. So, if it wanted to forge ahead in this brave new digital world, Kodak had to totally rethink its business model. But that was going to be really hard for a lot of reasons. First off, Kodak was the most recognized film brand in the world.
And, says ex-Kodak exec and current Harvard Business School professor Willie Shi, that film made them a lot of money. There were a lot of people who were very uneasy about this transition because film was immensely profitable okay and i used to tell people that you know on a good day we'll have double-digit margins as opposed to less than that. And that was not something... that anybody was used to.
The idea of telling shareholders and Wall Street analysts that they're going to make less cash because you're shifting resources away from the traditional moneymaker to a new technology and an untested business model. would go over about as well as you'd think. Business professor Mary Benner says that tech companies that are rooted in innovation, your Googles and your Amazons, are encouraged by the market to develop radical new ideas.
But for successful established companies like Kodak, there are huge pressures to maintain the status quo, both from inside and outside the boardroom. I would say the market or analysts reinforce whatever kind of debates are going on in the company and give credence to the idea that we shouldn't do these new things because they don't match our traditional business model. So as long as this film goose was still laying golden eggs, it was probably best that Kodak nurture that goose, not starve it.
Or go cheat on that goose with some other younger, better looking bird. I'm really blowing that metaphor out, huh? A second thing that made re-tacking to digital hard was the people who worked there. And I don't mean that in a bad way. Kodak built its workforce to make the best film in the world. And its workers were really good at that. But for the company to remake its entire business plan, it would need a team with a totally different set of skills.
Scaling down the film side while scaling up the digital side wouldn't exactly have been a seamless or intuitive process. But ex-Kodak engineer Steve Sasson says, It wasn't just that Kodak had to change its production lines or its workforce. And I also think it's hard for any established company that's as successful as Kodak was for over 100 years.
to actually fundamentally change, it becomes a cultural challenge, which is the most difficult of all challenges for companies to deal with. In order to really crank up their digital capabilities, Kodak needed money. And that money would have to come from the film side.
You know, the side that digital would eventually put out of business. This pitted people from the traditional side of the company against those from the shiny new high-tech side. People in the traditional businesses would say, well... My profits are supporting your losses, right? Because initially we were losing a ton of money as we were trying to figure things out, okay? But someday, when the digital business...
takes over film, and I don't think there was ever any question in most people's minds that that day would come. Okay, but the question was, when that day comes, What happens to me? Do you leave me by the side of the curb? And that's a really hard problem. The consequences of these growing pains were real. People lost their jobs, and a quiet kind of resentment took hold. But regardless, the industry's digital future couldn't be ignored.
It would be nice if all Kodak had to do was retool its business model, retrain its workforce, crank out a few digital cameras, and then bingo! The company was on solid ground again. But it didn't work like that. For one, Kodak didn't have any fortune tellers on the payroll.
Which brings us to a third big problem. It was really hard to anticipate exactly how this new digital frontier was going to shake out. If companies all had a crystal ball, we wouldn't have consumer tech flops like Laserdiscs or Google Glass. But without Google Glass, we wouldn't have the term Glasshole. So that's something.
Kodak correctly anticipated that digital photography would be a thing, but says photocritic A.D. Coleman, they could not imagine that people would simply engage with dematerialized images. with no physical object. I mean that the making of a print from a digital image would be an unusual phenomenon for the average amateur, right? That people would be happy with that. They couldn't envision it because they were locked into paper and prints and, you know, go to your drugstore or whatever.
Kodak can be forgiven for not wanting to consider a world where people didn't need albums full of blurry vacation snapshots. or where nearly all of their consumer products from film to photo paper to digital printers would be completely unnecessary. I mean, change is hard, right? Even with all these challenges weighing on the company, by 2005 Kodak was the leading producer of digital cameras in the world. But their cameras were nowhere near as profitable as their film business.
Remember, cameras had historically been used to get people to buy other more profitable Kodak products. And with the growing popularity of its digital side, Kodak's cash cow is all but dry. In 2009, Kodak announced that it would discontinue production of its popular Kodachrome film.
The company gave National Geographic photographer Steve McCurry the last role of Kodachrome ever made. He shot 36 photos, including portraits of tribal elders in India, New York City street scenes, and actor Robert De Niro looking very De Niro-esque. In the years leading up to its bankruptcy, Kodak did everything it could to bring in some cash. It made fancy inkjet photo printers and created an early online photo sharing site.
Plus, the company was sitting on a trove of pricey patents and aggressively went after patent violator. A number of those patents had Steve Sassen's name on them. Just about every camera manufacturer in the world, cell phone manufacturer, has licensed this technology. And so...
Billions of dollars was spent in research creating a very formidable intellectual property portfolio that turned out to be actually, in the mid-2000s, an economic advantage to Kodak. Kodak did license this stuff and got a lot of money for it. In 2010, Kodak sued Apple and the company that makes Blackberry for a billion dollars over photo technology they were using in their phones. But Kodak lost that suit, and the verdict had a devastating effect on the value of its patent.
By January 2012, the company was mired in debt and its stock was trading for penny. In a midnight announcement, the company declared bankruptcy. Here's former chairman and CEO Antonio Perez explaining the decision. The people of Kodak have made great strides in transforming this company over the last several years, but more work remains ahead of us. We're taking this step at this point in our transformation in order to build the strongest possible foundation for the Kodak of the future.
Longtime employee Ron Sowers remembers when he heard the news. It wasn't good. It wasn't a happy feeling, you know. I mean, some people were in tears. They were crying and that was their job, their livelihood. As a result of the bankruptcy restructuring, Kodak sold off a number of its businesses and significantly downsized at its Rochester headquarters. Lots of folks lost their jobs. Today, just 1,600 people work for Kodak Upstate, compared to 60,000 at its peak.
Kodak still makes stuff. 35mm film for Hollywood cinema, 3D printers, and fabric coating for things like drapery and awnings, to name a few. A couple of years ago, one of its spin-off companies brought back Ektachrome, though the beloved Kodachrome film has yet to be resurrected. Kodak also licenses its name for all kinds of goods including headphones, baby monitors, and inexplicably leggings and crop tops from Forever 21.
In 2018, the company announced it was getting into cryptocurrency, but don't even ask me to explain that move because blockchain ain't my jam. While Kodak might be a shadow of its once mighty self, we are very much living in a Kodak moment. Photocritic Eddie Coleman says, George Eastman's vision is still felt every minute of every day all around the world. For my money, actually, the real democratization of photography is happening right now. with the advent of the cell phone camera.
Everybody is carrying cameras. Everybody is making pictures on a regular basis. Everybody is sharing them with other people. And for whatever reason, the reasons may be, the motives may be trivial. But the fact is that everybody is engaged with communication. through photographs that they make themselves. We communicate in images now more than at any point in human history. And the business of capturing memories has never been more robust.
This sea change is something that Kodak was uniquely positioned to cash in on, and for 130 years they did. The company had cornered the market on recollection. But in the end, all those pixels created a force that no amount of nostalgia could overcome. Digital technology ended up breaking apart George Eastman's company, but there is no question that he succeeded in getting a camera in every hand. So, in the words of Beyonce, pose for the camera now. Spectacular failure.
is a production of American Public Media in the Carlson School of Management at the University of Minnesota. It's hosted and produced by me, unprecedented catastrophe, Lauren Ober. Exceptional Gift Whitney Jones is the show's producer. Our editor is Instagram star Phyllis Fletcher. Our theme music is by the delightful David Shulman. Other music in the show comes from the Jeremy.
jeremy castillo and jeremy ray lauren d is the interim director of podcast at apm our other stellar apm buds include alissa dudley tracy mumford and christina lopez
Big love to the Marketplace DC Bureau, especially Betsy Streisand. If you want to see some photos Whitney took in Rochester with a 1950s Kodak Brownie Hawkeye check out our Instagram at failure underscore show that's failure underscore show which seems sacrilegious but whatever check us out on the gram Do you walk around all the time thinking like, I invented the digital camera and every single one of you is carrying it around in your pocket.
Um, no, I don't, uh, no, I don't spend a lot of time on that. But, uh, um... It's time now for some Biz Whiz. That's business wisdom you can use from our friends at the Carlson School of Management at the University of Minnesota. Professor Ravi Bapna holds the Curtis L. Carlson Chair of Business Analytics and Information Systems.
And he has some tough love advice for anyone out there thinking about opening a brick and mortar store. I would say, no, wait a minute, like, you know, try to actually first go and build a following on Instagram or on a platform. can still be creative about how you interact with your potential customers build a base which then you can kind of maybe take to a new level to the physical store
Kick off summer with Memorial Day savings at Lowe's. Right now, get five Scott's Naturescape's one and a half cubic foot mulch bags for just $10. up to 40% off Select Major Appliances and save an extra $50 on every $500 you spend on Select Major Appliances, $396 or more. Loves, we help. You save. Gala through 528. Molch offer excludes Alaska and Hawaii. Selection varies by location, while supplies last. See Lowes.com for more details.