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Kodak, flickr, rabble and the dynamics of fast changing markets

July 21, 2005

Yesterday, Kodak announced that they are laying off an additional 10,000 workers because, according to CEO Anthony Perez“Sales of our consumer traditional products and services are declining faster than expected…while we are not in a position to control the rate at which traditional markets decline, there is a lot I can do about the cost structure of the traditional portfolio.”

This came as a surprise to many, even the WSJ, who as late as July 10th had stated“Today, Kodak is clawing its way to the top of the digital world by bringing its best customers into that world with it.”

The idea that the traditional market is declining faster than expected, shows the incredible power of the digital world.

Some facts:

Worldwide installed camera base: 450 million still and 150 million digital

Worldwide sales of cameras in 2004: 43 million still and 77 million digital

Source: Agfa

The world of photography is changing so rapidly, there is no way the incumbent industry that can cope with this transformation. Kodak have made moves to try and stay ahead of the market like the purchase of Ofoto ( which claims 20 million users), the development of Easy Share cameras and retail printing kiosks. Kodak, like many others out there is aggressively trying to appeal to women, who are taking ownership of the digital photography role in the family.

The problem is that there is little need to print these days and that’s where the bulk of Kodak’s revenues come from. People are increasingly happy enough to share their photographs on websites like Flickr and to carry around their collection on iPods.With the cost of a photo at zero, the digital revolution has led to a proliferation of digital images, but people only want to print a few.

Kodak is trying hard to find the revenue, but it’s moving from a dominant player with vertical integration, to a bit player in a new massively fragmented and undefined world.

The area with considerable promise and potential would seem to be photos from mobile devices. It’s estimated that there are around 180 million mobile phones enabled with cameras, but getting people to really use them has been something of a challenge.

One really interesting new service that’s now available on Verizon is Rabble, here’s how they describe the product:

“You can have your channel on Rabble! First, create your mobile channel on Rabble. Your channel contains your blog, pictures, profile, favorite places, events and anything else you want to use to express yourself. Then connect with the world around you. Using a simple search interface, you’ll find other channels to connect with. This is a powerful publishing tool built to put you at the center of your universe using your mobile device. Post to your blog or create events and watch your fan base increase. Snap an interesting pic and put it on your channel and see what happens.

If you are tired of having 500 channels with nothing on, now is your chance to put something on! Maybe you want to create a photo journal or a mini comic book. Maybe you want to be a restaurant critic, complete with location details and camphone pictures of cockroaches scurrying across the floor. Maybe you aspire to join the ranks of the papparazzi. Whatever it is you can do with your camera phone, chances are someone else will find it interesting. Stop watching and start doing. The world is waiting for you. With Rabble in your pocket, anything is possible.”

This Rabble world is a far cry from Kodak’s origins and the iconic products that it once produced, but it’s the new emerging world for millions of young digital kids around the world.

At least Kodak still has a recognizable brand, that perhaps it should be licensing more and getting its name on newer technologies like camera phones and mobile blogs. Its powerful tagline,”Share Moments, Share Life”, in some ways has never been a truer statement, but just not in the way Kodak intended, or could have ever imagined it to be.

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