The Timing of Kodak's Price Hikes

[Guest Jim Murdoch]

Am I the only one who's noticed that Kodak's announcement about their intention to raise the price of film came just a couple of days after the first public release of a Genesis-captured movie?

I can just imagine it: "That's it?!!" (dialling noises) "Hello? Yeah, go ahead with the price increase. What? No, 15% will be fine; you can go to twenty if you feel like it..."

Edited April 20, 2006 by Jim Murdoch

[John Pytlak RIP]

Am I the only one who's noticed that Kodak's announcement about their intention to raise the price of film came just a couple of days after the first public release of a Genesis-captured movie?

I can just imagine it: "That's it?!!" (dialling noises) "Hello? Yeah, go ahead with the price increase. What? No, 15% will be fine; you can go to twenty if you feel like it..."

 

It's been quite a few years since the last general price increase. Price increases for selected motion picture films will range from 3% to 5%.

 

Over the past year, Kodak has been absorbing unrelenting increases in the costs of raw materials used to manufacture film, including silver (almost doubled in price in the last year!) and petrochemicals. Other costs tied to the escalating price of energy -- including transportation and packaging-- also have increased. These pressures have reached a point where they can no longer be offset by Kodak's ongoing productivity programs.

 

Kodak remains committed to its film customers and to supporting the diverse imaging needs of consumers, professional photographers and filmmakers.

[Brad Grimmett]

Am I the only one who's noticed that Kodak's announcement about their intention to raise the price of film came just a couple of days after the first public release of a Genesis-captured movie?

I can just imagine it: "That's it?!!" (dialling noises) "Hello? Yeah, go ahead with the price increase. What? No, 15% will be fine; you can go to twenty if you feel like it..."

Wow, a conspiracy theory about prices going up......quite a stretch.

[K Borowski]

It's been quite a few years since the last general price increase. Price increases for selected motion picture films will range from 3% to 5%.

 

Over the past year, Kodak has been absorbing unrelenting increases in the costs of raw materials used to manufacture film, including silver (almost doubled in price in the last year!) and petrochemicals. Other costs tied to the escalating price of energy -- including transportation and packaging-- also have increased. These pressures have reached a point where they can no longer be offset by Kodak's ongoing productivity programs.

 

Kodak remains committed to its film customers and to supporting the diverse imaging needs of consumers, professional photographers and filmmakers.

 

John isn't giving you all a corporate runaround here. I actually am taking a class in college on plastics, and about a month before Kodak's hike, he said that the cost of oil-derived plastics had gone up, on average, by about 25% in one year. I actually expected some sort of price increase from Kodak after hearing that. Silver is at $12/troy ounce. That's the highest it's been (I believe adjusted for inflation?) in 20 years. I'm worried more about what sectors are going to see the 17% hikes (do you know John?). 3-5% is very reasonable. Eastman Kodak may be taking a loss off of what they were making before in profits. When gas first spiked above $2, a lot of station owners were selling at a loss because customers just stopped coming when it wasover $2 per gal. With digital threatening the AgX motion imaging market, Kodak really is stuck between a rock and a hard place here. I find it funny taht there was no mention of Fuji's price increases. I'm not sure about their MP stocks, but their revised line of C-41 still negative film must have gone up at least 15%, although it's going to be cheaper after the percentage increase on Kodak film now.

 

Regards.

 

~Karl Borowski

[Charles MacDonald]

John isn't giving you all a corporate runaround here. ... I actually expected some sort of price increase from Kodak after hearing that. Silver is at $12/troy ounce. .... 3-5% is very reasonable. Eastman Kodak may be taking a loss off of what they were making before in profits. .... With digital threatening the AgX motion imaging market, Kodak really is stuck between a rock and a hard place here.

When the Globe and Mail mentioned the price increse, I noticed that most film is going up 15% , while MP film is only going up 5. That I think is the competitive presure constraining costs. If the price of print stock climbs "too much", there will be more preasure on the theatres to install DLP. (perhaps the production/distribution folks will ask a surcharge to theatres that want real prints..)

 

Once the Market for hundreeds of thousands of feet of print stock goes down, staying in the MP film business will be a harder sell to the Kodak Shareholders. (Although the fact the OSCAR awards are at a place called the Kodak Theature is good for business)

 

The MP Camera film business is probaly a loss leader for Kodak, and has been for years. They spend a lot of bucks to change the film every few years ot make it better. The print film is probaly a bit better than break even, due to the volume, and basicaly simpler to make film.

[Canney]

I do metal work a lot and make jewlery and the price of silver and solid substance materials has gone up. Kodak hasn't really raised its prices on film for a few years now and I guess its time for them to do so. You can only eat something for so long until you eventually go into the red. They probably need to do this to stay a float in the increasingly digital world.

 

When you also look at Kodak's stock pricess it was like $100 a share in 1998 and nowerdays it around $25 dollars a share I believe. You got like two things contributing to the price hike. The increasing number of people buying and using digital and HD equipment and cameras. Then the raw materials increase. The average consumer just doesn't go for film nowerdays like they used to and a lot of motion pictures are now shoot with digital HD equipment. Expensive Digital electronics have caught up to film in terms of quality. But think of the advent of home video versus home film in the 1980's. Quicker and instant and a lot more space to record on. So who cares if film has a lot better quality is the attitude a lot of people have, they just want their photos and videos on demand, instantly like that regardless there of.

 

I am just glad they aren't hicking motion picture film up that much. 3-5% I could deal with that in my Super 8mm world.

Edited April 21, 2006 by Canney

[Guest Jim Murdoch]

It's been quite a few years since the last general price increase. Price increases for selected motion picture films will range from 3% to 5%.

 

Over the past year, Kodak has been absorbing unrelenting increases in the costs of raw materials used to manufacture film, including silver (almost doubled in price in the last year!) and petrochemicals. Other costs tied to the escalating price of energy -- including transportation and packaging-- also have increased. These pressures have reached a point where they can no longer be offset by Kodak's ongoing productivity programs.

 

Kodak remains committed to its film customers and to supporting the diverse imaging needs of consumers, professional photographers and filmmakers.

I have no argument one way or the other about this, only the ironic timing of the announcement! In any event, as a percentage of the overall cost of making the average feature film, raw stock costs (ie without processing etc) make up only a very small contribution. These small price rises would barely amount to a smudge on the bottom line.

[John Pytlak RIP]

If the price of print stock climbs "too much", there will be more preasure on the theatres to install DLP. (perhaps the production/distribution folks will ask a surcharge to theatres that want real prints..)

 

Kodak also offers state-of-the-art technology for Digital Cinema:

 

http://www.kodak.com/go/dcinema

 

Even though Digital Cinema has been around since 1999, there are still only about a thousand screens worldwide equipped to show features using Digital Cinema projection, compared to over 100,000 screens showing 35mm FILM prints. 2005 was a record year for motion picture film volume.

 

Many of the current Digital Cinema business models have a "virtual print" fee being paid to offset the high capital cost of installing the equipment and Digital Cinema infrastructure.

[Canney]

I guess all I can really say is you got to keep up with inflation and the times.

[James Steven Beverly]

Hey if Kodak pisses you off too much, there's always Fugi.

[John Pytlak RIP]

Hey if Kodak pisses you off too much, there's always Fugi.

 

Yes, there is always "Fugi":

 

http://www.fugi.com ;)

 

Seriously, these relatively small price increases are a last resort, and are not done to "piss off" customers. During the last year, the price of silver and oil-based plastics have increased tremendously, much more than Kodak's modest 3 to 5 percent price increase.

[James Steven Beverly]

I seriously doubt, John that your's will be the only company forced to raise prices. I think people are gonna see a price hike in EVERYTHING in the next 6 months. Good o' G.W.

[Nate Downes]

Expect the price on digital cameras to go up 15-20% over the next few months. The plastics used in construction, plus the cost to ship from China/Japan (name me 1 digicam made in the US, just 1, PLEASE!) is about to kill off the "low-cost digital camera" segment. Hell, if GW does get his wish of de-coupling the Chinese currency, expect a 40% price increase *on top of* the 15-20% price increase. Way to go.

 

And here I am, still shooting with my 1961 Honeywell Pentax 35mm as my co-workers complain about the cost of having to buy a new camera every 8 months to remain competitive in the marketplace.

 

And soon I'll have a 1909 Kodak model 1A to shoot with as well.

[Canney]

I keep my film tech personally in the 1970-1980's model wise. I would just like to post the correct web address for fuji film.

 

http://www.fujifilm.com/

 

As far as the price of oil products, oil has gone up to $70 dollars a barrel. Gas in my area M.A. is $3 a gallon and out in california its hit $4+. For M.A. its expected to hit $4-5 this summer and a few months ago it was only $2 gallon. If anything blame the raw materials people. A small increase in 3-5% for motions picture film for the first time in a couple years with the cost rise in raw materails and stuff, Kodak is kind of doing us a favor by not raising it even more. Still sucks though but hey what ya going to do.

[Mike Welle]

And let's not forget how Eastman Kodak contributed $92,875.00 to the Republicans:

 

http://www.buyblue.org/directory/e

 

I hope that doesn't put me on their wiretapping list for that comment.

 

Fuji doesn't have any political party affiliation. They also make 200' spools that are B-wind that actually fit my camera.

 

Thank you Fuji. :)

 

Mike Welle

Charleston, SC

 

I seriously doubt, John that your's will be the only company forced to raise prices. I think people are gonna see a price hike in EVERYTHING in the next 6 months. Good o' G.W.

Edited May 15, 2006 by Mike Welle

[John Pytlak RIP]

FWIW, many of Kodak's US employees are Democrats, including me! B)

 

Last Thursday evening (May 11), the Monroe County Democratic Committee nominated its slate of candidates for the November elections, and I was among the hundreds of Democrats there. I've enjoyed rallies when Ted Kennedy, Hillary Clinton, Venessa Kerry, and John Edwards visited Rochester. My wife and I are planning on attending a fund raising dinner in Rochester with James Carville as the keynote speaker on May 24. New York is a "blue" state, and the winds of change are blowing elsewhere.

[Mike Welle]

John I know you're a good guy, I just question the intelligence of a company that gives 70% of its contributions to a party and a "President" that presides over an economy that hasn't even gotten the Dow Jones above where it was in 2000 (when Bill Clinton was in). Makes a lot of sense. Get those tax breaks in for the rich. Let's think in the short term, not the long term...that makes a lot of sense! The old invisible hand and Adam Smith! Trickle down economics.

 

Mike Welle

Charleston, SC

 

 

 

FWIW, many of Kodak's US employees are Democrats, including me! B)

 

Last Thursday evening (May 11), the Monroe County Democratic Committee nominated its slate of candidates for the November elections, and I was among the hundreds of Democrats there. I've enjoyed rallies when Ted Kennedy, Hillary Clinton, Venessa Kerry, and John Edwards visited Rochester. My wife and I are planning on attending a fund raising dinner in Rochester with James Carville as the keynote speaker on May 24. New York is a "blue" state, and the winds of change are blowing elsewhere.

[John Pytlak RIP]

John I know you're a good guy, I just question the intelligence of a company that gives 70% of its contributions to a party and a "President" that presides over an economy that hasn't even gotten the Dow Jones above where it was in 2000 (when Bill Clinton was in). Makes a lot of sense. Get those tax breaks in for the rich. Let's think in the short term, not the long term...that makes a lot of sense! The old invisible hand and Adam Smith! Trickle down economics.

 

Mike Welle

Charleston, SC

 

I assume that means the other 30% goes to the "good guys"? ;) I suspect the mix of political contributions of any large corporation is determined by which party is in power, as they are the ones who "write the rules" that determine the business climate.

 

Kodak's contributions to charitable and other causes is much greater than any political contributions:

 

http://www.kodak.com/US/en/corp/community.shtml

 

Eastman Kodak Company has an active community relations and contributions program designed to support the achievement of company goals. As such, programs and initiatives are focused to instill employee pride, build public trust, foster education, respond to community needs and enhance company image.

Kodak support takes many forms and is based on its corporate values: respect for the individual, uncompromising integrity, trust, credibility and continuous improvement, personal renewal and recognition and celebration.

 

http://www.kodak.com/US/en/corp/principles...nduct.shtml#gov

 

Political Activities

The company will not make political contributions (including in-kind contributions such as the use of corporate facilities or personnel) unless permitted by applicable law, and approved in advance, and in writing, by the company?s Director and Vice President, Communications and Public Affairs.

 

Since an employee?s political activities could be attributed to the company, employees must, before engaging in any political activity, including fundraising activity, that occurs during working hours or that involves the use of company facilities or personnel services in connection with such political activity, obtain the prior written approval of the company?s Director and Vice President, Communications and Public Affairs.

[Brad Grimmett]

John I know you're a good guy, I just question the intelligence of a company that gives 70% of its contributions to a party and a "President" that presides over an economy that hasn't even gotten the Dow Jones above where it was in 2000 (when Bill Clinton was in).

Mike Welle

Charleston, SC

I am by no means a Republican....but it's important to know the facts. The Dow was very recently at or very close to an ALL TIME high. I'm not sure where it is right now. But the status of the Dow alone says very little about how good or bad a president is doing.

[Mike Welle]

And that all time high was at 11,722.98 (intra-day high 11,908.50) when Bill Clinton was in. Are you saying that I don't know the facts? What of what I said was incorrect? Did I ever say the status of the Dow alone says everything about how good or bad a president is doing? What I'm saying is that if you have a president where the Dow goes from 3,500(?)to 11,722 in his presidency--that is a very big boon to him. When Bush got in the Dow was at 11,200 and now it is at 11,428. When Bush came in, he inherited a huge surplus, and immediately gave a giant tax cut to the wealthiest 1% destroying the surplus. Al Gore would have put this money in a lockbox (people laughed at the time). Lets not forget the surplus and the fact that the man was a Rhodes scholar, and was super-intelligent, and actually cared about the common man.

 

Look at this quote from Wikipedia:

 

Despite occasional political troubles, Clinton remained popular with the American people. In addition to his political skills, Clinton also benefited from a very skillful management of the US economy. In 1999, the United States had a projected federal budget surplus for the first time since 1969. By 1998 it was a $70 billion budget surplus. While Clinton, Congress and the private sector have all been given credit at different times, this economic success was a source of immense political strength for Clinton. He remained popular through and beyond the end of his terms in office.

 

Mike Welle

Charleston, SC

 

I am by no means a Republican....but it's important to know the facts. The Dow was very recently at or very close to an ALL TIME high. I'm not sure where it is right now. But the status of the Dow alone says very little about how good or bad a president is doing.

Edited May 15, 2006 by Mike Welle

[Mike Welle]

What I'm talking about:

 

http://www.legalhardware.com/economics/charts.htm

 

Mike Welle

Charleston, SC

 

I am by no means a Republican....but it's important to know the facts. The Dow was very recently at or very close to an ALL TIME high. I'm not sure where it is right now. But the status of the Dow alone says very little about how good or bad a president is doing.

[Phil Thompson]

democrats, republicans.. whats the difference.. Its like republicans are big macs and democrats are whoppers.. u get a bit more salad with the whopper.

 

George bush and kelly are members of skull and bones... its all darkside mason devil worshiping.

[Brad Grimmett]

Mike,

The last thing I want to do is have an argument about this. I was merely commenting on the fact that the performance of the Dow isn't the only thing that determines whether a president is doing a good job or not. I was never attempting to say that you didn't know the facts. Your argument was that Kodak shouldn't give money to the Republicans based on the performance of the Dow. There are and were many different issues involved with the economy, some of which were and are effected by our current and past leadership and some that aren't and weren't. These are complicated issues. Whether Kodak makes contributions to one party or another doesn't matter. It's up to their own leardership to do as they please with their money. The stockholders will decide whether they like it or not, and buy and sell their stock accordingly. I guess I just don't see the connection you're trying to make.

[Mike Welle]

I vehemently disagree. I will concede that Hillary has not stood up to George W. with voting for the Iraq war and domestic spying, but the very fact that you could ignore Bill Clinton creating 20 million jobs for people and Bush creating a total of 5 million (4X) essentially equivocating Democrats and Republicans deserves a hard, hard second look. Just to clarify out of respect, its spelt Kerry not "kelly."

 

Sincerely,

Mike Welle

Charleston, SC

democrats, republicans.. whats the difference.. Its like republicans are big macs and democrats are whoppers.. u get a bit more salad with the whopper.

 

George bush and kelly are members of skull and bones... its all darkside mason devil worshiping.

[Phil Thompson]

I vehemently disagree. I will concede that Hillary has not stood up to George W. with voting for the Iraq war and domestic spying, but the very fact that you could ignore Bill Clinton creating 20 million jobs for people and Bush creating a total of 5 million (4X) essentially equivocating Democrats and Republicans deserves a hard, hard second look. Just to clarify out of respect, its spelt Kerry not "kelly."

 

Sincerely,

Mike Welle

Charleston, SC

 

 

you didnt address the fact they are both Skull and bones members. With all due respect are you aware of Skull and bones?