Kodak has a history of developing new technology and then pulling out of the market when execution demands commitment. Those who read my bi-annual Industry Reports know that the demise of Kodak Digital Cinema was inevitable – only the timing remained to be learned. So it came as little surprise that Bob Gibbons, the division’s Director of Marketing, announced this month the shutting down of Kodak Digital Cinema. Gibbons said that the company will concentrate on services and licensing activities in the digital cinema space. In practice, the company will continue to support its advertising footprint, but will cease its product development effort.
Bob’s public statements indicate that the trigger for the change of heart inside Kodak was the fact that DCIP was going forward with its funding. A more likely trigger is that the company’s attorneys, after years of negotiation, have finally come to executable agreements with studios over Kodak-sponsored deployments. The company would have to either sign the agreements and commit capital and/or assets to fund digital cinema deployments, or simply walk away. Given that the company recently raised $700M in new debt to improve its ability to pay off existing debt, it’s not surprising that it chose to walk away.
Kodak’s commitment to digital cinema has showed cracks at many junctures. Back in 2001, when pursuing projector technologies, Kodak had a major acquisition lined up in that space, only to pull out at the last minute, according to parties close to the deal. Readers may recall Glenn Kennel’s departure, which occurred shortly after. Kodak’s next crack appeared with the departure of Entertainment Imaging Division president Eric Rodli in early 2007. Eric had lined up acquisitions to take the Kodak brand into alternative content and cinema advertising. But in the end, management didn’t want to commit, and pulled the plug on the first acquisition. Eric announced his departure in early 2007, saying that the company would continue with its plans to build a maintenance services group. While the storyline given today is consistent with that given by Eric 2