From Bankruptcy To Billions: The Rebirth Of Kodak

Hook: Kodak was once a $30B company that dominated 90% of the camera market.  But after blundering digital cameras they slowly bled market share and money, eventually  filing for bankruptcy in 2013. For most, that would be the end of the story.

But not  Kodak. 11 years later, Kodak’s revenue is soaring over a billion.  Here's how they did it.

Chapter 1: Bankruptcy Setup (Play clip: 0:05-0:11) Eastman Kodak’s bankruptcy was a long, painful process, totalling 19 months.  By 2013, one thing was clear: Kodak needed to move away from cameras. Despite creating the  digital camera, they failed to capitalise on it, and now it was too late. 

Tension As they entered bankruptcy, Kodak's Liabilities  were $6. 75 billion. Their bankruptcy process was able to eliminate $4.

1 billion of this  debt, but they still had over $2. 5 billion left over. That’s still a lot of debt.

Initially, they tried to sell their digital patent portfolio. They hoped  this would provide them with $2 billion, but the actual figure was $527 million. Much of the debt was owed to the “UK Kodak Pension Plan”.

It’s a bit complex, but imagine  this is a different entity which represents Kodak’s pension obligations, specifically,  $2. 8 billion. Kodak didn’t have the money, but they did have some assets.

They sold their imaging and document units to Kodak Pension Plan for $650 million.  It was much less than the claim, but luckily, they agreed to drop the remaining $2. 1 billion.

There were still a lot of outstanding claims, but Kodak agreed to pay these out after exiting  bankruptcy. This included a $895 million financing package with JPMorgan Chase & Co. But there  were still quite a few creditors, who only received a few cents back for every dollar.

A lot of people lost a lot of money. But still, many were banking on Kodak surviving and  becoming profitable. But would this be enough to exit bankruptcy?

Resolution / Payoff All of this was overseen by a federal bankruptcy  judge. A plan was drawn up that was supported by most of Kodak’s creditors, despite quite a few  objections from shareholders and other creditors. On August 23, 2013, the judge  dismissed the objections, and approved Kodak to exit  bankruptcy.

He stated that "This comes on a day when many  are losing retirement benefits, and many are finding that their recovery as  a creditor is just a minute fraction of what their debt is. But I cannot decree a larger  payment for creditors or any payment for shareholders if the value is not there. ” (source) Kodak’s lawyer also said that Kodak will be “a very different company than the one in the popular  imagination, and a very different one than the one that filed for bankruptcy” (source).

Without cameras, what would Kodak do? How would they make money and pay off their debt? They were emerging into new waters, and the one thing they desperately needed… was a good leader.

Chapter 2: A New Captain Setup On March 12, 2014, Kodak appointed a new CEO: Jeffrey J. Clarke. Clarke had a diverse  background before Kodak, including leadership positions in HP, Travelport, and Orbitz.

But  most of all, he had experience in change. Once appointed CEO of Kodak, he had two  immediate priorities, and the first was a bit surprising. Tension (Play clip: 5:44-6:05) Clark’s first action reflected his deep respect for Kodak’s employees: he listened to them.

My first priority is to spend my time listening to Kodak’s employees, customers, partners  and other stakeholders as part of a detailed evaluation of our operations, market  opportunities and approach for success. He wanted input from staff.  To him, they were the experts.

This was important, because it  coincided with his next priority. Resolution / Payoff Kodak had failed because it didn’t keep up with the market.  They invented digital photography, but were too slow to capitalise on it.

Clarke wasn’t about to let that happen again. His second key priority was  a focus on innovation at a pace. (Play clip: 6:25-6:42 (end on “move fast”) Kodak was massive, but bloated, weighed down by bureaucracy and red tape.

Clarke cut  through this, making it easy for employees and managers to innovate and share ideas. He brought the “fail fast” mentality, which can come with problems, but it’s what Kodak needed. “We have gone from a company that once had more than 100,000 employees to about 8,000  employees worldwide.

As a smaller company, we have a bias for speed and agility that a  company with 100,000 people often does not have, and that is a competitive advantage. We  have an incredible patent portfolio and an engine that is creating more. ” (Source show page onscreen) All of this was great, but it didn’t  matter if their strategy wasn’t good.

Kodak needed a strong focus if they  wanted to survive. So what did they do? Chapter 3: Chartering a New Direction Setup (Play 2:09-2:38) Clark was paying attention to customer behaviour and how it was changing. 

He  expected there to be some demand for traditional cameras, but this would never be as big as it  had been. Kodak needed to shift their attention. Before Clarke joined, Kodak’s team was hard at  work, building something new.

Amidst bankruptcy, they didn’t have heaps of capital,  but they did have some assets. Namely, their Stream Inkjet Technology.  Since they made film cameras, their ink and printing technology was excellent. 

They also had many patents related to imaging. But there was one problem. Consumers weren’t  interested in these products and services.

Tension Though there was a major opportunity elsewhere. Kodak had dipped  their toes into the world of commercial printing, but hadn’t yet fully committed. They had all the technology and expertise to dominate this industry.

So they got to work.  With a nimbler, faster Kodak, they restructured to focus entirely on digital printing for  large businesses. Their new market would be massive corporate clients that needed  packaging and commercial printing of the highest quality, en masse.

Resolution / Payoff On February 11th, 2013, while still navigating  bankruptcy, Kodak unveiled their latest creation: The Prosper 5000XLi Press Printer. A massive industrial machine, which could print 650 feet per minute, up to  90 million A4 pages a month. It could measure performance and make real-time adjustments,  meaning prints never needed to stop.

It had quantity, but it was also higher quality. It used newly formulated nano-particulate pigment inks, offering a color range  30% wider than offset printing. The Prosper 5000XLi was the best of the best.

It  had the fastest, most accurate writing engine on the market. Kodak didn’t just want to enter  the industry, they wanted to dominate it. The question is, was it  enough for Kodak to rebound?

Chapter 4: Momentum Setup The 5000XLi was a huge leap forward, but  it wasn’t enough. Coming out of bankruptcy, Kodak was still unprofitable. But  they had momentum.

Not only that, with Clarke’s leadership, and focus on innovation,  they were in the perfect position to thrive. So they kept going. They went  all in on commercial printing Tension In June 2014, they released the Prosper 6000, a massive  leap forward, in a very short amount of time.

It could print 1000 feet per minute,  much more than the 5000XLi. Not only that, it had better drying capabilities, and  even nano-particulate pigment inks, giving businesses even wider colors. It offered all of this, and it was cheap.

At less than $0. 005 per color A4 page. They  were catering to the needs of their customers, and they did this further by offering multiple  models.

The 6000C for commercial printing, and the 6000P for newspapers or publishing. Invideo AI Have you noticed a quality upgrade on  the channel over the past few months? One of the biggest changes we’ve made is  minimizing the stock footage within videos.

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Thank you to Invideo for sponsoring this video.  Resolution / Payoff Kodak was now moving at full speed. They  hit the mark in the printing industry, and it was paying off.

After emerging from  bankruptcy in 2013, still carrying debt, they recorded their first annual  profit just three years later. That is unbelievable. Kodak had  turned things around spectacularly, and quickly.

And this was just the beginning. In 2022, they announced the Prosper 7000. It was ”the world's fastest digital press," printing  at speeds up to 1,345 feet per minute”, more than double the 5000XLi.

Their printing division  was a massive success, yet simultaneously, another area was slowly growing. Over the years, there was a strong, devoted group of customers, who loved  shooting film. A niche, but a growing niche.

Younger generations found film more authentic and  personal than digital. Analog offered a unique experience when it came to shooting photography. (Show headline) Film photography was making a comeback, and it’s still growing.

Clarke’s prediction from many years ago was completely accurate. Not just amongst hobbyists, but professionals too. (Play clip: 14:50-15:09) Many high profile directors also swore by Kodak’s quality.

Christopher Nolan’s Oppenheimer,  which won 7 academy awards, was shot on Kodak 65mm film. Other directors including Quentin  Tarantino and Steven Spielberg commonly use Kodak. By this time, Clarke had stepped down from  his position.

Not because of any scandal or conflict. He had turned Kodak around, and now  that it was thriving, he was no longer needed. Grand Payoff In 2023, Kodak reported revenue of $1.

1 billion, with an net income $75 million,  $49 million more than the previous year. They are a very different company, but some parts of  them are still the same. They had a deep focus on innovation, research, and the core parts of their  business like printing are still there.

They just needed the right leadership, and strategy. Many people talk about how Kodak failed, but few mention how they bounced back.  Their experience is the same as Nokia, who failed to capitalise on smartphones, but  after losing everything, are in a totally different market.

One that’s quite surprising. If you want to watch that story, click this video.