Kodak focuses on indies to bolster movie film business

ROCHESTER, N.Y. — Christopher Nolan shot Interstellar on Kodak-made film. Steven Spielberg did likewise for Lincoln. Quentin Tarantino's Django Unchained and his upcoming Hateful Eight both use Kodak film.

But the future of Kodak's once-mighty movie film business might lie not in big names and big productions but among the ranks of small, indie films and filmmakers.

Eastman Kodak Co. earlier this year launched in the United Kingdom its Kodak Independent Production Package — essentially a movie-making kit that includes a camera and film as well as processing and telecine services for transferring the film to video. And it plans to expand the Production Package later this year to the United States. During the Sundance and Slamdance film festivals held in January in Utah, Kodak was there handing out awards to filmmakers.

"We're very tuned in to the independents," said Andrew Evenski, president and general manager of Kodak's entertainment and commercial films business. "We're trying to bring people back into the fold, saying film is available to you."

Welcome to what Kodak hopes is the third act of the story of its film-making business, wherein after flying high and going through its precipitous fall, Kodak experiences somewhat of a comeback — or at least a leveling off.

Motion picture film long has been big business for Rochester-based Kodak. Its transparent roll of film, put on the market in 1889, made possible Thomas Edison's motion picture camera two years later.

But 100-plus years hence, the same digital technology that crushed Kodak's photographic film business also has chewed up much of its entertainment imaging work.

George Lucas' Star Wars Episode I: The Phantom Menace was shot both on film and with high-definition digital cameras. And when it came out in 1999, it was the first widely released feature film to be shown digitally.

That marked the beginning of hard times for Kodak's film manufacturing business. In 2014, the company turned out roughly 450 million linear feet of film for producing and showing motion pictures. That's roughly 1/28th of the motion picture film the company produced in 2006.

For the first nine months of 2014, what the company calls its "mature businesses" — a catch-all for everything from motion picture films to the inkjet cartridges it still makes for its discontinued line of desktop printers — represented $259 million in sales, down roughly 30 percent from what the company did in the first nine months of 2013.

While consumer inkjet "has done modestly better than we expected ... film has done modestly worse than we've expected," CEO Jeff Clarke told Wall Street analysts. The company's year-end 2014 numbers are scheduled to be released Monday.

All that came atop Kodak's 20-month Chapter 11 bankruptcy that wrapped up in September 2013.

But then came some rare good news. The company in February signed film supply agreements with the six major Hollywood production companies — 20th Century Fox, NBC Universal, Warner Bros. Entertainment, Sony Pictures, Paramount Pictures and Walt Disney Co. — that saw them agreeing to continue to buy film well into the future.

"With the agreement with the industry and our new efforts to promote motion picture film, we expect further declines to be less significant," company spokesman Christopher Veronda said.

That foreseeable future, however, looks increasingly like the LP record industry — LPs being a similar piece of 20th-century technology still holding on in the 21st, though a shadow of what it was before the advent of cassettes, CDs and now digital streaming.

Kodak is no longer doing R&D into updating its film products with new lines. The employee headcount dedicated to film manufacturing is a fraction of what it once was. And the company is looking to its film business to fill in the gaps and keep the machinery running as it tries to build up its functional printing work, using that same huge infrastructure of coaters and perforators and other specialized equipment for making such products as solar cells or computer touchscreen films.

However, Evenski said, the company is considering bringing back some discontinued products. And the decline in its 16mm film has leveled off, he said.

"Is (film) a niche business? Is it a lot smaller than what it used to be? Yes," Evenski said. "But it's still a very important business for Kodak.

The digital woes are not Kodak's alone. Kodak's main film business rival, Fujifilm, quit making most of its motion picture films in 2013. And New York City's last film processing and printing lab, Film Lab New York, closed its doors at the end of 2014.

Richard Crudo, president of the American Society of Cinematographers, said the decision to shoot digitally or on film usually revolves around finance.

However, he added, with labs that can handle developing and processing film few and far between, "Most people are extremely dubious about shooting film and look to digital as the default choice."

Yet film still has a strong cachet, particularly among starting-out cinematographers, Crudo said.

"I find that the majority of fledgling cinematographers have a burning desire to shoot film," he said. "They feel it legitimizes them because it requires a true vision to execute properly. As to the future of film, I'll always love it and wish there could be a future, but. ..."

While the bulk of Kodak's film output is used at movie theaters for projection, there are fewer projectors even able to handle film.

Evenski said the percentages of theaters that have converted to digital projectors range from the mid-90s in the United States to 65 to 70 in Latin America.

Evenski said that along with targeting indie movie makers, the company hopes to find natural allies with the remaining indie movie houses that haven't yet gone digital.

"I want to talk to the independents and studios together," he said. "I met with one of the independents and said, 'If you had to pick 12 films, I'll try to go through the studios and say we have to print these.'

"And we want independent (moviemakers) to aspire to be like Christopher Nolan and J.J. Abrams — use film, separate your project from the digital landscape, make it different. Almost like 'Get into the club.' "

Daneman also reports for the Rochester (N.Y.) Democrat and Chronicle