What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing in today's video we're going to be taking a look at one of america's greatest companies of the 20th century. Eastman kodak kodak was one of the most iconic and respected american corporations, starting in the late 1800s, but by 2021 it had fallen to become a microcap stock, with no recognizable product on the market. What made kodak great and how did it rule industrial america for 100 years and what happened to lead to its incredible fall? We'll be answering all of those questions in today's video, the eastman kodak company was founded by george eastman in 1888, the name kodak, which is more commonly known, as is not the name of any co-founder. It is just a made-up word that george eastman devised.

He chose the name due to its distinct, sound and easy pronunciation, as well as its lack of resemblance to any other company. He started out by selling the kodak camera his original 25 camera. It was similar in style to one of the old cameras that you might see in movies a fairly large black box with a lens on the front. The kodak camera was the first commercially available camera that was sold at a price point accessible to the general public, because of this kodak has been credited with starting the era of consumer photography.

Even at this point, george eastman's business acumen can be seen. He had already started kodak operating on a razors and blades model. People would buy his camera for a low price of 25 dollars. Adjusting for inflation.

25 was a lot of money at the time worth about eight hundred dollars today, but it's comparable to top-of-the-line cameras today, which are frequently used by non-professional photography enthusiasts, with a significant portion of the population able to afford this exciting new technology. Kodak had its foot in the door to create a powerful, recurring revenue stream. Each camera came with one roll of film which had to be sent back to kodak for development. Each development cost the consumer 10 or about 300.

Today, adjusting for inflation. This effectively shifted the cost of ownership of a kodak camera backwards in the life of each unit, sold encouraging customers to buy with the allure of a relatively low initial price. Throughout the 1900s kodak enjoyed market dominance in film and photography in the early 1900s. Several competitors in the camera industry arose in response.

George eastman turned his competitors into friends by transitioning kodak's main business from camera to film this fully committed kodak to the razers and blades model and allowed it to take over the entire film market. Kodak's film built up a reputation of high quality at affordable prices and became ubiquitous even in non-kodak cameras by 1930 kodak had become an american industrial giant. It was added to the prestigious dow jones industrial average of the top 30 most prominent public companies in america. It remained a component of the dow for 74 years, one of the longest runs of any dow company to this day throughout the mid 20th century.

It continued to dominate industrial america, producing all sorts of diversified materials and products, ranging from hand grenades in world war ii. To super glue in the early 1930s george eastman was suffering from a degenerative disease affecting his spine. His mother is documented to also have suffered similar conditions in her old age, so it is possible that it was genetic. The symptoms of the disease included narrowing of the cartilage discs in between the vertebrae, as well as extreme chronic pain by 1932.

The pain had become so unbearable that eastman committed suicide. He famously left a note saying quote to my friends: my work is done. Why wait after george eastman's death kodak lost its way in business? It was not apparent just how badly, because kodak continued to enjoy huge corporate profits for decades. After, however, this was only due to the privileged position that george eastman left the company in at the time, management did not realize how favorable of a position they were in to have created and cornered a new segment in the consumer and commercial film industries.

Eastman had even found a way to make the company protected against competitors in the camera industry by steering the company towards the recurring revenue model of selling film. Instead, but two years after his death, the seeds of kodak's eventual destruction were sown in a small country. Halfway around the world, fuji photo film company was founded in 1934, as a company focusing on the film industry for photography and movies. Their business was originally confined to their home country of japan, but after world war ii it diversified both its product offerings and its reach.

Internationally, building off a strong base in japan, where it held a monopoly on film, they eventually were able to challenge kodak in the us throughout the 60s, 70s and 80s. They built a small presence in the u.s film industry, but kodak's legacy was too strong for them to overcome at the time by the 90s. Their aggressive marketing in the us and a general acceptance of japanese-made products allowed them to build a reputation as being a viable alternative to kodak's film. But kodak's demise would come not from losing ground in the film industry to fujifilm, but from being unwilling to adapt.

When film finally went out of style in 1975, kodak engineer, steve sasson invented the first self-contained digital camera. Despite the fact that superiors had asked him to build the camera and the fact that the device was so successful, kodak decided to bend the project for fear of it disrupting the film business. They realized that the digital camera was an inherently better product than the film camera and that if digital cameras were commercially available, consumers would switch to digital completely years later. Kodak ceo antonio perez would call digital cameras, a quote crappy business, unquote due to the fact that anyone with a good engineering team can make a digital camera, and after the consumer buys a camera, there is no revenue afterwards.

So for the rest of the 20th century. Kodak milked its position as the larger member of the kodak fujifilm duopoly in film. During this time, they made billions of dollars in profits and produced some of the most cutting-edge technologies in the industry, including multi-layer, organic led displays and advanced camera technologies. Ever since steve assassin invented the digital camera, it was only a matter of time until the film camera industry dried up, unlike kodak fujifilm, recognized this reality and adapted starting in the 1980s.

They embarked on a strategy to milk, the lucrative film industry for as long as possible, while the same time preparing for a switch to the digital camera industry when the digital camera. Finally, supplanted film in the 2000s fujifilm was prepared. They captured a significant portion of the new industry but, more importantly, diversified away from the camera industry altogether. Today, according to statista fujifilm, has captured about five percent of the digital camera.

Industry kodak, on the other hand, has none of it. The film industry peaked around 2000 and by 2010, had almost completely collapsed. In 2004, kodak announced that it was forced to exit the film industry in europe and north america also in 2004. Kodak's stumbling share price caused it to be deleted from the dow jones industrial average.

They finally acknowledged that, 72 years after george eastman's death, his legacy in the film industry had run its course. Kodak would have to look to other business ideas if it wanted to remain a profitable company throughout the early 2000s kodak strove to find an edge in the digital camera, commercial, printing and especially the inkjet printer markets. But none of these industries have the recurring revenue qualities of the old film industry. Their largest market was the commercial inkjet printer market, where they used their brand name to become a major competitor to hp's home printer business.

However, instead of adopting hp's model of selling cheap printers and charging high prices for ink cartridges, they attempted to gain favor with the public by charging higher prices initially for the printers and reduced prices for the inc. Although a worse business model, kodak hoped that the savings to the consumer over time would allow them to gain market share in the early 2010s, kodak went all in on the strategy, but unfortunately did not work. Consumers continue to buy the lower priced hp printers, despite the higher cost of ownership due to the ink chances are that if you have an inkjet printer at home, it's made by either hp or another company besides kodak in 2012, kodak exited the consumer printer business around This time, kodak was experiencing an alarming loss in revenue. It still had a huge employee base from its glory days, but with its traditional business, decimated by the digital camera and their efforts to diversify into other businesses.

Ending in failure kodak effectively had no business left in a shocking turn for the company. In the span of less than a decade, kodak went from being one of the most profitable businesses in the world to having essentially no source of revenue, let alone profit in 2010. Kodak was removed from the s p 500. It burned through its remaining cash reserves and was eventually forced to declare bankruptcy later in 2012., in 2013, kodak was able to re-emerge from bankruptcy a much leaner company than before.

Since then, it has focused on commercial printing as well as a number of seemingly disparate businesses unrelated to its historical expertise. It developed a smartphone called the extra and even introduced its own cryptocurrency. It was called codeicoin and was originally conceived as a blockchain solution for paying for photography licensing. It was thought that people could somehow use blockchain as a more technologically advanced way to manage license agreements between photographers and media companies.

However, after bitcoin spike in 2017 and 2018 ended society's interest in blockchain subsided and interest in kodak coin, dried up. The project was cancelled before its initial coin, offering around that same time, kodak also appeared to attempt to tap the crypto boom by developing its own bitcoin mining device called the kodak cash miner. Although kodak claimed that the cash miner was never actually fully endorsed by kodak and that was actually mainly pushed by business partner, spotlight, kodak featured it at its booth at the 2018 consumer electronics show, after its debut reception, was so harsh that kodak removed its branding from The cash miner distancing itself from the project. The cache miner has since been remembered, mainly as an attempted scan.

Although the project was never actually launched by kodak at the height of the coronavirus pandemic, kodak appeared to have been offered a lifeline from then president donald trump trump's administration announced that they had loaned kodak three-quarters of a billion dollars in order to manufacture certain ingredients. Strategic for the kovit-19 vaccine effort on the news, kodak stock shot up 1500 percent. However, soon after the announcement, it was also revealed that the sec was investigating reports that kodak ceo had bought millions of dollars worth of stock. The day before the announcement developments in both the sec investigation and the stats of the loan are still waiting update with the loan having been stalled due to concerns about credit suitability for the loan.

Kodak today is an unrecognizable sliver of the powerhouse that it was throughout the 20th century. In 2020, its stock reached a low of 1.70 cents, a share, giving it a total market value of just 130 million dollars. Since then, uncertainty about the trump administration's loan to the company has kept the stock price up, but the company's business prospects still seem grim. It is unable to find a profitable business to compete in and has been making losses for the past decade in another decade.

This storied american corporation will likely have faded from society's memory all but entirely all right, guys that wraps it up for this video, if you like the content, make sure to like and subscribe, also leave a comment saying what you think about kodak in the meantime. Thank you so much for watching and we'll see in the next video wall street millennial signing out.