Kodak Banking on Celluloid Having a Lot More Moments

As digital technology lures television and movie productions away from celluloid, film giant Eastman Kodak Co. released Tuesday a new type of film stock aimed squarely at movie makers in an aggressive bid to protect its $1-billion entertainment business and keep its most critical customers loyal.

For Kodak, Hollywood is home, a land where film has long ruled the day-to-day lives of generations of movie artists. The Rochester, N.Y.-based company has spent nearly a decade wrestling with a digital revolution, attempting to remake itself into a high-tech business without completely undermining its traditional focus.

“This is one of Kodak’s best businesses, with the highest market share and it’s most loyal customers,” said Peter Ausnit, an equity analyst with Deutsche Bank. “Clearly, digital imaging is having some impact on Kodak now. Their long-term outlook is incredibly challenging.”

Kodak’s worldwide sales to customers in the entertainment industry dropped 4% over the first nine months of 2002, compared with the same period a year earlier, according to its financial statements. Company executives blame the drop not just on changing technology, but also on the stalled economy and the threat of Hollywood union strikes in 2001.

“It is no secret Kodak is a company in transition,” Daniel Carp, Kodak’s chairman and chief executive, told Wall Street investors and analysts at a New York conference this fall.

The new Vision2 line -- a high-speed camera negative film that is particularly good for night shoots -- is designed to address complaints that cinematographers had made in the last few years, Kodak said.

Keeping influential cinematographers such as Allen Daviau happy is crucial to Kodak’s future success.

“It’s very important that they meet our needs,” said Daviau, a five-time Oscar nominee whom Kodak tapped to test its new film line. “Sure, we’d use the digital camera for certain things. But our heart’s with film.”

Simple economics is driving some productions to give up film, particularly in the television world. This fall, the major networks have 37 programs -- nearly 30% of their prime-time lineup -- shot with high-definition digital cameras, with more on the way at midseason. Last year only three shows were shot this way.

The reason is price. Typical 35mm film stock costs around 50 cents a foot, according to Ed Nassour, senior vice president of TV post-production at 20th Century Fox Film Corp. For Kodak’s Vision color film, one of its most popular lines and the precursor to Vision2, that translates into nearly $58 per minute of shooting.

A big-budget action movie with lots of live-action stunts can easily go through 300,000 feet of film, an expense of $175,000 or more. Developing and processing add even more costs, Nassour said.

By comparison, digital cameras often record images on inexpensive videotape. A typical 40-minute tape for a digital camera runs about $27. That works out to about 68 cents a minute.

Even advocates of film acknowledge that celluloid eats up a big chunk of a movie’s budget. On the last project that cinematographer Remi Adefarasin shot, the feature movie “Johnny English,” the crew used nearly 655,000 feet of film.

Nonetheless, “film has a magic that digital just doesn’t have right now,” said Adefarasin, who plans to use the new Vision2 stock on his next project.

Indeed, shooting digitally comes with its own set of problems. The current high-definition cameras are bulkier and capture less detail than 35mm film cameras. They also present a new set of creative and technical challenges -- for example, they have trouble handling sunlight streaming through windows -- and they tend to deliver a harsher look than film, cinematographers say.

“I don’t know one cinematographer who would choose digital over film,” said cinematographer Conrad W. Hall, who has worked on such films as “Panic Room” and “A Gentleman’s Game.” Cost-conscious “producers choose digital over film.”

Hoping to impress the cinematographer community -- and, in turn, put more pressure on producers -- Kodak said it regularly polls artists on their technology needs and asks them to test new film stocks months before they hit the market.

“They’re the ones who know what they want and need,” said Eric Rodli, president of Kodak’s entertainment imaging division, which is based in Los Angeles. “We’ve been testing this film [Vision2] quietly with them for the past nine months.”

Though Kodak’s traditional film business will remain its core, the company has made an aggressive push into the digital realm. Generally, it has focused on the display and printing side of the process. It also has developed plans to begin selling its digital-cinema projection system early next year for about $100,000 per screen.

Yet its plans have stalled, just as they have for other equipment manufacturers. Their hurdles include the exorbitant cost it would take to retrofit tens of thousands of movie screens with the high-tech projectors, and a reluctance among theater owners to invest in equipment that has no industry standard and could easily become outdated.