Upcoming Film Price Wars - Kodak vs. Fuji...

On 28 Sep 2004 18:09:46 -0500, (Bob Monaghan)
wrote:

Just two things...
....

The marginal profits for film even at discounted prices are still huge.
the price to manufacture a roll of film is in the pennies a roll range (as
in Kodak's example of costs of fifteen cents to make a disposable camera
in China with a roll of film in it versus $1 cost in USA).

Browning's page on making Dye Transfer Matrix film shows costs of
about $0.53 / roll US for film. That is without anti halation
coating, a 120 spool or the expensive printed backing paper (printing
is expensive and the opaque coated paper is a premium item). As he
says that most of the cost is silver, a commodity item, that puts the
cost of silver in a roll of film at over a quarter.

Since that doesn't agree with the statement of a few pennies a roll,
or a penny a roll, I need a reference.

....

In short, the film supply will remain large (maybe larger than now, given
China's expanding production for domestic/foreign sales), and demand is
falling (17% per year most recently). Hence, econ 101, prices have to
fall. ;-)

....

If you look at the cost volume and price volume curves in an Economics
textbook you will see that the opposite is shown. With the exception
of the fire sale to close out the inventory, when the market declines
the price goes up. Granted, the examples in economic text books are
over simplified for purposes of teaching, but the general rule holds
true.

the kodak press release was cited/quoted in the parent thread, describing
Kodak's rationale for moving production from USA ($1 disposable camera
cost) to China ($.15 disposable camera cost) for lower labor costs etc.
Should still be on kodak's investor press release site? or in above
thread?

your cite to Browning dye transfer (no URL):
I found this page by Browning on dye transfer:
http://mywebpages.comcast.net/hmpi/A.../dye_trans.htm

quoting above URL:
Materials Cost:

The cost of materials is about $8 per sheet of 30x40" film, most of the
expense is in the silver, I buy the inert photographic gelatin from Kind
and Knox in minimum 25 LB lots costing $ 10 / LB, and the polyester film
cost about $ 0.50 / foot of the 50" wide rolls. The Silver Nitrate is from
First Reaction at $ 277.00 / Kg.
endquote:


however, it should be fairly obvious that a guy making sheet film at home,
buying a bottle of silver nitrate and some gelatin, all at retail, is not
making film at the same cost as Kodak making 100,000+ rolls/batch. ;-)

Still, he estimates $8 for a 30x40" sheet, which is 1,200 square inches.
If you figure 24mm = 1", and 50mm or 2" per shot (36mm wide + 4mm spacing
+ slop for film ends), that's 1*2*24=48 sq. inches per roll of 24 exposure
35mm film. That's 25 rolls of high silver content film for $8, or 32 cents
a roll 24 exp., and close enough to $.53 a roll for 36 exp. per your
posting estimate for hand-made high silver content dye transfer film?

Not bad for a single square meter or so "batch" run at retail, but
obviously kodak does it a lot cheaper in huge bulk runs of thousands of
rolls ;-)

For one thing, many current kodak print films and others use little or no
silver, the major cost factor in the above home-made high silver content
dye transfer film analysis. Take out the major cost represented by silver
(90% or more or 45 cents of 50 cents per roll is silver cost) and the film
is in the pennies per roll range even when made at home (e.g., 10% * 53
cents/36 exp is 5.3 cents per roll for film (no silver but dye coupled)...

When the price of silver went up (Hunt brothers attempt to corner market
etc.), the highest silver content kodak film of the time (High speed
ektachrome 36 exp.) roughly doubled the price of the film based on less
than $.25 increase in film silver costs (e.g., $4 increase in film cost
for $.25 increase in cost of base materials). That implies a 16X or 1,600%
markup in film costs (See http://medfmt.8k.com/third/economics.html Ron
Schwarz post). The other lower silver content film prices represented even
larger markups, since Kodak and others took the excuse to jack up prices -
but didn't lower them much if at all after the price of silver dropped
down, right? ;-)

In short, this example suggests that an $8 retail high silver content high
speed ektachrome film cost ~$8/16 (16x markup on mfgering costs) or 50
cents to make - and 45 cents of that mfgering cost was for the silver
content (per Ron's posting), which was why the film retail costs doubled
when silver costs per ounce doubled.

That leaves 5 cents for the film base, emulsions (w/o silver), coatings,
spool, box, and all packaging and distribution costs and so on. The lower
silver content films now being produced should be even more profitable, as
the high cost silver has been replaced by some much lower cost dye
couplers etc. So the assertion that today's low silver content (print)
film costs are in the pennies per roll range seem reasonable.

Other industry sources have been quoted as saying that distribution and
packaging cost more than mfgering the film too. Again, this puts a
reasonable limit of pennies per roll on the cost of film to produce.

And the latest press release cited in this thread for disposable camera
costs further supports this idea. If you can make a camera in China for
$.15 cents with a roll of film inside it, you can't be paying more than
pennies a roll for film.

econ 101 My basic econ 101/102 courses note on Supply/Demand that if
supply is high, and demand is low and falling, prices are likely to fall.

As I noted, this is a major cash cow, with a 1,600% markup in the worst
highest silver content film case (low silver content films should be much
higher, obviously, since the costs are low but the film still sells at the
same high prices ;-)

Film is a commodity item, produced in whatever bulk they can sell it, with
the added complexity that film ages, so they have to sell it or lose it.
The economies of scale are fully realized at the single factory batch run
level for any given emulsion (e.g., ~100k rolls equiv.), with the
factories scaled to produce multiple emulsions using the same cutting,
rolling, packaging and other machinery.

regards bobm
--
************************************************** *********************
* Robert Monaghan POB 752182 Southern Methodist Univ. Dallas Tx 75275 *
********************Standard Disclaimers Apply*************************

(Bob Monaghan) wrote in message ...
the short answer is that film is made in meter+ widths on machinery which
is then cut down to required sizes, including sheet film and 120 or 35mm.

often, the same machinery is used to run a series of batches of different
film stocks which are then cut down and processed and sold over the next 6
to 18 months or more out of frozen film stocks.

snip

I was rather surprised when I read the introduction to Kodak's
technical publication P-255 (dated April 2003), about Professional
Technical Pan Film.

Advertisements by Adorama and B&H Photo-Video (retailers located in
New York City) in the October 2004 issue of "Popular Photography &
Imaging" magazine list Technical Pan film as being still available.

Yet, Kodak's April 2003 material states, "The last Tech Pan coating
was several years ago."

Imagine that!
The last production run of Technical Pan film provided enough
inventory for several years of sales.

That's what I consider to be real evidence of the declining demand for
a particular product.




Introductory material quoted:

"KODAK PROFESSIONAL Technical Pan Film is being discontinued due to
steadily declining demand over the recent years. Changes in product
components and our manufacturing processes make it impractical to
continue to support this product at its current low levels.

"The last Tech Pan coating was several years ago. Since that time, the
old coating room has been shut down, the gels used in the product
formulation have become obsolete, and we no longer manufacture the
ESTAR support on which the 35 mm product was coated. There would be
considerable cost to recreate the product, with no guarantee that it
would look and act the same as the Tech Pan Film of old.

"Technical Pan Film will continue to be available until the existing
inventory has been depleted."

(Bob Monaghan) wrote in message ...
the short answer is that film is made in meter+ widths on machinery which
is then cut down to required sizes, including sheet film and 120 or 35mm.

often, the same machinery is used to run a series of batches of different
film stocks which are then cut down and processed and sold over the next 6
to 18 months or more out of frozen film stocks.

snip

I was rather surprised when I read the introduction to Kodak's
technical publication P-255 (dated April 2003), about Professional
Technical Pan Film.

Advertisements by Adorama and B&H Photo-Video (retailers located in
New York City) in the October 2004 issue of "Popular Photography &
Imaging" magazine list Technical Pan film as being still available.

Yet, Kodak's April 2003 material states, "The last Tech Pan coating
was several years ago."

Imagine that!
The last production run of Technical Pan film provided enough
inventory for several years of sales.

That's what I consider to be real evidence of the declining demand for
a particular product.




Introductory material quoted:

"KODAK PROFESSIONAL Technical Pan Film is being discontinued due to
steadily declining demand over the recent years. Changes in product
components and our manufacturing processes make it impractical to
continue to support this product at its current low levels.

"The last Tech Pan coating was several years ago. Since that time, the
old coating room has been shut down, the gels used in the product
formulation have become obsolete, and we no longer manufacture the
ESTAR support on which the 35 mm product was coated. There would be
considerable cost to recreate the product, with no guarantee that it
would look and act the same as the Tech Pan Film of old.

"Technical Pan Film will continue to be available until the existing
inventory has been depleted."