As reported by Reuters, and several other news media, film giant Kodak has filed for bankruptcy primarily due to extensive costly relationships with Hollywood film companies, and the demise of 35 mm film.
The bankruptcy has sent shock waves from Wall Street to Hollywood as rumors of the decades-long relationship between Kodak and Hollywood filming may be cut back.
Things began to change for Kodak in the 90’s as digital technology took the foreground over simple 35 mm film.
Currently a significant amount of film is still being provided to Hollywood.
The Kodak Theatre, home of the Oscars, is an iconic landmark – but its future use remains unknown. Speculators believe that the Academy of Motion Picture Arts and Sciences may now use an option in their contract that they’ve always had – to find a new home for their award show.
Branding expert, Adam Hanft, said, “I don't think it's good branding at all for the Oscars to be associated with a bankrupt company.”
Major film studios are listed as Kodak’s greatest unsecured creditors. Sources in the Hollywood film industry claim that a fear of not being repaid has caused studios to seek out alternative film companies to buy from.
Kodak’s top 50 unsecured creditors are as follows: $16.7 million to Sony, $14.2 million to Warner Brothers, a little less than $9.3 million to NBC Universal, $6.8 million to Paramount Studios and $4.2 million to Walt Disney Studios. All of the spokespersons for the studios have denied to comment.
Sources also claim that a majority of the debts are from contracts related to a film rebate system. Studios that bought film from Kodak on a per-picture basis – where Kodak would reduce the price for studios needing to purchase more – caused an influx of rebates.
In anticipation of the bankruptcy, one source stated that studios not only hoarded larger amounts of Kodak film, they also began relationships with other film suppliers such as Fuji.
In it’s heyday, experts estimate that Kodak generated approximately $500 million annually in film distribution for motion pictures, they set the standard for 35 mm film and won several Oscars for technical achievement.
George Eastman, the founder of Kodak, was made an honorary member of the Academy of Motion Picture Arts and Sciences.
The CEO of Cinedigm, who was also the former COO of MGM, Inc., Chris McGurk, said that by the late 90’s the advancements being achieved in digitized filmmaking left Kodak behind the times. Film studios, filmmakers and theaters joined the bandwagon, and soon the 35 mm film was no longer a hot commodity.
McGurk said, “Kodak failed to recognize the game-changing impact the digital technology would have on the film-making business. Those who didn't see it have fallen by the wayside. It's easy to see how that could happen. Industry has been resistant to change and projection film on 35 mm had been happening for 75 years but the fact is that the world has changed and digital takes enormous costs out of the distribution system.”
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