Kodak - and film - saying goodbye to the Oscars

Oscar banners flutter outside the Kodak Theatre in Los Angeles, which will host Sunday's Academy Awards. Eastman Kodak has forfeited its sponsorship of the venue as it struggles with bankruptcy.
Oscar banners flutter outside the Kodak Theatre in Los Angeles, which will host Sunday's Academy Awards. Eastman Kodak has forfeited its sponsorship of the venue as it struggles with bankruptcy. (AMY SANCETTA / Associated Press)
Posted: February 25, 2012

LOS ANGELES - Each year at the Oscars ceremony, Hollywood says goodbye to stars and filmmakers who've died. This year, the award show will bid adieu to the Kodak Theatre.

Just a decade ago, the glamorous 3,300-seat venue was touted as the Oscars' first permanent home, but the 131-year-old Eastman Kodak Co. has forfeited its sponsorship of the venue as it struggles with bankruptcy.

The move symbolizes Kodak's fading star power in Hollywood. Although seven of the nine "Best Picture" nominees were shot on Kodak film, the industry's increasing use of digital editing and projection has ravaged the company's printing business.

About half of the world's commercial screens now show movies from digital projectors, and, by some estimates, film reels will soon be a thing of the past.

"35-millimeter is coming to the end of its life," said David Hancock, head of film and cinema for the research firm IHS Screen Digest. "In four years' time, there will be no film printing business."

Kodak film has long been a favorite of cinematographers. But more and more movies are shot using digital cameras, and the notion of a "cutting-room floor" littered with celluloid scraps has given way to studios with computerized tools such as Avid Technology Inc.'s Avid DS and Apple Inc.'s Final Cut Pro.

At their peak, motion pictures accounted for more than 12 billion feet of film processing each year, enough to reach the moon and back five times, according to IHS. This year, IHS predicts film processing will shrink to about 4 billion feet as an increasing number of theaters receive their "films" by satellite or via hard drives delivered by courier.

"We no longer ship [film] to most theaters," Philippe Dauman, chief executive of Paramount Pictures owner Viacom Inc., told a conference last month. "We have helped them implement digital distribution so we don't have to make so many prints."

The billions of dollars major studios save on film - and its costly ingredient, silver - has resulted in revenue declines for the Kodak division that once accounted for the vast majority of the company's overall revenue.

In the first half of 2011, revenue from the division that makes motion picture stock film was $763 million, about half the $1.57 billion it posted in the same period in 2008.

Film printing volume was crucial to Kodak. Although it takes about 1 million feet to shoot a feature film, studios need about 100 million feet to print enough copies for the widest of North American releases.

Kodak sees its future in commercial imaging devices and printing. Still, the motion picture business is significant, accounting for somewhere under a quarter of its revenue. The company filed for Chapter 11 bankruptcy protection in January with $6.7 billion in debt.

Last week, a bankruptcy court judge approved Kodak's exit from a 20-year naming rights deal signed with Kodak Theatre owner CIM Group in 1999. As a result, Kodak won't have to pay the $3.6 million annual naming fee.

The judge made his decision too late to remove the signs outside, which may cast a sense of gloom over an industry already rocked by technological change.

|
|
|
|
|