Discontinuous Demand and Its Discontents

In a comment written in response to the "Film Falls Off a Cliff" post below, our friend Thom Hogan (of ByThom.com, the world's best Nikon news site) wrote the following:

Beware that statistics can show something both 'up' and 'down' simultaneously. You have to look at what's being measured. The 'down' statistic is overall film sales. This is a 'global' statistic, the entire universe of film. You can have 'up' statistics, too. For instance, if there were 10 competitors each with 10% of the global market, the global market shrinks by 50% and six competitors close their doors, someone's sales are going to go up (maybe all of the remaining four, but by definition, at least one).

I talked to one local lab about this. Their sales were up, and they felt comfortable that film was seeing a resurrection. Then I pointed out that all their local competitors were now closed, so anyone who was still shooting film who had used a local competitor was now coming to them.

Still feel confident that things are 'up'?

Just so. Oren and I had been discussing this privately. He referred to it as "taking share from others." Writing back, I wondered what accounted for Harman's 8% rise in sales in 2010. "It's quite possible it could have been linked to disappearing competition as easily as increased popularity. I really don't want to have to research it—especially since I know the conclusions will be, well, inconclusive—but it's quite possible it could be simply people migrating to Ilford as other B&W films went south. Impossible to know without more data than we have readily available."

The concept was most vividly and succinctly put into words in my experience by the late Ian Brightman, who was at that time the owner of Beseler, the enlarger manufacturer, in a meeting in the publisher's office at the photo magazine I edited. The publisher asked him if he was worried about the decline in enlarger sales, and he replied, "Not necessarily. In a down market, the last man standing makes out like a bandit."

But what if there is no 'last man'?
A somewhat related topic is what happens to industries when none of them can weather an abrupt market change (apropos the Ctein column below, I should say that I'm doubtless discovering for myself ideas that are very familiar to economists—I've never taken an econ course in my life, more's the pity).

To create an illustration, let's say that somebody invented hovercars that were half as expensive as automobiles and ran on antigravity, sunlight, and optimism. The market for gas cars would crash as the world's population swiftly migrated to hovercars for their personal transportation. But let's say that 15% of the population still needed or wanted petrol cars*. The problem would be, for the short term, that for a while there would be a huge number of perfectly good gasoline-powered cars glutting the used market—so many for so little money that, for a good long stretch of time, no one would need to buy a new car. So all the car manufacturers would go out of business, or switch to making the newfangled hovercars.

But then, eventually, the supply of decent used petrol cars would begin to dwindle and disappear. At that point, the 15-percenters are in trouble, no? Because they still want to use petrol cars, but no one is making petrol cars any more. The irony in this scenario is that there might be, at that point, a market perfectly sufficient to support one or two companies making petrol-powered cars. There just wouldn't be any manufacturers who had survived from the era of petrol-powered cars to supply them. (And, of course, re-starting an industry is much more difficult and expensive than simply continuing an existing industry, even on a much reduced scale.)

If I had to put my own name to this problem, I might call it "discontinuous demand." Not only does an industry get whacked by an abrupt shift, but there's a period when the remaining demand "looks" artificially low, because of temporarily high supply from the used market.

That's the situation film camera makers find themselves in right now, I suspect. There's probably a market out there for film cameras—it never really went away, and it will be sufficient in the future to support one, two, or three small companies. But it can't support any camera manufacturers in the interim, because of the vast supply from the used market that it can't compete with.

The situation isn't absolute—there are still some nice film cameras available. But you'll notice that many of them are niche products suited to markets that were already very small even before digital came along. (I'm speaking mainly of bespoke handmade view cameras. The Fuji folder is another example—Fuji was making the odd occasional quirky one-off camera every now and then back in the film-only era, too.) Those companies can deal with limited demand, because they'd been dealing with a limited market all along.

Crystal ball gazing
My friend Phil Davis used to tell me he didn't fear death—that his problem with reaching the end of his life (he died at 85 in 2007) was that he was so curious about what was going to happen next. I won't be around to survey the camera market in 2060, but I wish I could be. I'm very curious as to what it will look like.

I'll make two predictions: first, that large-format black-and-white optical-chemical photography, practiced by a small band of craft adherents, will be the very most prestigious form of photography—and that there will be one, two, or three small manufacturers making a variety of film cameras, steaming merrily along and doing very well, thank you. Just a guess.

Mike

*The diehard pessimists?

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Comments

[Speed]

As long as there is IMAX, there will be color film.

[Kelvin]

Impossible Project is another example. There is a vacuum in supply for Polaroid materials. My local camera stores get a steady stream of arts students asking for 600-compatible Polaroid packs.

[Carl L]

As I see it, the problem with making film or anything complex is it takes hundreds if not thousands of items to actually make a final product. Each part may have to come from a different vendor. Missing one part and you are out of business.
Be proud -- We are the generation of the development of digital photography -- it will only get better from here and we all help do it by reinvesting in better equipment and always asking the industry for better results...
I have no doubt that soon we will look back on the film era and realize it really wasn't that great.
Kodak rarely produced two batches of color or B&W film that was the same. Kodak gave B&W 1/2 stop +or- latitude and color 1/3 stop +or-. If your digital camera did that every 50 shots, it would be going back the the factor
processing,well good luck with that.
Your first shot with a digital camera and your 10,000 will have the same color balance and if not every thing between will have a linear response -- not greenish one day and magenta grays the next roll..
Yes B&W (silver or platinum) prints are beautiful -- digital will get there soon and probably surpass it in beauty.
Have Fun, shoot lot of pic's and embrace the future of digital.

[Neal Thorley]

I love reading all the stats about how film must be doomed because these numbers show an X percent drop in sales volume since digital became prevalent.

To me it's simple... before digital all we had was film.. now we have a choice. we never had a choice. so that in itself proves that we'll see at least some drop in film sales simply because if there are people choosing to shoot film there are also people choosing to shoot digital who never could before.

I also agree that the future of film photography will become more of a specialized niche. As you suggest we may not see as much or any "colour" film in the distant future but the craft of printing a silver gelatin print through an optical enlarger is still a beautiful art process.

[Janne]

Film is going from mass market to niche. The companies that aimed at the mass market - Fuji, Kodak, the large camera manufacturers - have an incredibly hard time to scale down to the niche format. Everything - their size, business processes, machinery, sales channels - is geared towards mass market sizes. No wonder most of them react by finding a different mass market and leaving the original one.

Niche makers have an easier time. They're used to live in the shadow of the big elephants. They're already the right size for the new niche status, and they're used to competing with entities much larger than themselves.

As a film shooter I don't think the sky is falling. As you say, there is room for film as a niche product, and there will be more or less indefinitely. Film may no longer be as cheap or convenient as it apparently once was, but then, people would mostly no longer use film for throw-away snapshots anymore either. I don't mind paying for an absorbing hobby.

[Steve Jacob]

I am more excited to imagine where the new technology will have taken us in 50 years. I think film may have gone the way of the gas engine by then, but for different reasons.

[Andrew Burday]

Your story sounds plausible. But surely another factor pushing camera manufacturers toward digital is the desire not to share profit with the film manufacturer. Modifying your story, suppose the hover cars ran on enormously expensive batteries that would stay charged as long as the hover car lasted. Then hover car manufacturers would profit on the car itself and on a lifetime supply of "gasoline". But manufacturers of gasoline powered cars would have to make all their money on the car itself. The comparison to sensors versus film is obvious. Surely one reason why all the manufacturers have gone digital is that they want to profit from the electronics as well as the camera body, instead of taking all their profit on the body and leaving the profit on film to Kodak or Fuji.

For this reason, I have wondered whether one of the film manufacturers might get back into manufacturing cameras in order to create demand for their product, as they did in the early days of photography. It doesn't seem like Kodak has the nerve or the imagination, but Fuji? Ilford? Maybe.

[Harry Lime]

I believe that the survival of film depends on maintaining the ecosystem that supports its consumption.

First off you need film cameras. We can break this area down in to two categories; new and used.

There are plenty of used cameras out there, but let's be honest; there are only a limited number of models that most people would actually want to use. Nearly all of us would prefer to shoot with something like a Nikon FM, rather than an Argus brick.

The problem with used cameras is that it is becoming increasingly difficult to have them serviced and maintained. Sooner or later parts become unavailable, as do QUALIFIED service technicians. For every dependable one out there, there have to be a dozen or more hacks.

There are only a handful of film cameras still in production. The best known are the F6, FM10, Leica MP/M7, the Voigtlander RF cameras and a few high end MF and large format cameras. You also have a whole string of plastic 'toy cameras' like the Holga and some P&S. The problem here is that in terms of pricing there isn't much of a middle ground. Either you are buying an low end model like the FM10 or dropping several thousand dollars on an F6 or Leica.

Color film is highly dependent on labs, but unfortunately they are not as ubiquitous, as they used to be. Black and white would probably survive, if every lab on the planet disappeared tomorrow, because I am willing to bet that the vast majority of rolls are processed in bathrooms the world over. My guess is that color film may not survive the next 10 years, but b/w will.

Film needs affordable dedicated scanners to be part of the digital world we live in. Not everyone has or wants a darkroom. Kodak or Fuji could remedy this problem very easily, but I wouldn't hold my breath. But this is a very critical area. Maybe a lightbulb will go on over at Fuji.

The internet has done a lot to keep film alive up to this point. Sites like APUG are an invaluable resources to anyone contemplating the use of film. The internet also allows film shooters to obtain the materials needed from small vendors scattered across the globe. Sites like flickr and RFF build a sense of community, where work is shown, information shared and a culture of film is maintained.

A few predictions...

We will come full circle and ultimately large format photography will be the last man standing. The cameras are simple to build and maintain. Film will be made in annual batches and this could be sustained for a very, very long time. If things get really bad I can see some die hards making their own dry plates.

Leica shooters will be a close second.

Small private companies like Adox and FOMA are the most likely candidates to survive until the bitter end.

Ilford will make film for as long as they can make a profit. If Kodak and Fuji shut down, they will become the premiere manufacturer of film in the world. They make good products and if they can keep their pricing under control, they will do well.

What will happen to Kodak is very difficult to predict. They have brilliant engineers, but are run by some of the worst bean counters on the planet. There is a good chance that they will eventually pull an AGFA and kill production, if profitability should fall below a certain percentage. Or Kodak as a whole will collapse and take the film division down in the process. The collapse of film sales in the movie business over the next few years is going to be very telling and will probably determine the fate of film in general at the company.

I have no idea if Tri-X could be licensed by someone else, but I would hope that if Kodak went away, that Fuji or some independent investors would step in and buy some of their intellectual property.

Fuji is a relatively diverse company with several streams of income. Their film division may outlast Kodak, simply because they have smarter management.

Leica will probably be the last manufacturer of 35mm cameras.

[AM Townsend]

I think the Impossible Project might tweak your thinking about restarting an industry sector. I don't know how well they're doing, but they've clearly re-animated a dead industry. This speaks to the modern phenomenon of high-density information exchange and a potentially global consumer base due to the Internet. Film may go the same way; I'm heartened by the recent reintroduction of Adox films, along with many "new" films coming out of Europe.

[Thom Hogan]

@Speed: no, you are incorrect. NHK, amongst others, has already shown digital Imax-level capabilities.

@Janne: yes, you're asking the right question and I'm surprised others aren't, too. The question isn't whether film sales are falling fast, the question is whether film sales have fallen enough so that they are no longer sustainable in a mass market company (Kodak, Fujifilm). The answer to that question is yes, they have. Film is no longer a cash cow for either company, so now it has to operate like a business. And it's a niche business within a mass business (well, Kodak is in danger of becoming a series of niche businesses). We're actually overdue for Kodak to either sell or spin off their film business (the only other choice is close it down like Cisco closed Flip, but it still has residual value so that wouldn't fly with shareholders). Japanese companies are more difficult to fathom in this kind of decision. Fujifilm may ride the fall to the ground.

@neal: we have a choice because we're in a transition. It is incorrect to believe that we'll always have a choice.

@andrew: your analogy has merit, but I think it was even more basic than you think: companies like Nikon don't really have any chemical ability, but they have great electronic ability. Companies like Sony and Panasonic were already consumer electronics giants, and vertically integrated. The challenge for a camera company was what would they do when the time did come to switch from film to digital. We could have gone from a time of dominance by Kodak and Fujifilm to a time of dominance by Sony and Panasonic (and still may, plus add Samsung now). If you saw that future, you'd jump faster at getting ahead of the digital rush, which is exactly what Konica/Minolta and Nikon tried to do. Canon's sort of strange case, but they fall closer to Nikon than Sony.

@Harry: you can simplify that: which film formats live? Large format (sheet), because hobbyists can build cameras more easily; 35mm, because there's a large body of existing equipment in the used market. That's about it, I think.

One thing that people are forgetting in this discussion is Hollywood. Once Hollywood is all digital, the halo of making film is gone, too. The Hollywood digitization is happening faster than I thought it would. No DoP I know wants to shoot on film any more.

@all who mentioned Impossible Project, LPs, or other analog media "resurrections": yes, it's difficult to kill something completely off and there's often residual demand that isn't met that fuels small scale production again. However, media does die. We no longer have 78 records, 8-track cartridges, 2" video tape production, and more. It's not impossible to imagine film going away. I don't think it will for another decade or so, at which time it will be an expensive, very niche format, I think. But it is going to go away.

[Ernest Zarate]

Mike, your prediction looks oddly like the early era of photography - a small, dedicated force of passionate adherents, using products made by hand and in small numbers, practicing a ritual so complex, and making a product so amazing, to the average person as to be regarded as magic.I have no doubt that even if there are no film or camera manufacturers around in 2060, these few, these lucky few, will make their own film and build their own cameras.

[ctein]

Dear Kelvin and AM,

So far all the Impossible Project has demonstrated is that it is possible to resurrect a sub-par version of an extinct product. And to stay in business for only a few years.

Let's check back in ten and see if (a) they're still in business and (b) they can turn out product as good as the original.

~~~~~~~~

Dear Andrew,

I don't think your theory holds up well for two reasons. First, the digital camera market is currently extremely competitive and profit margins are not large. Second, digital camera prices are not high compared to the historical film camera prices, for the overwhelming majority of cameras sold. Back in the mid-1980's, near the low price of serious consumer SLRs, an inexpensive SLR plus kit lens was around $1,000 in current dollars. Today's comparable digitals are definitely not more expensive.

pax / Ctein

[David Dyer-Bennet]

Good point about the importance of scanners. I do suspect that most of the large-format will be scanned on flatbeds with transparency adapters, which are still in production (and are a relatively minor tweak of a simple flatbed). Scanning small formats like 35mm will get harder and harder, though, unless something changes.

[Gary Nylander]

Thanks, for your crystal ball gazing, Mike, I thinks its right right on. I happened to be one of those photographers using large-format cameras and black-and-white optical-chemical system to make my pictures, although these days I use more of a hybrid system, after I'm finished with the chemical film developing part, I scan my negatives and turn them into pixels on my computer which suits me just fine, in the long run I'm not really too concerned about film dying out, as you said in your post, large format black and white photography has always been kinda niche market. I guess I could always try coating my own film if I had to if there was no film available. I also look at this digital vs film comparison thing ( I like using digital too ) from this perspective: if one musician uses an electric guitar and the other uses an acoustic guitar, each produces its own unique kind of sound, yet they are both 'guitars' I suppose one could even electrify the acoustic guitar thus getting an even more hybrid sound. Anyway I'm still having fun shooting with my view cameras and thats what I plan to keep doing in the future, as long as I am able.

[Jay Frew]

Mike said (in part) "...but it's quite possible it could be simply people migrating to Ilford as other B&W films went south..."

It's also possible that some people are migrating to Ilford B&W because their long-time favourite colour film is now too expensive to buy and too inconvenient to process. While it was still available at my local store, Provia 100 35mm (my long-time favourite film) was nearly $20.00/roll (thank goodness for B&H) and now, must be sent out of town for processing @ > $10.00/roll. So, I will switch to Ilford (as soon as B&H tells me it is back in stock), process it at home in a bag, and scan it into my digital workflow.

I continue to shoot film occasionally (3 or 4 rolls/month), but, I certainly won't be spending any more money on film camera kit (if I was that hell-bent on wasting money, I'd just get another boat ;~)). I'm not even sure I will pay for any necessary film camera repairs in the future. I'll just run the poor darlings into the ground and move on.

I have come to appreciate my DSLR in the 3+ years since I acquired it and settled-on a decent computer workflow. I have more control over my output now than I did when I shot film exclusively and I like my ink jet prints.

Photography continues to provide me with a much needed creative outlet that won't be hampered if I can no longer use film.

Cheers! Jay

[Andrew Lamb]

Thom Hogan: "No DoP I know wants to shoot on film any more."

I know a few. Having said that, the Arri Alexa seems to be a wondrous piece of kit.

[Chris Bertram]

Not sure that the supply of used film cameras is going to dry up through breakage any time soon. My Rollei Old Standard will be 79 next year and still takes nice picture (though the max shutter speed of 1/300 is a bit of a limitation, I admit). Of course, if 120 goes then that's that.

[MS]

One of the things I miss in digital compared with film is the immediacy of shutter response -- Leica M3 gives what, 20 ms?.. What does the best digital camera that gives comparable camera size and viewfinder quality, and shutter response to the M3?

[Alex Vesey]

Taking this conversation on a different tangent, the film itself and camera BODIES are parts of an ecosystem that will continue to dwindle, if not die off completely, but should we not also be asking ourselves what new ecosystems might emerge from the "mulch" (compost heap" that was the world of film?

Today in the local Yurido bookstore in Totsuka, Japan, I ran across a "mook" (magazine-book) published by Genkosha entitled "Old Lense Life." The cover has cameras such as the NEX-5 and newest Olympus Pen, all of which were sporting much older lenses mounted on adaptors. The whole text is in fact on technologies for adapting old film camera lenses to the some latest digital bodies. While this may be a "Rube Goldberg" contraption to many shooters, there is probably a market for innovative companies to find new ways of grafting some older materials to meet new desires.

Here is a link to the text. Sorry this is only in Japanese, but it gives you an idea of the text's objective. (Of course, the publish of such a text is also making money, as are the depicted manufacturers.)

http://www.amazon.co.jp/オールドレンズ・ライフ-玄光社MOOK-澤村-徹/dp/4768303404

www.genkosha.co.jp/pd/mook/1795.html

Alex Vesey

[Bryce Lee]

As to the demise of film:
"lies, damn lies and statistics," it was
once said by somebody?

[Roger Bradbury]

One niche company is doing well, the link gives away who...

http://www.amateurphotographer.co.uk/news/Leica_cameras_spark_60_rise_in_group_sales_news_307896.html

[Max]

...and if at that point nobody cared for petrol cars as a threat to the envirpnment anymore, you'd be buying one, wouldn't you, Mike? That's pretty much what I felt when I bought my turntable a couple of years ago.

[David Bostedo]

"Yes B&W (silver or platinum) prints are beautiful -- digital will get there soon and probably surpass it in beauty."

I've mentioned this before, but I'll do it again - having only come into photography in the last few years, I fail to see what's so special about silver or platinum prints. I, personally, think digital printing already meets or surpasses them. To me, statements about how digital isn't there yet are purely nostalgia based.

I guess what I'm saying is that traditional printing is likely going the way of film too.

[raizans]

@thom: what about medium format? is that singled out for eviction? what about all of the medium format cameras being made today? not just the fuji gf670 and holga, but alpa, hasselblad, mamiya/phase one, arca swiss, linhof, sinar, ebony, and all the others that take roll film backs, even though they are now primarily used with MFDB. to me, it looks like medium format has it easy.

[ctein]

Dear Jay,

You're very fortunate. You're also a statistical anomaly. Very, very few photographers will switch their chosen medium that radically because of cost.

I'm happy you can do that. But that sort of behavior has an insignificant effect on the total stats.

pax / Ctein

[Koen Lageveen]

There are a number of signs that there will be a market for film, so that's reassuring. I think it's wonderful that technological progress also created the internet that allows niches to resurface and thrive. Like Thom said, we might not have our "78 records" anymore, but b&w film will go a long way and by his view on the statistics it may actually be good to be Adox or Foma right now.

[Andrew Molitor]

The key to the hovercar/petrol car example is that the demand is low, and startup costs are high. The short-term availability of used cars is a glitch. We see a similar phenomenon with exotic pharmaceutical research -- only 10 people a year get the disease, very few research dollars go into it since there's basically no money there.

The key to film's survival will be how easily you can make a go of it with low production. It's pretty easy, as Mike has noted, to smear goo on to substrates, but is it easy enough? Can other equipment be retasked to do it? (if you can get a refurb post-it-note maker for $US15,000 and start making film with it, film will be around forever, e.g.)

The thing about enlargers is that practically ANYONE can make an enlarger. To make a good one, you just need a decent machinist and time, but I could make a passable one this afternoon.

[Dan]

I have not bought a roll of film in a couple years. Did just buy 500 sheets each of 8x10, 5x7 and 4x10 though as well as some more chemistry for mixing my developers and fixer. Also more chemicals and paper for hand coating pt/pd papers and for carbon transfers. Add in Michael A. Smith's Lodima paper for silver contact prints and things are still going well.

[ctein]

Dear Raizans,

The medium format situation is very peculiar. In the early part of the 2000s, Peter Leibovitz of Agfa confided in me that the medium format film market was essentially nonexistent. It was one of the sectors of film photography that digital killed off early, way before the precipitous film decline in the 2000's.

The reason for that is that the overwhelming majority of medium format film went into portrait photography. Like the well-placed catalog photographers, portrait studios had a high enough volume of business to justify the cost of the early good (very expensive!) digital cameras. Like the catalog photographers, they could afford the quality camera needed and pay it off pretty quickly, and the workflow associated with digital photography is almost ideal for portrait studio. Consequently, the medium format film market collapsed extremely quickly. (The other big component of medium format photography, wedding photography, had already been in decline as more and more wedding photographer switched to 35mm in the mid-90s.)

I asked Peter, then, why there were so many neat and new medium format cameras coming out. It was for exactly the same reason that Agfa (and Kodak and Fuji) still made medium format film. It was a prestige market. Serious professionals used medium format. It looked really good on your branding directed at the vastly-larger amateur market to be able to say that your brand was a favorite of professionals.

Pretty interesting, huh? I sure thought so.

What this says about the future of medium format film photography? I haven't a clue. Prestige and image are a lot harder things to predict than dollar sales volumes.

pax \ Ctein
[ Please excuse any word-salad. MacSpeech in training! ]
======================================
-- Ctein's Online Gallery http://ctein.com 
-- Digital Restorations http://photo-repair.com 
======================================

[Ade]

"When I retire, I'll shoot a lot more film," I used to think. With twenty years minimum still to go, that now sounds like a rather over-optimistic assumption.

[Noons]

@Ade:

why wait for retirement? I've never shot so much film as I do nowadays! And planning on increasing, if anything.

[David]

It's critical to separate mass market vs niche markets because we tend to look at one when opining about the other. In many endevours, the mass market brings formats and pros build on it.

Regarding film in a prosumer's or pro's mind, the main reason it's still down is due to the Japanese quitting the scanner market. Otherwise, we'd have the best of both, more or less.

Minoltas and Nikons were already pricey, and Flextight prices were always high enough to make any sane professional put up with digital's growing pains.

Presumably, neither Kodak nor Fuji could work the numbers such that in having modern, competitive scanners was justifiable to prop up their film business.

[Tim]

You can call it "Discontinuous Demand" if you like; it's also a fair match for being described as evolution through natural selection. (Cf a chapter in _The Selfish Gene_ describing the interaction between a few species in their environment, in game-theory terms.)