Rumors of DxO's Demise Exaggerated?

The latest news from DxO, the French software maker, is that the company is merely reorganizing under Chapter 11 protection and will not abandon its customers. So what does that mean?

Well, there's probably no way of knowing. "Bankruptcy" seems to mean a variety of things for different companies in different circumstances. I've been trying to follow the bankruptcy proceedings of our local supermarket chain (it's the only store in our town, and would drastically affect quality of life here if it closed), and the more I read about it the less I can tell you about whether our store is safe or endangered.

However, DxO made the following announcement today:

We are very confident that this procedure, which should not last for more than a few more weeks, will not affect our customers in any way. In fact, we are pleased to announce the following upcoming product releases:

• In June, we will release a free update (version 1.2) of our flagship software, DxO PhotoLab. Recently awarded the TIPA 2018 Award for Best Image Processing Software, this latest version of DxO PhotoLab will include improved local correction features, and will add support for 7 cameras, including the Canon EOS 2000D and the Sony A7 III. This release will also be an opportunity for us to reiterate our commitment to the “perpetual license” model (as opposed to a subscription model) that allows our customers to update their products according to their needs, rather than in a constrained manner.

• In June, we will release the new version of the Nik Software Collection, which DxO acquired from Google at the end of 2017. Much awaited by the Nik software community, this first “by DxO” version focuses on fixing bugs that up until now could disrupt the user experience, as well as on ensuring full compatibility with the latest Mac OS and PC platforms.

Encouraging as these statements are, it's worth noting that news about corporate restructuring from the corporations themselves could be strategic and might not necessarily be reliable. But at the moment, at least, things certainly look less than dire.

Also worth noting is that according to Wikipedia, DxOMark is a separate company.

If anyone knows more about this, feel free to jump in. Also, if there are any users of DxO PhotoLab out there, let us know what you think of it.

Mike

Original contents copyright 2018 by Michael C. Johnston and/or the bylined author. All Rights Reserved. Links in this post may be to our affiliates; sales through affiliate links may benefit this site.

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(To see all the comments, click on the "Comments" link below.)
Featured Comments from:

adamct: "For what it's worth, in a Chapter 7 bankruptcy, the assets of the debtor are sold to satisfy the debts. That would effectively mean the end of DxO as an independent entity. In a Chapter 11 bankruptcy, the debtor strikes a deal with its creditors to try and restructure the debt. This is why the debtor in a Chapter 11 bankruptcy is often referred to as the 'debtor in possession'—the debtor gets to hold onto their business and assets while they try to repay the restructured debt.

"But as Mike says, this can mean wildly different things in practice. Sometimes debtors are able to reorganize, pay off the negotiated debt amount, and move on with a successful and stable business. Other times, the reorganization is a failure and the debtor ultimately winds up in Chapter 7. The third option is that the debtor just manages to hold on, repeatedly restructuring its debt, never getting rid of it, not fully failing, but really not all that successful, either.

"Fingers crossed that this is just the first step toward making DxO more stable and setting the framework for future growth and success."

Ilkka: "I am not a lawyer and I am not French, but I believe there is no 'Chapter 11' in France. But when an American newspaper or other news organization reports about it, they may well use the common US term. It just means tbat the company is reorganising under some sort of protection from banks and other creditors."

ScotInDortmund: "French law has a similar provision to Chapter 11, protecting the company while negotiations with creditors proceed. —Ron Preedy."

[See Ben Marks' comment in the Comments Section for more background about bankruptcy and reorganization. —Ed.]

Bahi: "I use both Lightroom and Capture One heavily (and provide support and training for users of both). Despite that, I still have a soft spot for DxO's PhotoLab and its predecessor, DxO Optics Pro) and continue to happily pay for PhotoLab. (Sadly, only one person has ever asked me for training on DxO products in about a decade.)

"DxO's converters have an interesting and overlooked feature that makes me hope for the survival of DxO—and it's not the much lauded Prime noise reduction, which can be useful but gives results that look impressive in some ways but often seem a little unnatural to me.

"The feature I like is the method used by DxO to correct heavy barrel distortion in mirrorless lenses. I use it for the 17mm Olympus ƒ/1.8 but it applies to many mirrorless zooms and wide-angle primes.

"Even quite expensive lenses rely on software corrections, perhaps to help keep lenses smaller and lighter. For Micro 4/3 cameras, these lenses carry their lens-correction profiles internally. The camera embeds the profiles in the raw files. The distortion is usually corrected automatically by the camera for JPEGs.

"Lightroom (and Adobe Camera Raw [ACR], of course), Capture One (C1), and the in-camera corrections will all give you automatically corrected images when they read the raw files. However, the results will have substantially narrower fields of view than the results from DxO PhotoLab. That can be a big deal.

"The DxO correction algorithm presumably uses some kind of image stretching to achieve its corrections—I don't know. It's perfectly good, with no visible artifacts to my eye; straight lines do indeed come out straight and the results are sharp and detailed. The great thing it is that the odd hand or foot at the edge of the frame will be included in DxO's output but cropped out by Lightroom and C1. This has saved otherwise good pictures that were taken at events or on the street, where you have little control of your position.

"Photolab's interface feels a little clunky and slow but it's also clear that the output quality can be very impressive and that the software has been built by people who care about image quality. For me, though, the killer feature is its clever lens correction.

"I was pleased to read the article, Mike–I'm hoping for DxO's survival and am also hoping that diehard fans of Nik Silver Efex 2 (I'm not among them) will pay the upgrade cost to keep the company in business."

huw Morgan: "I think it's a little ironic that a bankrupt company is touting its software licensing model while Adobe records record profits after adopting a subscriber model. I'll put up with the minor annoyances of a subscription model if it's the price that has to be paid to keep my vendor solvent."

Richard Barbour: "DxO PhotoLab is my primary raw converter these days since jumping off the Adobe subscription bandwagon. It's good for what it does but of course isn't Photoshop, so I find myself often invoking the 'export to application (Photoshop CS6)' function to finish processing a photo. PhotoLab is hard to beat if you want to keep up with the latest camera updates, want a very good default rendering of your raw files (with numerous presets to give one-click satisfaction) and excellent global editing capability. The imported Nik functionality is also useful for local edits, although not quite as well implemented and integrated as one would like. I'm hoping they will fix that in the upcoming release. I also hope DxO is able to solve the current crisis and continue to be a good processing alternative."

Comments

[Stephen Scharf]

So, are you referring to DxOLabs here, or DxO Mark? Because it's not clear.

DxOMark is that "testing" company (and I use that term loosely because I've never seen them publish a statistically valid measurement systems analysis) that puts out all those camera/lens ratings that mean virtually nothing in the real world.

DxOLabs the company that put out the failed DxO camera-thingy that was/is a complete bust. My expectation is we will see DxoLabs go the way of GoPro. It's just a matter of which will go first, but in either case, its a good thing because both companies are completely out of touch with providing quality products that create value for customers.

[Benjamin Marks]

I am taking your "knows about this" as general -- that is about bankruptcy, rather than specific (about DxO) . . . forgive the following basic summary, if I have gotten that wrong.

As for bankruptcy there are textbooks on the subject. But in a nutshell the two big types of U.S. corporate bankruptcies are named for their chapters of the U.S. Bankruptcy Code: a Chapter 11 (reorginzation) and Chapter 7 (liquidation).

Chapter 7 applies when a company's liabilities exceed its assets and the business is no longer a going concern. The assets of the company are sold off and creditors get the proceeds of the sale. Usually the payment is pennies on the dollar owed, but the bankruptcy code theoretically gives a predicable, orderly, and transparent judicial process for distributing these proceeds and winding down the business (a bad situation, perhaps, but better for society than sending all the money to favored creditors and stiffing others -- or so the theory goes).

Your grocery store and DxO are likely in Chapter 11, which puts a stay on all obligations to creditors while the business gets its house in order to continue running the business. In simplified terms, the bankruptcy code represents a social judgment that it is better for lenders to take a haircut on the amounts owed to them than for a whole business to go belly-up with the attendant unemployment and other social disruption that that causes (missed mortgage payments, foreclosures on employee's homes, etc.). There are multiple flavors, but generally one of two things happens: either a new lender comes along who agrees to take out the old lenders on new terms (typically longer time to pay, but higher interest to reflect the risks of lending to a troubled borrower), or the stockholders are shown the door, and the lenders convert their loans into equity and try their hand at running or selling the business. These get complicated as their are often several different kinds of lenders (secured (like a bank with a mortgage, or a car company with a lien on your car title), unsecured (e.g., like credit card debt)) and within these there can be classes of debt who have agreed up front to be senior or junior to one another and (again, theoretically) have priced their debt accordingly.

Unlike a judge looking at an ordinary company and asking whether an action is in the best interests of stockholders, a U.S. bankruptcy judge is looking at the creditors and trying to decide what is in their best interests. That is, in essence, the whole point. Without an orderly bankruptcy process, no lender would ever lend to a borrower -- in this sense bankruptcy (along with insurance, but that's a separate essay) is the underpinning of all transactions in the economy.

Why does it take so much time to work out? Well, every business is different and has its own collection of creditors. In addition, any BR judge would be grateful to have an agreed-upon settlement among all the classes of creditors to work with, rather than trying to figure it all out on her own. So there is likely horse-trading going on behind the scenes, and creditors playing games of chicken with one another in order to figure out whether it is better to cut a deal or hold out for a judge to make a decision.

In fact, it is exactly the point of a well run bankruptcy system to enable DxO to support its existing customer base, continue to release new versions of its software, continue to pay its employees, and so on, all while trying to figure out what to do about its debt service. The process ideally saves them from having to "rebuild their plane while in mid-air." It doesn't always work, of course. And the disaster of the comnpany's complete collapse and the selling off of its assets at an almost complete loss is the end-game the creditors are trying to avoid.

[Ian Seward]

The most likely cause of DXO's problem is that they diversified into hardware manufacture i.e. the DXO One camera module for iPhones.

Going from a software company to manufacturing (obviously third party) dealing with large capital outlays, inventory (with costs), tooling costs / commitments etc.

Business schools are littered with case studies of businesses failing after diversifying into areas where they have no expertise.

Obviously we don't know for sure but my monies on the DXO One:-)

[bryan willman]

Chapter 11 is a section of US bankruptcy law, if they're a French company wouldn't they be reorganizing under French law?

[Today's announcement begins, "On March 7, 2018, DxO Labs chose to file for Chapter 11 Bankruptcy Protection and is now in the process of restructuring the business." --Mike]

[Chuck Albertson]

I had read that DxO Labs had filed for banruptcy protection (under French law) a few months ago.

Chapter 11 was added to the US bankruptcy act in a big re-write in 1978, and grants protection from most creditors while the company tries to reorganize and stay in business, as opposed to straight liquidation. One of my first jobs out of law school was working for the trustee overseeing the liquidation of a long-established Seattle company. It had tried to file for Chapter 11, but the banks had its accounts so tied up that it couldn't afford the postage for the notice to creditors, so it switched to Chapter 7 (liquidation).

[Richard Man]

Wonder what's happening with the DxO One camera.

[Nigel]

I hope that the DXO software survives this bankruptcy as it is a great piece of software. It was just getting much more interesting too with the inclusion of the Nik tools.

I started using it some time ago as it was about the only software that solved the horrific CA’s that I get with my Panasonic 12-35/EM5 combination. From a total disaster, this software turned the combination into a dream team for me.

The inclusion of the Nik tools took be back to the happy situation I had when I used Nikon’s CX software with my D300. These point tools are a little bit like working in the darkroom with dodging and burning tools. These tools give me just the level of retouching I want; quick dodging and burning, without hours spent at the computer with masks.

The signs that not all was well were evident when the company split in two a few months ago. The software finished up lumped together with the cell phone camera, which is probably the cause of the financial problems. Let’s hope the testing arm buys the software rights or some other accounting “magic” is performed. Having been involved as a creditor in a recent bankruptcy, it is better to take talk of resurrections and continuation of business with a pinch of salt.

From what I have read the French “Chapter 11” process is a bit different to the USA version.

This affair just shows how fragile our imaging is today, we rely on software that is here today and gone tomorrow, soon too obsolete to be useful after a few months when support is lost.

This will be my third major software that has gone west; the Raw convertor (name forgotten) that became Lightroom, Digital Light and Color’s Picture Window Pro and now DXO.

[Ian Seward]

My guess is they used Chapter 11terminology to communicate the type of bankruptcy they were entering. Most people would not recognise the French law equivalent.

[Keith]

Aside from the bankruptcy chatter already posted, I've been a user since version 5. My initial interest being lens correction and perspective control. More recently the Prime Denoising feature gives a nice boost for m43 files. While I never really preferred it for global adjustments 'a la Lightroom' (the on screen response being a bit laggy) I do remain very optimistic on the integration of the Nik suite of tools. If this is well done in regards to user interface and output results, it could make DXO a serious contender in the photo software market. The fact there is a "pre-installed" Nik fan base doesn't hurt.

[Kurt Shoens]

I've been a customer of DxO's imaging software for about 10 years, loyally upgrading on each release. I even have a DxO ONE camera, although I use it less now given the improved cameras in later iPhones.

I can get a better result with DxO PhotoLab than with Adobe Lightroom, but Photoshop clobbers them both.

I hope DxO prospers and look forward to the integration of the Nik software suite into PhotoLab.

[Ken]

"This affair just shows how fragile our imaging is today, we rely on software that is here today and gone tomorrow, soon too obsolete to be useful after a few months when support is lost."

I fully agree with this comment from Nigel. Mass market digital photography is well into its second decade now, but software for editing raw files remains, by far, its weakest link.

Good luck recovering your raw file edits once the software you used is no longer made, updated or supported. And migrating all your files every time a software program is discontinued is a non-starter because for even the most casual hobbyists, that means potentially dealing with migrating and updating thousands of raw images again (and again) with every discontinuation.

And don't get me started on how much time and effort it takes to edit raw files on clunky, slow, buggy software -- which imho includes pretty much all products on the market today, including Adobe's and camera makers' products.

No wonder so many casual photographers just use a phone or out of camera JPGs.

[John Allen]

On the French version of its website (https://www.dxo.com/fr/about/news), DxO says

Le 7 mars 2018, la société DxO Labs a choisi de se placer sous un régime d’administration judiciaire, le temps pour elle de procéder à une réorganisation interne.

As it's a French company, I tend to think this is the "original" text and that the reference to Chapter 11 in the English version is just a way to render the notion of a "régime d’administration judiciaire" (literally, "a regime of judicial administration").

[Dave Levingston]

I'm using DxO Optics Pro as my primary RAW processor. I love it. And I love that it isn't using the subscription model which, to me, is just software companies treating their customers like cash machines. I have always skipped one or two software upgrades on all my programs. I'm still using Word 2003, which is just fine for everything I do. I hate the learning curve that each update requires and I hate the idea of turning on the computer to do some work and finding that everything has changed because of an automatic update.

I also use the NIK tools and am looking forward to being able to use them with DxO if they survive long enough to do another upgrade.

Maybe I'll just go ahead and upgrade to the latest DxO version just as a way of providing my personal vote of confidence. It's a great program and works so well that it has nearly automated my RAW conversion workflow.