What Legacy Media Tin Larn From Eastman Kodak

What arrive at yous arrive at when your manufacture is changing? What arrive at yous arrive at when your innovations are fueling the changes? Those problems convey plagued Eastman Kodak Co. for iii decades in addition to the company’s sense provides to a greater extent than or less lessons for those running legacy media businesses.

Eastman Kodak’s success began when it introduced the outset effective photographic tv camera for non-professionals inwards the belatedly 19^th century in addition to inwards continual improvements to cameras in addition to dark in addition to white in addition to coloring films throughout the twentieth century. Its products became iconic global brands.

The company’s maintained its seat through enviable query in addition to evolution activities, which inwards 1975 created the outset digital camera. Since that fourth dimension it has amassed to a greater extent than than 1,100 patents involving electronic sensing, digital imaging, electronic photograph processing, in addition to digital printing. These developments, however, continually created innovations damaging to its heart in addition to mortal film-based business.

Digital photography created a strategic dilemma for the company. It could movement into digital photography in addition to destroy the highly profitable film-based concern or it could exploit the film-based concern acre it slow declined in addition to then--when it was no longer profitable--try to jump out of the concern into digital world. It was an ugly selection in addition to the companionship chose the latter.

Today, the companionship has merely 15% of the employees it i time had in addition to its stock prices are nigh 15% of what they were earlier it lastly stripped out its production capacity in addition to distribution systems. An enduring arrive at goodness of its query in addition to evolution activities is that the companionship directly owns patents on much of the underlying applied scientific discipline used inwards all digital cameras including those inwards mobile phones. It is edifice a novel digital revenue flow on licenses in addition to infringement payments for role of those technologies. Those lonely directly concern human relationship for 10% of its turnover.

Eastman Kodak’s province of affairs is non dissimilar that of legacy media firms, peculiarly those inwards print, whose uses of digital technologies ii decades earlier the arrival Internet in addition to whose experiments amongst teletext in addition to other telecommunications based data distribution systems foreshadowed the arrival of the Internet.

Today, newspapers in addition to magazines—and increasingly broadcasters—are faced amongst dilemma of whether to continue exploiting their base of operations legacy production or to dump the former concern in addition to jump fully into digital. It is every bit ugly a selection every bit that faced yesteryear Eastman Kodak inwards the 1980s in addition to 1990s. So, what lessons tin live learned from its experience?

1)      Don’t essay to struggle change

You may non similar its management in addition to may sympathise how it volition impact your electrical flow business, but yous volition non live able to halt its momentum in addition to trajectory if it is beneficial to many customers. In such atmospheric condition yous tin entirely protect your existing production yesteryear making it every bit productive in addition to competitive every bit possible, yesteryear adjusting its strategies to improve serve those who are most loyal in addition to resist change, in addition to yesteryear carefully monitoring the stride of alter in addition to the investments yous build inwards the existing product. Simultaneously, existing companies that desire to arrive at goodness from the alter involve to live creating novel products for the novel markets in addition to allow them to prepare in addition to mature amongst the stride of alter fifty-fifty though they may live compounding the challenges inwards the pre-existing product.

2)      Don’t await likewise long to change

Waiting to movement into novel markets amongst novel products gives upstart companies in addition to other competitors opportunities to cash inwards one's chips players amongst improve products in addition to larger marketplace shares i time yous create upwardly one's heed to enter. Although at that topographic point are sometimes reasons non to live outset movers, yous should non await likewise long because it is rattling hard in addition to expensive to piece of occupation into in addition to cash inwards one's chips a major thespian i time a novel marketplace moves into its maturation phase.

3)      Be willing to sacrifice to a greater extent than or less short-term turn a profit for long-term gain in addition to sustainability

Careful strategic consideration must live given profits during transitional periods in addition to managers needs to build the strategy clear to the companionship in addition to its investors. It may live desirable to boost query in addition to evolution costs fifty-fifty though at that topographic point is no guarantee they may create results; it may live necessary to impairment the profits of the existing production yesteryear edifice upwardly its replacement in addition to cannibalizing to a greater extent than or less of its market; it may live appropriate to build investments inwards the novel production that may non pay off inwards the short-term. Whatever the strategy, it should live the final result of clear in addition to deliberate choices in addition to managers involve to ensure that investors in addition to entire companionship sympathise the reasons for it.

4)      Own the rights to technologies in addition to services your competitors volition employ

Use your R&D efforts in addition to build strategic acquisitions to laid about the technologies in addition to services that competitors volition involve to employ inwards the novel marketplace hence they must plow to yous in addition to part the benefits of their growth. Unfortunately, few legacy media companies invested inwards query in addition to evolution to early on exploit opportunities inwards digital media yesteryear creating the underlying hardware in addition to software for content command in addition to distribution online in addition to inwards phones, tablets, in addition to computers. Thus, they ain few intellectual belongings rights other than trademarks to their legacy media names in addition to most are non benefiting every bit Eastman Kodak from patents beingness used yesteryear those eroding the concern base. However, the novel products silent involve content products in addition to content management services that legacy media convey long produced in addition to companies involve to live opened upwardly to cooperating amongst the novel competitors rather than giving them incentives to cash inwards one's chips elsewhere or to prepare their ain content capabilities.

These are turbulent times for legacy media in addition to they require making choices in addition to positioning firms for the future. It is no fourth dimension for timidity or keeping on amongst concern every bit usual.