Kodak and the Digital Camera It Invented

The story

For most of the 20th century, Kodak was photography. George Eastman founded the company in 1888 with a simple promise: you press the button, we do the rest. Kodak sold cameras cheaply and made most of its money on what came after: film, chemicals, paper and printing. Every family vacation and birthday party meant more rolls of Kodak film.

In 1974, Kodak gave a 24-year-old electrical engineer named Steven Sasson a small project: see whether a new kind of electronic light sensor could capture a picture. Sasson built a camera out of spare parts. It was about the size of a toaster, weighed about 8 pounds, and ran on 16 AA batteries. Its sensor was just 100 by 100 pixels, or 0.01 megapixels, and it took black-and-white pictures. Capturing an image took a split second, but recording it onto a cassette tape took 23 seconds. To see the photo, you played the tape into a special device connected to a TV.

In December 1975, Sasson took his first picture, of a lab technician down the hall. In 1976 he showed his invention around the company in a presentation called "Film-less Photography." People asked good questions: When could customers buy one? How would people look at their photos? But Kodak's leaders did not see a market. Sasson later told the New York Times that they thought "no one would ever want to look at their pictures on a television set." Prints had been around for more than 100 years. They were cheap, familiar and loved, and nobody was complaining about them. And a camera that needed no film threatened the business that paid everyone's salary. Kodak received a patent on Sasson's camera in 1978, but it was never put into production, and Sasson was told not to show it to outsiders.

It would be unfair to say Kodak ignored digital forever. It kept doing research and later sold digital cameras. Sasson himself helped build one of the first commercially available digital cameras in 1994, working with Nikon. But Kodak moved slowly and cautiously, always trying to protect film. One account says it took Kodak roughly 18 years after the prototype to truly make the switch.

By then, the world had changed. Digital cameras got cheaper and better, and then smartphones put a camera in almost every pocket. People stopped buying film and stopped printing most of their photos. The business that Kodak had protected for so long shrank fast, and its new businesses were not big enough to replace it.

On January 19, 2012, Eastman Kodak filed for bankruptcy protection. It listed about $6.75 billion in debts against about $5.1 billion in assets and borrowed $950 million from Citibank to keep operating. Kodak came out of bankruptcy in 2013 as a much smaller company.

The most painful part of the story is that Kodak did not lose because it lacked ideas or smart people. It had invented the future in its own lab. What it lacked was the willingness to let that future replace the past while there was still time.