Kodak Invented the Digital Camera — So Why Did It Collapse?

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In 1975, Kodak invented the future of photography. The first digital camera wasn't invented by Apple or Sony. It was invented by Kodak. And yet, less than four decades later, Kodak filed for bankruptcy. So how did the company that invented digital photography lose the future it helped create? This is the Kodak case. For most of the twentieth century, Kodak was one of the biggest names in photography. Its business model was brilliant. Sell affordable cameras, then make money from film, processing, and prints. For decades, the model worked. Then came 1975. Kodak engineer Steven Sasson built the world's first digital camera. It was huge by today's standards. The image was tiny and black and white. But the technology proved something revolutionary: Photography no longer needed film. And Kodak knew it. The company invested heavily in digital photography, developed digital cameras, and eventually held more than 1,100 digital imaging patents. So Kodak didn't simply ignore digital. The real problem was its business model. Kodak had built a massive and profitable company around film. Digital photography threatened that business. A digital photograph didn't require a roll of film. It didn't need to be developed. People could take hundreds of pictures without buying another roll. Then smartphones made the change even more dramatic. The camera became part of the device people already carried in their pockets. Kodak tried to transform itself. By 2011, the company said roughly 75 percent of its revenue came from digital businesses. But digital revenue wasn't enough to replace the economics of Kodak's enormous film business. On January 19, 2012, Eastman Kodak filed for Chapter 11 bankruptcy protection. The Kodak story isn't really about failing to see the future. Kodak saw it. Kodak invented it. But seeing the future and building a business that can survive it are two very different things. Kodak didn't simply fail to see the future. It saw the future — but struggled to build a business that could survive the transition.

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