Kodak Hunts For Gallery Buyer

kodak logo
Kodak is seeking a buyer for their online image storage business

Several news outlets are reporting on a story in the Wall Street Journal that Eastman Kodak is seeking a buyer for their Kodak Gallery, the photo sharing arm of their digital camera business.

While this sale will probably be a routine transition for most customers, it does point up that one of the dark sides of online photo sharing sites is that the hosting site controls your images and can use them and transfer them in ways you may not have imagined.

The ability of online image galleries to do that comes from the Terms of Service, or ToS. You should really read those instead of just clicking through. If you do, you may be amazed at how many rights you are actually granting the host company.

Back in July, Twitpic prompted user backlash when they modified their ToS to claim ownership of the images posted there. The old ToS:

“You may not grant permission to photographic agencies, photographic libraries, media organizations, news organizations, entertainment organizations, media libraries, or media agencies to retrieve from Twitpic for distribution, license, or any other use, content you have uploaded to Twitpic.”

In other words, Twitpic said you couldn’t sell your own images! After virulent and vocal push-back from users, Twitpic modified their ToS:

“You retain all ownership rights to Content uploaded to Twitpic. However, by submitting Content to Twitpic, you hereby grant Twitpic a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the Content in connection with the Service and Twitpic’s (and its successors’ and affiliates’) business, including without limitation for promoting and redistributing part or all of the Service (and derivative works thereof) in any media formats and through any media channels.”

Even though you retain ownership, Twitpic reserves the right to sell your images to news agencies.  WENN signed a deal with Twitpics to buy celebrity photos uploaded to the site. Your pictures, their sale. Nice deal, huh?  And that’s nothing compared to what can happen if the company ended up going out of business.

In a bankruptcy sale the situation becomes even more difficult. Then the images in an online image sharing site become just another company asset and the bankruptcy trustee has the ability to modify the terms on which company assets are sold and distributed. So the ToS you clicked through might not offer much protection if the company goes bankrupt. The court and trustee could theoretically grant full ownership to the new buyers as part of the sale.

As far as I know there haven’t been any court cases involving the use of images obtained in a bankruptcy trial, but it’s only a matter of time. That’s why it’s a good idea to read those terms of service and think carefully about the images you store online.

If Kodak doesn’t find a buyer for Gallery and goes out of business, we may get our first test case sooner than most of us realize.

Is Kodak Dead?

Dead company walking

Kodak moved quickly to swat down rumors of bankruptcy last week, though they didn’t provide a particularly good explanation for why a company in obvious financial distress retained Jones Day, a law firm specializing in corporate bankruptcy.

Kodak was founded in 1888 and quickly captured the photography market with a combination of mass production, extensive R&D, and a reputation for quality. Their motto “You push the button, we do the rest” brought photography out of the realm of scientists and chemists and put cameras in the hands of anyone who could afford the processing.

The 131 year old company has been struggling for some time and it really comes as little surprise to those of us in the photography business. Kodak stopped making their flagship Kodachrome 64 in 2009, after previously phasing out other speeds in previous years. On December 30, 2010, Dwayne’s Photo in Parsons, Kansas, developed the final roll of Kodachrome, bringing to a close the product that dominated the photography market since 1935.

Although not unexpected, Kodak’s passing will mark the end of an era for many in photography. The days when seeing the big yellow and red sign in a foreign country meant you count on finding film in date, fresh batteries and other photography supplies you could count on, even far from home.

Kodak was killed off by a variety of factors, not just digital photography. In 1948, just a few days before Thanksgiving, Edwin Land offered consumers a the first instant cameras. Why wait for processing when you could get pictures on the spot?

In the 1980’s Japan’s Fuji started selling rolls of film way below what Kodak was use to charging. Fuji’s willingness to cut prices was popular with growing discount retailers like Walmart.

Then there was Kodak’s bizarre purchase of Sterling Drug in 1988. Instead of investing in R&D, Kodak was investing in M&A (Mergers and Acquisitions) in fields they didn’t understand.

The digital photography trend finished off what Fuji started. Kodak was never able to rationalize the transition to lower margin digital cameras when so much of their profit came from their film business.

I remember Kodak sponsoring seminars in Hollywood to promote movie production on film in the mid-2000’s, right up until RED fielded their first RED One in 2007. While other companies were working hard to put big sensors behind quality glass, Kodak was still promoting film.

That seems bizarre considering Kodak had big sensor technology before many other companies in digital photography. We may never know why we didn’t see the Kodak One instead of the RED One or the Kodak big chip DSLR instead of the Canon 5D.

What do you think, is Kodak dead or can they reinvent themselves?