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customers on the Internet

Kodak CEO chats with
customers on the Internet

The following is an edited transcript of CEO George Fisher’s hour-long session at an Eastman Kodak Customer Chat Forum, which took place on the Internet’s World Wide Web. The session was held on Wednesday, Aug. 16 from 4 p.m. to 5 p.m.

3:58PM EDT
Hi! I’m George Fisher, CEO of Eastman Kodak Company. Welcome to Kodak’s Customer Chat Forum. During the next hour or so, I’d be happy to address any questions you may have. If I don’t get to one of your questions today, please submit it to our “Guest Book” at http://www.kodak.com/guestBook.shtml and our customer support center will provide the answer. Since this chat session was announced, we’ve had several questions submitted to our “Guest Book” from customers who could not make it today. I’ve prepared responses to these questions and will insert them while I’m preparing answers to your “live” questions. They will be posted as “previous Guest Book questions.” That’s enough about process; let’s get started!

Question from the audience: 3:59PM EDT
What does Kodak see on the horizon in the area of digital images? Specifically, will there be scanners using lasers as light sources, instead of bulbs?

George Fisher: 4:01PM
We eventually see Kodak and others in the industry taking pictures to whole new places in people’s lives. Many of those pictures will be derived from digital cameras but in the near future most of them will be derived from traditional cameras and photographic film and subsequently scanned by many varieties of scanners, which currently exist today.

Melissa Whittaker (previous Guest Book question): 4:02PM EDT
What makes your products so good that they have to be so expensive? I’d rather buy cheap then spend the extra money. I love your products, especially the film, but some of us do not have the money to spend on Kodak. We all have a budget to live on and some of us just can not spend that extra dollar. –A Housewife

George Fisher: 4:03PM EDT
We believe our Kodak products offer the best combination of quality and price for our worldwide consumers. For sure, you can buy less expensive film; and, in fact, we try to offer some more economical multi-pack configurations of film, but overall we feel our first responsibility to our customers is to assure high quality and the best value film in the world.

Wesley L. Stuart (previous Guest Book question): 4:06PM EDT
Eastman Kodak Company is certainly one of the most prestigious pioneers of the photography industry. Their participation in the presentations of pictures in the blossoming Internet and computer industry is surely a must, for their agenda. Will Kodak enter the competition in the viewer field, particularly to encompass and consolidate the many types of viewers of photography; still and motion pictures? It would seem to me that an expert like Eastman Kodak would naturally want to be and have the ability to be the leader in the presentation of photography in any new medium.

George Fisher: 4:08PM EDT
Since we, at Kodak, view our role as that of being the world’s leader in imaging, we must think, even more broadly than we have in the past, about how we participate in bringing people’s precious pictures into a form where they can be most readily viewed and appreciated. To this end, you will find Kodak continuing to provide the highest quality pictorial output for still images; and, as a result of the digital revolution, even moving into more and varied forms of hard copy and soft display options for our customers. By the way, I have a question for the audience. Do you use pictures in any of your computer-related documents or communications? If yes, how? If no, why not?

George Merelos: 4:10PM EDT
Hi, I’m George from PHOTO GEMStm. We can be found at Email-photogem@interaccess.com to find out more about my business, send me a note. The big question I have is the direction of services you mentioned in your qt movie? We all know and USE Kodak products, but what services are new/coming tomorrow? I thank you in advance for your response. Sincerely, George Merelos, CPP Certified Pro. Photog. Professional Photographers of America.

George Fisher: 4:12PM EDT
There are many new services which are now being or will soon be introduced into the photographic world through the combination of traditional and digital imaging tools. For instance, the whole new area of what we call image utilization allows people to take their pictures, scan them, manipulate them, and then print them out on a thermal copier or other output device and introduce them into other creative formats like calendars, greeting cards. etc. In addition, we will begin to see much more use of broadband communications capabilities to send images which have been digitized from one point to another. The recent work we announced with Sprint is a very important beginning in this respect.

Mark Par: 4:12PM EDT
Some Japanese observers have said that if Kodak’s complaint against Fuji is successful, then Fuji will file a complaint against Kodak alleging anti-competitive activity by Kodak in the United States. Newspaper accounts from Japan indicate that the president of Fuji Film intends to respond aggressively. Do you think that this will happen? If so, are you worried that such a suit will damage Kodak’s reputation among U.S. consumers? What will Kodak do to preserve the good will of American consumers?

George Fisher: 4:13PM EDT
The Kodak complaint against Fuji is essentially a complaint about our inability to gain access to a large portion of the Japanese consumer film market. We believe that the distribution system which Fuji uses in Japan systematically excludes outsiders in a way which violates Japan’s own anti-monopoly laws and in a way which has been tolerated by the Japanese Fair Trade Commission. Since the US Government has diligently enforced US anti-trust laws and, in particular, Kodak’s practices were thoroughly examined in our effort to have anti-trust consent decrees removed from us last year, we feel confident that we are in good shape in the US market and we don’t see that there will be any negative repercussions in this country because of our efforts to gain fair access to the Japanese market.

Fred Shippey: Senior Editor, Future Image Report: 4:15PM EDT
As a writer and consultant on electronic imaging topics, I’ve had several opportunities to talk to Carl Gustin, and I think he’s great. His new job sounds like it will benefit Kodak’s worldwide electronic imaging market (with tremendous potential). However, this leaves a “hole” in D&AI management. When do you expect to name a replacement?

George Fisher: 4:16PM EDT
I absolutely agree with you that Carl Gustin has been a superb addition to Eastman Kodak Company and his contributions to our digital and applied imaging strategy have been most significant. In his new role, Carl will help me identify his successor for D&AI and also make sure that we make our digital skills and products pervasive throughout all of our Kodak businesses. So, I really see the move that Carl is now taking as strengthening our D&AI area because we will have not only his contributions but also the contributions of a major new player from the outside world. We would hope to have concluded our discussions with this person within the next three months.

Bill McCahey: 4:18PM EDT
Does Kodak have any plans to develop a Web site for your stock image division, Image Bank? If not, do you plan to make it a part of the Kodak Picture Exchange?

George Fisher: 4:19PM EDT
We do not have any plans to develop a Web site for Image Bank or to make it a part of the Kodak Picture Exchange; however, as we mentioned on March 28, Kodak Picture Exchange will be a very important part of our partnership with Sprint.

Question from the audience: 4:20PM EDT
Thanks for coming to this forum, George. My question: Are you seeing Photo CD stand on its own as a revenue generator for Kodak, or is it partially justified by increased film sales?

George Fisher: 4:21PM EDT
Photo CD has turned into an outstanding success for Kodak in the commercial markets. As you may know, we did not initially aim it at the commercial markets but rather at the consumer world and I believe that was a mistake which we have now rectified. Our efforts to further open up Photo CD as announced on March 28 have also given significant new impetus to Photo CD as a de facto imaging format standard.

Yoshi Sato: 4:21PM EDT
Dear Mr. Fisher: Will Kodak manufacture private-label film for large U.S. retailers such as Wal-Mart in
the near future?

George Fisher: 4:22PM EDT
As a matter of policy and legal constraint through anti-trust consent decrees, Kodak has historically not offered private-label film in the US. Given that the consent decrees have recently been lifted, we do now have that option, but I am not sure there is any good reason for us to offer private-label film in this market or, for that matter, in most of the world’s markets.

David Evans: 4:23PM EDT
How well do you know your customers? Who is the largest end user of the Photo CD format?

George Fisher: 4:25PM EDT
I have spent a good part of my first year and a half at Kodak getting around the world to visit with Kodak customers but I must admit I don’t have a clue as to who the largest end-user of the Photo CD format might be. Your question prompts me to try to find out as soon as I can. Thanks for asking.

Claude Dion: 4:25PM EDT
We hear a lot about digital photography, but are there any major developments we can expect in the area of traditional photography?

George Fisher: 4:26PM EDT
One of the most significant introductions of traditional film and camera systems will take place next year through what we call the advanced photographic system, APS. APS is basically a smart film system, with magnetics imbedded on the film allowing information to be stored with respect to the conditions when the picture was snapped and information useful to processing equipment to assure higher quality prints. In addition, this new format will enable drop-in-load film cartridges and smaller camera size configurations. We believe this exciting new introduction will create significant demand in the marketplace for both the film and new cameras.

Dan Kibby: 4:27PM EDT
What’s next for Kodak? As a photo lab, what can we expect in the next 5 years–the next 10?

George Fisher: 4:28PM EDT
I think that from the photo lab viewpoint over the next 5 to 10 years we will see your world increasingly becoming a focal point for new services which combine the best of traditional processing with the capabilities of digital equipment. For instance, increasingly people will want their film scanned and will want the ability to preview low resolution versions of their scanned images in their home or place of work and after this previewing select the types of prints they want and where they want them sent. This is just the beginning.

Peter Cameron (previous Guest Book question): 4:29PM EDT
Will the availability of Kodak Select Photographic Film in Australia (particularly Western Australia) continue to be an ongoing problem or does Kodak have plans to eradicate this current situation. I know several people who have been experiencing problems obtaining this particular product and it would be great if I can pass on some good news.

George Fisher: 4:30PM EDT
I asked Andy Sierakowski, manager of professional and printing imaging for Australia-New Zealand, to answer this question. Here is his reply: Thank you for bringing the Customer Chat question relating to availability of Kodak Select film in Australia to my attention. It did come as somewhat of a surprise to both myself and my staff. We are not aware of any outstanding issues of supply relating to this product. We have been selling both the neutral and warm color balance versions of Select 100 in 35 and 120 formats in Australia for almost two years now. More recently we also released Select 50 in 135 and 120 formats (neutral color balance only). Our monthly order fulfillment rate for the color reversal film LOB overall has averaged better than 98% this year and the relatively few concerns have been for causes assignable to items other than Select. Whilst we do not track order fulfillment rate specifically for Select, I am sure that any persistent availability problems would have been brought to our attention either via comments to the sales force or directly through customer relations. Perhaps the question relates to products within the Select range which we have selected to sell as “non-stock” items due to low demand. Long roll and 4×5 inch sheet Select 100 are two such examples. The issue may relate to the warm balance version of Select 50 which we do not sell in this country. It may be that we have fallen down in communicating such decisions widely enough to the market. We are extremely keen to resolve this customer concern. I will follow up directly with Mr. Cameron.

D. Evans: 4:31PM EDT
What are the future plans for the PhotoCD Format? I have read several articles on the new format. How will this impact the current PhotoCD Format?

George Fisher: 4:32PM EDT
As we mentioned in our March 28 meeting, we are working to introduce a new and improved format including some of the attributes of Live Picture, but you should remember as we mentioned in March that this will not obsolete your existing Photo CD format usage.

Albert Janco: 4:33PM EDT
When do you plan to put film and paper specifications on the Kodak WWW home page?

George Fisher: 4:33PM EDT
We have substantial information on our development site which we are working to define for release in the next several weeks.

Dan Kinsella: 4:34PM EDT
Currently I use pictures etc. very rarely in my reports because most managers don’t think they add to the information in the report, and so will not pay for color scanners etc. that would be necessary to get it into the computer to use it. So I just go down to Kinko’s to get an occasional picture scanned in.

George Fisher: 4:35PM EDT
Thanks for your comment on the reluctance of your manager to allow you to spend the money to scan images and use them in reports. Quite honestly I think one of our challenges is to show people increasingly how effective high quality images can be in compound documents and how easy they are to incorporate in those documents. I really believe that we the industry are on the verge of a major breakthrough in achieving the next generation of compound documents utilizing full-color, photo-realistic images which are easily included and manipulated.

Steve Davis: 4:36PM EDT
I hope to produce my first low budget feature film in the next year. I was disappointed to find no information on Kodak motion picture films in your home page.

George Fisher: 4:36PM EDT
I think you will be very impressed with our motion picture and television business offering which should be up sometime in September. I appreciate your patience in waiting. I’d like to ask another question of all of you. If you could go to a store and have an attendant combine a picture for you (or a significant other, friend, child, etc. ) with a sports figure, celebrity, or movie star of your choice and produce a custom photo quality poster in less than 10 minutes, would that interest you? How would you use it? How much would you pay for such a poster?

Kevin Muray: 4:38PM EDT
Do you have a e-mail address, accessible from the Internet ?

George Fisher: 4:39PM EDT
I do have an e-Mail address accessible from the Internet, but I must admit that I am somewhat reluctant to put it out publicly for fear that I will be inundated much as Bill Gates was. I believe he is probably still trying to catch up on his backlog and I’d rather not disappoint people with my inability to answer all their inquiries on the Net.

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