Kodak’s bankruptcy got me thinking: In these final years of circuit-switched telephone service, are there some lessons we can learn from the world of film? What lessons can the world of photography hold for telephony?
If you think about it, plain old telephone service (POTS as we acronym-obsessed telecom folk call it) is not all that different from silver halide emulsion on polyester base (FILM –who knew, it’s not an acronym). They both have four letters, they’ve both been around since the late 1800s and they both made large companies lots of money. And, yes, they’re both being replaced by newer, cheaper, better technology.
Other parallels:
- Like digital photography, Voice over IP protocols like SIP allow for a separation between the physical media (think film) and the content (think photos).
- The incremental cost of taking a digital photo is pretty close to zero, as is a SIP call within an enterprise.
- With digital, you no longer need a dedicated device to take photos (i.e. a camera). So too with SIP. In-fact, your smart phone can do both (amongst a plethora of other things).
It’s not that Kodak didn’t see the change coming or that they had no strategy. They did, in spades. If anything, they might be faulted for having too many strategies. When they realized the film cash cow would dry-up they decided to branch-out. Displays, components, commercial printing, digital imaging, health imaging, commercial imaging and, of course, film imaging were all part of the plan for the future.
So, what happened? I think it was the convergence of a couple of factors:
- Film sales fell off a cliff sooner than expected
- The peanut butter approach to strategy (spreading resources evenly across multiple initiatives) meant none of these strategies got the full focus of the organization
Sound familiar? It should. At the end of the day, staying ahead of technological change is tough –and armchair quarterbacks like yours truly have the benefit of hindsight. Fortunately, we at Level 3 don’t have a large POTS embedded base –and therefore don’t have that internal conflict that comes from cannibalizing a profitable revenue stream. We embrace this trend and make no apologies for our role as catalysts in accelerating the migration to SIP.
Still, surviving and thriving in a world full of hungry innovators requires a focused strategy. Even a high-tech innovator like Level 3 has had to adapt to technological change. You may remember that at some point in time we were the largest Managed Modem provider, but it’s not a large part of our business anymore. Just saying.
And since Level 3 and Kodak share a Rochester connection (granted, with 7,000 employees left in the flower city they far outnumber our 500 hands-down), we certainly wish Kodak the best. With such strong brand equity in the photography industry I’m willing to bet they will find a way to make this their moment.
About JP Gonzalez
if we are speaking from the product sales perspective, i’d agree 100% with you, but film its not only a product, it’s a media for artist, that cannot be replaced directly with digital pictures.
Of course, we are a company, companies needs to sale as animals needs to eat, but FILM vs POTS it not a perfect analogy (just my pov)
In my opinion, the analogy fails because digital photography facilitated innovative consumer products and eliminated “service industry” – film production and processing. But alas, thus far VoIP has failed to do it. Still we need a service provider, incur subscription fees of one kind or another. Not much innovation in end-user devices.
Thanks for the candid feedback, Aswath. Regarding innovation, while I concede there’s room to grow, I would point-out that any device with a processor and a connection to the Internet can act as your phone. Furthermore, with unified communications, this phone experience can be greatly enriched with presence, video and integration to other applications. As for the subscription fees you reference, VoIP makes it possible to substantially lower these, however, as part of the “service industry” I completely agree we’re still needed (alas, every analogy must break-down sometime
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Nice reading you. In general terms I agree with the matching or analogy. However, I would prefer to run the comparison regardless technologies and instead, keeping focus on the applications. Telephony is one of the oldest business applications and even running SIP, the application is still the same… just making calls, finding people, communicating ideas…as always. The wireline voice transmission, private or switched, circuit or packet based… Always voice. The innovative new app is voice and data mobility and all the features the smart phones and GSM+WIFI driven tablets could offer as a powerful business tool. Just to conclude, agree we may learn a lot from Kodak tourney. Perhaps the strongest lesson should be not to spread efforts out of many strategic tracks. We need crystal clear focus in our target segments to be success in the marketplace. Having said that, next step in the enterprise voice arena is to became a converged player getting into the mobile voice business… How? Will continue…
Antonio, focused investment is vital and I concur smart mobile devices are today and will continue to be for the foreseeable future, key forces driving the shift from a stand-alone telephony experience to true Unified Communications, where cross-application interplay is the game changer.