ImaginativePRO Blog

"THE UNSEEN TITANIC," STUNNING NEW PHOTOS OF THE RMS TITANIC ON THE 100-YEAR ANNIVERSARY OF THE FATEFUL TRAGEDY

Click Image to view the first-ever views of the complete remains of the ship in full profile appearing in the April 2012 edition of National Geographic Magazine

At 2:20 a.m. on April 15, 1912, the “unsinkable” RMS Titanic disappeared beneath the waves, taking with her 1,500 souls. One hundred years later, new technologies have revealed the most complete—and most intimate—images of the famous wreck.

The wreck sleeps in darkness, a puzzlement of corroded steel strewn across a thousand acres of the North Atlantic seabed. Fungi feed on it. Weird colorless life-forms, unfazed by the crushing pressure, prowl its jagged ramparts. From time to time, beginning with the discovery of the wreck in 1985 by Explorer-in-Residence Robert Ballard and Jean-Louis Michel, a robot or a manned submersible has swept over Titanic’s gloomy facets, pinged a sonar beam in its direction, taken some images—and left.

In recent years explorers like James Cameron and Paul-Henry Nargeolet have brought back increasingly vivid pictures of the wreck. Yet we’ve mainly glimpsed the site as though through a keyhole, our view limited by the dreck suspended in the water and the ambit of a submersible’s lights. Never have we been able to grasp the relationships between all the disparate pieces of wreckage. Never have we taken the full measure of what’s down there.

 

Until now. In a tricked-out trailer on a back lot of the Woods Hole Oceanographic Institution (WHOI), William Lange stands over a blown-up sonar survey map of theTitanic site—a meticulously stitched-together mosaic that has taken months to construct. At first look the ghostly image resembles the surface of the moon, with innumerable striations in the seabed, as well as craters caused by boulders dropped over millennia from melting icebergs.

Sonar images of the forward (bow) and rear sections (stern) of the RMS Titanic and the entire debris field of the Titanic lying at the bottom of the Northern Atlantic Ocean (Click Images To Enlarge)

On closer inspection, though, the site appears to be littered with man-made detritus—a Jackson Pollock-like scattering of lines and spheres, scraps and shards. Lange turns to his computer and points to a portion of the map that has been brought to life by layering optical data onto the sonar image. He zooms in, and in, and in again. Now we can see the Titanic’s bow in gritty clarity, a gaping black hole where its forward funnel once sprouted, an ejected hatch cover resting in the mud a few hundred feet to the north. The image is rich in detail: In one frame we can even make out a white crab clawing at a railing.

Here, in the sweep of a computer mouse, is the entire wreck of the Titanic—every bollard, every davit, every boiler. What was once a largely indecipherable mess has become a high-resolution crash scene photograph, with clear patterns emerging from the murk. Lange says.  

“Now we know where everything is.  After a hundred years, the lights are finally on.”

Bill Lange is the head of WHOI’s Advanced Imaging and Visualization Laboratory, a kind of high-tech photographic studio of the deep. A few blocks from Woods Hole’s picturesque harbor, on the southwestern elbow of Cape Cod, the laboratory is an acoustic-tiled cave crammed with high-definition television monitors and banks of humming computers. Lange was part of the original Ballard expedition that found the wreck, and he’s been training ever more sophisticated cameras on the site ever since.

Sonar images of the forward half of the RMS Titanic at the bottom of the Northern Atlantic Ocean and image of the ship showing the application forward section (Click Image To Enlarge) 

This imagery, the result of an ambitious multi-million-dollar expedition undertaken in August-September 2010, was captured by three state-of-the-art robotic vehicles that flew at various altitudes above the abyssal plain in long, preprogrammed swaths. Bristling with side-scan and multibeam sonar as well as high-definition optical cameras snapping hundreds of images a second, the robots systematically “mowed the lawn,” as the technique is called, working back and forth across a three-by-five-mile target area of the ocean floor. These ribbons of data have now been digitally stitched together to assemble a massive high-definition picture in which everything has been precisely gridded and geo-referenced.

National Oceanic and Atmospheric Administration (NOAA) archaeologist James Delgado, the expedition’s chief scientist said. 

“This is a game-changer.  In the past, trying to understand Titanic was like trying to understand Manhattan at midnight in a rainstorm—with a flashlight. Now we have a site that can be understood and measured, with definite things to tell us. In years to come this historic map may give voice to those people who were silenced, seemingly forever, when the cold water closed over them.”

What is it about the wreck of the R.M.S. Titanic? Why, a century later, do people still lavish so much brainpower and technological ingenuity upon this graveyard of metal more than two miles beneath the ocean surface? Why, like Pearl Harbor, ground zero, and only a few other hallowed disaster zones, does it exert such a magnetic pull on our imagination?

These new photos, shot using state-of-the-are technology by independent research group Woods Hole Oceanographic Institution, provide viewers with a greater understanding of what happened on that fateful April 15, 1912.

RMS Titanic bucked as it blowed nose-first into the seabed, leaving the forward hull buried deep in mud--obscuring, possibly forever, the damage inflicted by the iceberg (Click Image To Enlarge)

RMS Titanic's battered stern is captured overhead here.  Making sense of this tangle of metal presents endless challenges to experts. (Click Image To Enlarge)

RMS Titanic's battered stern, captured here in profile, bears witness to the extreme trauma inflicted upon it as it corkscrewed to the bottom (Click Image To Enlarge)

Ethereal views of Titanic's bow (modeled) offer a comprehensiveness of detail never seen before (Click Image To Enlarge)

Researchers Kirk Wolfinger, top left, Rushmore DeNooyer, and Tony Bacon put together the 100,000 sonar images of the RMS Titanic for a History Channel documentary (Click Image To Enlarge)

For some the sheer extravagance of Titanic’s demise lies at the heart of its attraction. This has always been a story of superlatives: A ship so strong and so grand, sinking in water so cold and so deep. For others the Titanic’s fascination begins and ends with the people on board. It took two hours and 40 minutes for the Titanic to sink, just long enough for 2,208 tragic-epic performances to unfold, with the ship’s lights blazing. One coward is said to have made for the lifeboats dressed in women’s clothing, but most people were honorable, many heroic. The captain stayed at the bridge, the band played on, the Marconi wireless radio operators continued sending their distress signals until the very end. The passengers, for the most part, kept to their Edwardian stations. How they lived their final moments is the stuff of universal interest, a danse macabre that never ends.

But something else, beyond human lives, went down with the Titanic: An illusion of orderliness, a faith in technological progress, a yearning for the future that, as Europe drifted toward full-scale war, was soon replaced by fears and dreads all too familiar to our modern world. James Cameron told me.

“The Titanic disaster was the bursting of a bubble.  There was such a sense of bounty in the first decade of the 20th century. Elevators! Automobiles! Airplanes! Wireless radio! Everything seemed so wondrous, on an endless upward spiral. Then it all came crashing down.”

A portion of RMS Titanic's steel hull that broke off when she sunk. Shows several portals and hundreds of rivets (Click Image To Enlarge)

The mother of all shipwrecks has many homes—literal, legal, and metaphorical—but none more surreal than the Las Vegas Strip. At the Luxor Hotel, in an upstairs entertainment court situated next to a striptease show and a production of Menopause the Musical, is a semipermanent exhibition of Titanic artifacts brought up from the ocean depths by RMS Titanic, Inc., the wreck’s legal salvager since 1994. More than 25 million people have seen this exhibit and similar RMST shows that have been staged in 20 countries around the world.

 

I spent a day at the Luxor in mid-October, wandering among the Titanic relics: A chef’s toque, a razor, lumps of coal, a set of perfectly preserved serving dishes, innumerable pairs of shoes, bottles of perfume, a leather gladstone bag, a champagne bottle with the cork still in it. They are mostly ordinary objects made extraordinary for the long, terrible journey that brought them to these clean Plexiglas cases.

I passed through a darkened chamber kept as cold as a meat locker, with a Freon-fed “iceberg” that visitors can go up to and touch. Piped-in sighs and groans of rending metal contributed to the sensation of being trapped in the belly of a fatally wounded beast. The exhibit’s centerpiece, however, was a gargantuan slab of Titanic’s hull, known as the “big piece,” that weighs 15 tons and was, after several mishaps, hoisted by crane from the seabed in 1998. Studded with rivets, ribbed with steel, this monstrosity of black metal reminded me of a T. rex at a natural history museum: impossibly huge, pinned and braced at great expense—an extinct species hauled back from a lost world.

The RMST exhibit is well-done, but over the years many marine archaeologists have had harsh words for the company and its executives, calling them grave robbers, treasure hunters, carnival barkers—and worse. Robert Ballard, who has long argued that the wreck and all its contents should be preserved in situ, has been particularly caustic in his criticism of RMST’s methodologies. Ballard told me. 

“You don’t go to the Louvre and stick your finger on the Mona Lisa.  You don’t visit Gettysburg with a shovel. These guys are driven by greed—just look at their sordid history.”

In recent years, however, RMST has come under new management and has taken a different course, shifting its focus away from pure salvage toward a long-term plan for approaching the wreck as an archaeological site—while working in concert with scientific and governmental organizations most concerned with the Titanic. In fact, the 2010 expedition that captured the first view of the entire wreck site was organized, led, and paid for by RMST. In a reversal from years past, the company now supports calls for legislation creating a protected Titanic maritime memorial. Late in 2011 RMST announced plans to auction off its entire $189 million collection of artifacts and related intellectual property in time for the disaster’s hundredth anniversary—but only if it can find a bidder willing to abide by the stringent conditions imposed by a federal court, including that the collection be kept intact.

I met RMST’s president, Chris Davino, at the company’s artifacts warehouse, tucked next to a dog grooming parlor in a nondescript block on the edge of Atlanta’s Buckhead district. Deep inside the climate-controlled brick building, a forklift trundled down the long aisles of industrial shelving stacked with meticulously labeled crates containing relics—dishes, clothing, letters, bottles, plumbing pieces, portholes—that were retrieved from the site over the past three decades. Here Davino, a dapper, Jersey shore-raised “turnaround professional” who has led RMST since 2009, explained the company’s new tack.  Davino said.  

“For years, the only thing that all the voices in the Titanic community could agree on was their disdain of us.  So it was time to reassess everything. We had to do something beyond artifact recovery. We had to stop fighting with the experts and start collaborating with them.”

Which is exactly what’s happened. Government agencies such as NOAA that were formerly embroiled in lawsuits against RMST and its parent company, Premier Exhibitions, Inc., are now working directly with RMST on various long-range scientific projects as part of a new consortium dedicated to protecting the wreck site.   Dave Conlin, chief marine archaeologist at the National Park Service, another agency that had been vehemently critical of the company says. 

“It’s not easy to thread the needle between preservation and profit.  RMST deserved the flak they got in years past, but they also deserve credit for taking this new leap of faith.”

Scholars praise RMST for recently hiring one of the world’s preeminent Titanic experts to analyze the 2010 images and begin to identify the many unsorted puzzle pieces on the ocean floor. Bill Sauder is a gnome-like man with thick glasses and a great shaggy beard that flexes and snags on itself when he laughs. His business card identifies him as a “director of Titanic research,” but that doesn’t begin to hint at his encyclopedic mastery of the Titanic’s class of ocean liners. (Sauder himself prefers to say that he is RMST’s “keeper of odd knowledge.”)

When I met him in Atlanta, he was parked at his computer, attempting to make head or tail of a heap of rubbish photographed in 2010 near the Titanic’s stern. Most Titanic expeditions have focused on the more photogenic bow section, which lies over a third of a mile to the north of most of the wreckage, but Sauder thinks that the area in the vicinity of the stern is where the real action will likely be concentrated in years to come—especially with the new RMST images providing a clearer guide.  Sauder said.   

“The bow’s very sexy, but we’ve been to it hundreds of times.  All this wreckage here to the south is what I’m interested in.”

In essence Sauder was hunting for anything recognizable, any pattern amid the chaos around the stern.  He told me.  

“We like to picture shipwrecks as Greek temples on a hill—you know, very picturesque.  But they’re not. They’re ruined industrial sites: piles of plates and rivets and stiffeners. If you’re going to interpret this stuff, you gotta love Picasso.”

Sauder zoomed in on the image at hand, and within a few minutes had solved at least a small part of the mystery near the stern: Lying atop the wreckage was the crumpled brass frame of a revolving door, probably from a first-class lounge. It is the kind of painstaking work that only someone who knows every inch of the ship could perform—a tiny part of an enormous Where’s Waldo? sleuthing project that could keep Bill Sauder busy for years.

In late October I found myself in Manhattan Beach, California, inside a hangar-size film studio where James Cameron, surrounded by dazzling props and models from his 1997 movie,  Titanic, had assembled a roundtable of some of the world’s foremost nautical authorities—quite possibly the most illustrious conclave of Titanic experts ever gathered. Along with Cameron, Bill Sauder, and RMST explorer Paul-Henry Nargeolet, the roundtable boasted Titanic historian Don Lynch and famed Titanic artist Ken Marschall, along with a naval engineer, a Woods Hole oceanographer, and two U.S. Navy architects.

Cameron could more than hold his own in this select company. A self-described “rivet-counting Titanic geek,” the filmmaker has led three expeditions to the site. He developed and piloted a new class of nimble, fiber-spooling robots that brought back never before seen images of the ship’s interior, including tantalizing glimpses of the Turkish bath and some of the opulent staterooms.

Cameron has white hair and a close-clipped white goatee, and when he’s wound up on Titanic matters, a certain Melvillean intensity weighs on his brow. Cameron has also filmed the wreck of the Bismarck and is now building a submarine to take him and his cameras to the Mariana Trench. But the Titanic still holds him; he keeps swearing off the subject, only to return. He told me at his Malibu compound. 

“There’s this very strange mixture of biology and architecture down there—this sort of biomechanoid quality.  I think it’s gorgeous and otherworldly. You really feel like this is something that’s gone to Tartarus—to the underworld.”

At Cameron’s request, the two-day roundtable would concentrate entirely on forensics: Why did the Titanic break up the way she did? Precisely where did the hull fail? At what angle did the myriad components smash into the seabed? It was to be a kind of inquest, in other words, nearly a hundred years after the fact.

Cameron said. 

“What you’re looking at is a crime scene.  Once you understand that, you really get sucked into the minutiae. You want to know: How’d it get like that? How’d the knife wind up over here and the gun over there?”

Perhaps inevitably, the roundtable took off in esoteric directions—with discussion of glide ratios, shearing forces, turbidity studies. Listeners lacking an engineering sensibility would have extracted one indelible impression from the seminar: Titanic’s final moments were hideously, horrifically violent. Many accounts depict the ship as “slipping beneath the ocean waves,” as though she drifted tranquilly off to sleep, but nothing could be further from the truth. Building on many years of close analysis of the wreck, and employing state-of-the-art flooding models and “finite element” simulations used in the modern shipping industry, the experts painted a gruesome portrait of Titanic’s death throes.

The ship sideswiped the iceberg at 11:40 p.m., buckling portions of the starboard hull along a 300-foot span and exposing the six forward watertight compartments to the sea. From this moment onward, sinking was a certainty. The demise may have been hastened, however, when crewmen pushed open a gangway door on the port side in an aborted attempt to load lifeboats from a lower level. Since the ship had begun listing to port, they could not reclose the massive door against gravity, and by 1:50 a.m., the bow had settled enough to allow seawater to rush in through the gangway.

By 2:18, with the last lifeboat having departed 13 minutes earlier, the bow had filled with water and the stern had risen high enough into the air to expose the propellers and create catastrophic stresses on the middle of the ship. Then the Titanic cracked in half.

Cameron stood up and demonstrated how it happened. He grabbed a banana and began to wrench it in his hands:

“Watch how it flexes and pooches in the middle before it breaks—see that?”

The banana skin at the bottom, which was supposed to represent the doubly reinforced bottom of the hull, was the last part to snap.

Once released from the stern section, the bow shot for the bottom at a fairly steep angle. Gaining velocity as it dropped, parts began to shear away: Funnels snapped. The wheelhouse crumbled. Finally, after five minutes of relentless descent, the bow nosed into the mud with such massive force that its ejecta patterns are still visible on the seafloor today.

The stern, lacking a hydrodynamic leading edge like the bow, descended even more traumatically, tumbling and corkscrewing as it fell. A large forward section, already weakened by the fracture at the surface, completely disintegrated, spitting its contents into the abyss. Compartments exploded. Decks pancaked. Hull plates ripped out. The poop deck twisted back over itself. Heavier pieces such as the boilers dropped straight down, while other pieces were flung off “like Frisbees.” For more than two miles, the stern made its tortured descent—rupturing, buckling, warping, compressing, and gradually disintegrating. By the time it hit the ocean floor, it was unrecognizable.

Sitting back down, Cameron popped a pinched piece of banana in his mouth and ate it.  He said.  

“We didn’t want the Titanic to have broken up like this.  We wanted her to have gone down in some kind of ghostly perfection.”

Listening to this learned disquisition on the Titanic’s death, I kept wondering: What happened to the people still on board as she sank? Most of the 1,496 victims died of hypothermia at the surface, bobbing in a patch of cork life preservers. But hundreds of people may still have been alive inside, most of them immigrant families in steerage class, looking forward to a new life in America. How did they, during their last moments, experience these colossal wrenchings and shudderings of metal? What would they have heard and felt? It was, even a hundred years later, too awful to contemplate.

St. John’s, Newfoundland, is another of Titanic’s homes. On June 8, 1912, a rescue ship returned to St. John’s bearing the last recovered Titanic corpse. For months, deck chairs, pieces of wood paneling, and other relics were reported to have washed up on the Newfoundland coast.

I had hoped to pay my respects to the people who literally went down with the ship by flying to the wreck site from St. John’s with the International Ice Patrol, the agency created in the disaster’s aftermath to keep watch for icebergs in the North Atlantic sea lanes. When a nor’easter canceled all flights, I found my way instead to a tavern in the George Street district, where I was treated to a locally made vodka distilled with iceberg water. To complete the effect, the bartender plopped into my glass an angular nub of ice chipped from an iceberg, supposedly calved from the same Greenlandic glacier that birthed the berg that sank Titanic. The ice ticked and fizzed in my glass—the exhalations, I was told, of ancient atmospheres trapped inside.

I could still get a little closer, physically and figuratively, to those who rest forever with the ship. A few years before the disaster, Guglielmo Marconi built a permanent wireless station on a desolate, wind-battered spit south of St. John’s, called Cape Race. Locals claim that the first person to receive the distress signal from the sinking ship was Jim Myrick, a 14-year-old wireless apprentice at the station who went on to a career with the Marconi Company. Initially, the transmission came in as a standard emergency code, CQD. But then Cape Race received a new signal, seldom used before: SOS.

One morning at Cape Race, amid the carcasses of old Marconi machines and crystal receivers, I met David Myrick, Jim’s great-nephew, a marine radio operator and the last of a proud line of antique communicators. David said his uncle never spoke about the night the Titanic sank until he was a frail old man. By that point, Jim had lost his hearing so completely that the only way the family could converse with him was through Morse code—manipulating a smoke detector to produce high-pitched dots and dashes. David said.  

“A Marconi man to the end.  He thought in Morse code—hell, he dreamed in it.”

We went out by the lighthouse and looked over the cold sea, which crashed into the cliffs below. An oil tanker cruised in the distance. Farther out, on the Grand Banks, new icebergs had been reported. Farther out still, somewhere beyond the bulge of the horizon, lay the most famous shipwreck in the world. My mind raced with thoughts of signals bouncing in the ionosphere—the propagation of radio waves, the cry of ages submerged in time. And I imagined I could hear the voice of the Titanic herself: A vessel with too much pride in her name, sprinting smartly toward a new world, only to be mortally nicked by something as old and slow as ice.

COMMENTARY:  Everytime I watch the movie "Titanic," I get goosebumps.  It's such an incredible love story emersed with the grandeur of the RMS Titanic on her maiden voyage that would end so tragically.  Let's hope we never have to experience another tragedy like the Titanic.  

Director/Producer John Cameron did an incredible job filming the events of that terrible night in the original film "Titanic."  Cameron is bringing back "Titanic" in all her glory in 3D this time, and the film will be shown for a limited engagement beginning in April 2012.  Hope to see you there. Now the Titanic 3D Official Trailer.

 

For an authentic history of the RMS Titanic, check out the Titanic Stories , RMS Titanic, Inc and Titanic Historical Society websites.  These sites are the best of several and include some incredible content including images and videos of the ship, her passengers, the survivors and many other interesting facts about Titanic.   

I hope you enjoy this post, as much as I enjoyed expanding on the original National Geographic Magazine article.  

Courtesy in an article of the April 2012 issue of National Geographic Magazine and an article dated March 9, 2012 appearing in the Daily Mail and an article dated March 21, 2012 appearing in the Daily Mail

 

FLIXEL, AN iPHONE APP THAT TRANSFORMS YOUR IPHONE INTO A CINEMAGRAPH-MAKING MARVEL, TURNS PICS INTO ANIMATED GIFS

Click Image To View Flixel homepage

INSPIRED BY "CINEMAGRAPHS," FLIXEL LETS YOU SNAP PHOTOS AND TRANSFORM THEM INTO HIP ANIMATIONS WITH JUST A FEW SWIPES.

If you’re as big a fan of Kevin Burg and Jamie Beck’s animated-GIF "Cinemagraphs" as we are, you’ve probably wondered: How could I make some of those myself? To use Apple’s trademarked-but-annoyingly-useful phrase, there’s an app for that. It’s called Flixel, and it transforms your iPhone’s camera into a Cinemagraph-making marvel.

 

Flixel co-founder Mark Homza told Co.Design. 

"We were so enthralled by Cinemagraphs but burdened by the complexity and time required to create them.  With Flixel, we wanted to propose a creative experience that blended simplicity, artistic integrity, and pushed the boundaries of iPhone imagery."

Indeed, part of what made Burg and Beck’s Cinemagraphs so bewitching was their subtlety -- and the technical skill that no doubt went into achieving it. How can you automate and package that process into an app that any schmoe can use?

Flixel animated image of a train moving past a passenger platform (Click Image To Enlarge)

Amazingly, Flixel pulls this feat off. Simply snap a photo just like you would normally, and the magic elves inside the app capture a handful of video frames, process them, and even image-stabilize everything for you. But the real genius of Flixel’s interaction design reveals itself when it’s time to animate the GIF. Rubbing your fingertip over the image animates just that portion of the frame, so you can create subtle effects like a candle flame flickering or a cat twitching its tail. (Note: Flixel didn’t invent this clever interaction, but does refine it in comparison to similar apps like Kinotopic and Cinemagram.) If you want to get fancy, you can choose starting and ending frames for your animation, decide to repeat it or loop it back and forth (the latter avoids distracting "jump cuts"--a nice touch), and even apply Instagram-esque filters (some of which cost money--well played, guys).

The app bungles the "first impression" user experience a bit by displaying a social-network-like feed of other people’s Flixels when you launch the app. (I’d have preferred to see the camera function as the default launch screen--I don’t want to miss capturing any Cinemagraph-worthy moments.) But other than that minor quibble, using Flixel is a delight. The results aren’t as pristine-looking as Burg and Bell’s Cinemagraphs, but the ease of making them with Flixel far outweighs any other concerns. It’s the first photo-enhancing app I’ve seen since Instagram to really add unique value to the cameraphone experience. Your first Flixel might be crude, but you’ll have so much fun doing it that you’ll immediately want to make another one. And another, and another. Cat photos, baby pics, and party shots may never be the same.

Flixel of someone holding a camera and taking pictures while another individual uses his smartphone (Click Image To Enlarge)

So is Flixel just a crass "product-ization" of Bell and Burg’s innovative art form? To their credit, Mark Homza and CEO Phillipe LeBlanc acknowledge right on Flixel’s homepage that the app was "inspired by Cinemagraphs."  Homza says. 

"The app in a way, is an homage to [Bell and Burg’s] work.  The goal is to propagate the art form and make it accessible to a mainstream audience. It would be an honour to work with them and get their feedback."

Despite these good intentions, some will inevitably say Flixel is a ripoff. Others--like me--will say even if it is, who cares? This app is awesome.

Update: Some of our commenters have mentioned that if Flixel is "a ripoff" of anything, it’s earlier apps like Cinemagram and Kinotopic. I checked both of them out and while the interface conventions of these apps are very similar, Flixel’s feels uniquely well-designed. Kinotopic forces you to jump through account-setup hoops before you can even experiment with the camera--a big UX fail. And Cinemagram’s interface, while responsive, is rough and one-dimensional compared to Flixel. Cinemagram is presented as a video app rather than a photo app, so it lets you record long clips--and forces you to throw most of that material away before creating an animated GIF. (Then why let me record that much in the first place?) Flixel’s snapshot-like UX makes more sense: you capture a photo--one moment--and paint video-like effects onto it in a nonlinear, opt-in interface (versus Cinemagram’s card-like interface, which pushes you through every step, including optional afterthoughts like color filtration, whether you want to or not).

Animated image of snow falling on the ground using Cinemagram's app (Click Image To Enlarge)

Animated image of a cat scratching his ear using Knotopic's app (Click Image To Enlarge)

COMMENTARY:   That's what I call a cool iPhone app.  Wish I could tryout this new on-the-fly GIF-making app.  Too bad that I'm a loyal BlackBerry phone user, have been for years.   

Courtesy of an article dated March 26, 2012 appearing in Fast Company Design 

THE 84TH ACADEMY AWARDS SOCIAL MEDIA PREDICTIONS, THE ACTUAL WINNERS, ACADEMY AWARDS HIGHLIGHTS AND MOVIE TRAILERS

Social Media Predictions for the 84th Academy Awards

While you're filling out your Oscar ballots and reading blog predictions for Sunday night's Academy Awards, one site has already put together the list of winners. Sort of.

Flowtown, in partnership with Column Five, compiled this awesome infographic predicting the top Oscar winners for the night using 120,000 messages from social media sites like Facebook, Twitter, Picasa, YouTube and more according to Content Strategist, Kelsey Cox at Column Five.

 Click Image To Enlarge

Categories covered include Best Picture, Best Actor,  Best Actress, Best Supporting Actor and Best Supporting Actress with winners denoted by an Oscar. 

The Winners

The three hour plus 84th annual Academy Awards telecast provided few surprises:

• Meryl Streep's the Best Actress award (her third) for her role in "Iron Lady."
• "The Artist" and "Hugo" both won five Oscars each. 
• Michael Hazanavicius won Best Director for "The Artist." 
• Jean Dujardin won Best Actor for "The Artist." 
• "The Artist" won Best Picture. The first silent film to win the award since the 1920's.

Below is Moviefone's full list of the 84th Academy Award Winners.

Best Picture: "The Artist"
Best Actor: Jean Dujardin, "The Artist"
Best Actress: Meryl Streep, "The Iron Lady"
Best Supporting Actor: Christopher Plummer, "Beginners"
Best Supporting Actress: Octavia Spencer, "The Help"
Best Director: Michel Hazanavicius, "The Artist"
Best Adapted Screenplay: Alexander Payne, Nat Faxon and Jim Rash, "The Descendants"
Best Original Screenplay: Woody Allen, "Midnight in Paris"
Best Cinematography: Robert Richardson, "Hugo"
Best Art Direction: Dante Ferretti and Francesca Lo Schavo, "Hugo"
Best Costume Design: Mark Bridges, "The Artist"
Best Makeup: Mark Coulier and J. Roy Helland, "The Iron Lady"
Best Foreign Language Film: "A Separation"
Best Editing: Kirk Baxter and Angus Wall, "The Girl With the Dragon Tattoo"
Best Sound Editing: Phillip Stockton and Eugene Gearty, "Hugo"
Best Sound Mixing: Tom Fleischman and John Midgley, "Hugo"
Best Documentary: "Undefeated"
Best Animated Feature: "Rango"
Best Visual Effects: "Hugo"
Best Original Score: Ludovic Bource, "The Artist"
Best Original Song: Bret McKenzie, "Man or Muppet"
Best Live Action Short: "The Shore"
Best Documentary Short: "Saving Face"
Best Animated Short: "The Fantastic Flying Books Of Mr. Morris Lessmore"

Official Movie Trailers

Below are the official movie trailers for the big winners at the 84th Academy Awards:

 

  

 

 

 

 

Slideshow: Highlights from the 84th annual Academy Awards

Click Image To View 84th Academy Awards Interactive Slideshow

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As predicted, "The Artist" won Best Picture at this year's Oscars.

COMMENTARY:   Looks like the social media movie fans got most of their Academy Award predictions wrong.  The only correct winning predictions were  "The Artist" for Best Picture and Meryl Streep for Best Actress.  The members of the Academy of Motion Pictures who actually voted for Best Picture, Best Actor and Actress, and Best Supporting Actor obviously had a mix of opinions.  

I did predict that "Hugo" would win five Oscars.  But, "The Artist" was a total surprise to me even though the social networks predicted it would win Best Picture.   I didn't see the movie, so I can't judge its merits, but the members of the Academy must've thought very highly of the film.  The official movie trailer was very entertaining.  The fact that it was a silent film apparently did not play any bearing on their voting decision.    

I was very disappointed in the performance of Academy Awards host Billy Crystal.  He wasn't funny.  His jokes missed the mark.  He was quite boring if you ask me.  He was not "marvelous."  I did love the performance by Cirque du Soleil very much.   Christopher Plummer, at 82 years of age, finally won an Oscar!!  Just love his body of work and surprised he had not won an Oscar before.   

When they ran the pictures and videos of  filmmakers, editors, music composers, entertainers, actors and actresses who past away last year, they included Steve Jobs.  Why?  The studios and networks never trusted him, and I doubt they trust new Apple CEO Tim Cook much either.  They think that Apple will try to do what it did to music.  

Overall, 84th Academy Awards lacked any excitement so I give it a C+.    

Courtesy of an article dated February 24, 2012 appearing in BusinessInsider, an article dated February 26, 2012 appearing in Moviefone.com, Flowtown and YouTube

ComSCORE: SOCIAL UNIVERSE STILL QUICKLY EXPANDING

Social platforms are still in their Precambrian era, with new services emerging and consolidating large audiences almost faster than they can be tracked. Meanwhile the social category as a whole is on the cusp of becoming the dominant form of online content, accounting for 16.6 percent of Internet minutes spent as 2011 drew to a close

 

A wide-ranging report from comScore found that while No 1 Facebook continues its impressive growth - reaching three out of four U.S. users - relative newcomers like Tumblr, Pinterest, and Google+ are evolving and growing at a steady clip.

• Twitter held the no. 2 spot in the category as of December, when it drew 37.5 million unique visitors. Throughout 2011, it had vied with LinkedIn for second position in social.
• LinkedIn's was no 3 as of December, when its audience hit 33.5 million unique visitors, but Twitter was solidly ahead, putting some distance between LinkedIn.

And then you have the upstarts. In six short months, Google+ reached 20.7 million U.S. visitors in December (it claims more than 90 million accounts), while Tumblr hit 18.8 million. Perhaps most impressive of all is Pinterest, which has drawn 8 million visitors - many of them female - without the promotional power of Google's network of products. The site had barely shown up as a blip on comScore's screen last summer.

ComScore expects social activity to overtake portals as the most engaging online activity in 2012.

Facebook, as everyone knows, is the category leader, but its audience size only tells half the story. comScore said.

"The more significant growth trend…was in average user engagement, which jumped 32 percent in the past year to just over 7 hours per visitor in December." 

The "2012 U.S. Digital Future in Focus" report also touched on trends in digital display ads, video, search and other areas. A few of the juicier bits:

Dramatic Rise in Video Activity

The U.S. online video audience cracked 100 million in December, 43 percent higher than one year ago. The number of video streams grew as fast, rising 44 percent to 43.5 billion in December.

 

YouTube commands half of this burgeoning market, and many of its content channels displayed significant user loyalty. That bodes well for its big investment in premium channels.

Meanwhile, the volume of in-stream video ads grew 20 percent to 7.1 billion in December 2011.

Google Becomes a Top Advertiser

Many familiar brands graced comScore's roll call of biggest online advertisers. AT&T continued to hold the top spot, delivering 105.8 billion impressions last year. Verizon was also huge, as were brokerage Scottrade and its parent Experian Interactive.

New on the list was Google, which delivered in excess of 40.4 billion display impressions for its own products, including Chrome, Offers, and Google+.

The year also saw more brands deliver a billion or more impressions. ComScore says 145 did so in Q4, a rise of 38 percent compared with the year-ago period. The number of advertisers delivering 3 billion or more impressions also grew - from 26 to 46.

Bing Makes Gains

Bing finally surpassed Yahoo's search market share, claiming the no. 2 spot among search engines. Its market share is now about 15 percent, and it powers about the same percentage for Yahoo.

E-Commerce Blooms

The year saw a big, and by now well documented, bump in e-commerce spending. U.S. travel and retail online spending rose 12 percent to $256 billion. In the fourth quarter alone, retail e-commerce spending reached $50 billion.

 

Webmail, IM Decline

As social gained popularity, other categories lost. Instant messaging fell 40 percent year over year; online personals dropped 40 percent; and job search sites declined 21 percent, says comScore.

Web-based email also suffered notable declines among certain age groups. Its use was down 31 percent among teens age 12 to 17, and down 34 percent among 18- to 24-year-olds.

Stated the report.

"While the significant decline among teens represents a continuation of a similar trend observed last year, that 18-24-year-olds are now moving away from webmail suggests a larger and more permanent shift in email usage may be occurring." 

COMMENTARY:    Google+ hit 100 million users on February 1, 2012, but it has a lot of work to do in order to increase site stickiness.  The has been in existence for only about nine months, and is still experimental, so it has a lot of upside as Goole gathers data to make improvements to increase engagement and stickiness.   I think by the end of 2012, you will start seeing a huge uptick in minutes online. 

 Courtesy of an article dated February 9, 2012 appearing in ClickZ

THE HR GIGER "ALIEN" BAR OF THE HR GIGER MUSEUM IN SWITZERLAND REMINDS YOU OF THE MOVIE SET OF THE SCI-FI THRILLER "ALIEN"

The Alien monster from the sci-fi movie thriller "Alien" (Click Image To Enlarge)

Can you imagine stepping inside this bar? Bar? Yes, it is just a bar called “HR Giger Bar“, found at the HR Giger Museum in Gruyères, Switzerland. HR Giger Bar is a cavernous,skeletal structure covered by double arches of vertebrae that crisscross the vaulted ceiling of an ancient castle. The sensation of being in this extraordinary setting recalls the tale of Jonah and the whale, lending the feel of being literally in the belly of a fossilized, prehistoric beast, or that you have been transported into the remains of a mutated future civilization. This is a really impressive design and I bet you will have a unforgettable drinking experience inside.

COMMENTARY:   I have been to Hollywood theme-style restaurants, but I have never seen anything like the HR Giger Restaurant and Bar which is right out of the movie set for the sci-fi move thriller "Alien."   Check out the video:

  

Amazing alien restaurant bar designed by H.R. Giger and if you don't know who Giger is then I shall tell you. He was involved in the design of the aliens in Alien the movie you know the alien tearing out of the stomach and the face huggers and the most dangerous alien acid blood burns any material. Anyway this bar is like the inside of the alien mother ship:-)   They even have piped in music with the sounds of the Alien monster.  

That's what I call one cool place worth checking if you are ever in Switzerland.

BTW, the 1979 movie "Alien" is one of my all-time favorites.  I remember when the movie first came out.  It scared the shit out of everybody in the audience and became an instant hit  The movie made Sigourney Weaver a household name, and began the Alien movie series.  Here's the original trailer, because I knew you would want to see it.   I know my fans very well.  Enjoy

 

Here's my favorite scene from the movie "Alien."    I knew you would like to see it, too.  Enjoy.

 

Courtesy of an article dated November 25, 2011 appearing in Design Swan

REDBOX PARTNERS WITH VERIZON TO LAUNCH STREAMING VIDEO SERVICE, WILL TAKE ON NETFLIX, HULU AND AMAZON

The Coinstar subsidiary announces plans to partner with Verizon to compete with streaming video giants Netflix, Amazon, and Hulu.

Coinstar subsidiary Redbox today announced a new partnership with Verizon for the launch of a streaming video service.

The joint venture will launch in second half of 2012 and be a subscription-based and "affordable service that will allow all consumers across the U.S. to enjoy the new and popular entertainment they want, whenever they choose, using the media and devices they prefer," the companies said in a statement.

With the new service, Coinstar better positions its primary business for the digital age. Redbox's kiosks, generally located at grocery or retail stores such as Walmart, offer customers dollar-a-day DVD or video game rentals. With the addition of a streaming service and its new-fledged partnership with Verizon, Redbox now further complicates a crowded field of digital streaming juggernauts that include Netflix, Amazon, and Hulu.

Bob Mudge, president of Verizon consumer and mass business markets, said in a statement.

"When you consider the core elements the parties bring to this venture--our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence ... it's clear that Verizon and Redbox are a powerful entertainment team." 

Coinstar CEO Paul Davis said.

"Our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment.  This alliance is the result of a deliberate and strategic process to identify a partner who shares our commitment to delivering innovative solutions to consumers."

Details of the partnership are still sparse. The companies only indicated they plan to introduce a "product portfolio" and will offer "subscription services." It's unclear what these services are; how or whether they will be bundled with Redbox's kiosk business or Verizon's VOD services; what content these services might provide; or how much it'll cost.

But the companies did say they intend to go after the business from both physical and digital worlds, offering consumers in the U.S. access to content online and on mobile devices--similar to Netflix--and illustrating so in the below infographic released online. The partnership will be a limited liability company with Verizon holding a 65% ownership share and Redbox holding a 35% ownership share.

Click Image To Enlarge

In a conference call held this morning, Coinstar's Paul Davis and Verizon's Bob Mudge provided little if any more detail about the new partnership. Mudge referred to it as a "single-source" service that will combine the convenience of DVDs-by-kiosk with on-demand streaming. Davis stressed Verizon's strong relationship with top entertainment providers, and highlighted Verizon's extensive IP network infrastructure and customer base of 30 million active rental customers and 109 million wireless customer connections. He said the partnership represented "the best of both worlds" of physical and digital offerings.

Added Mudge,

"At this point, due to competitive concerns, we're limiting our description to 'subscription services and more.'"  

The announcement comes at an opportune time for Redbox, which has long been expected to introduce a streaming service to complement its DVD business. After Netflix hiked prices by roughly 60%, consumer sentiment for the popular brand fell to all-time lows, and caused an exodus of hundreds of thousands of subscribers. Paul Davis has said the company's business has benefited from Netflix's hiccup, gaining new customers from its "disenfranchised" members. Last quarter, Redbox pulled in $390 million, up 28%; Redbox generates about 84% of parent Coinstar's revenue.

But Netflix has begun to recover from its stumbles, adding 600,000 U.S. subscribers last quarter, and Redbox has said it will introduce a price hike of its own. The company has said rates will increase to $1.20 per night, to offset rising operation costs of its kiosk business--another suggestion that the long-term future of the rental business is likely online.

And while the company's kiosk business has been booming, it has a long way to go before it catches up to rivals in the digital space like Netflix, which boasts more than 20 million subscribers. Not only will it have to compete for content but accessibility. It's not so much Netflix's library of movies and TV shows that has made it a success but the service's availability on everything from video game consoles and smartphones and tablets.

That's why Coinstar's partnership with Verizon is so crucial to the Redbox's success in this area. With Verizon's network infrastructure and deep relationships with content providers and device makers, Verizon is likely to give Redbox a big leg up against competitors going forward. 

Coinstar will announce its Q4 earnings later today. We'll see how the markets react to this new Redbox-Verizon deal.

COMMENTARY:  

Coinstar FY 2011 Consolidated Revenues and Earnings

In an article dated January 6, 2012 appearing in Reuters, Coinstar, Inc., owner of redbox, announced that for fiscal 2011, it expects consolidated revenue of between $2.075-$2.250 billion, adjusted EBITDA from continuing operations between $425-$460 million and GAAP EPS from continuing operations between $3.80-$4.30.

Click Image To Enlarge

Coinstar Q1 2012 Consolidated Revenues and Earnings

For the first quarter of 2012, it expects consolidated revenue between $530-$555 million, adjusted EBITDA from continuing operations between $94-$104 million and GAAP EPS from continuing operations between $0.76-$0.91.

According to I/B/E/S Estimates, analysts are expecting the Company to report EPS of $3.86, EBITDA of $409 million on revenues of $2.170 billion for fiscal 2012; EPS of $0.86, EBITDA of $94 million on revenues of $515 million for the first quarter of 2012. 

Redbox No 1 In DVD Movie Rentals

According to market research firm NPD Group  (via Deadline), Between 2010 and 2011, Redbox's percentage of the physical-disc rental market increased from 25% to 37%.

Click Image To Enlarge

Meanwhile, Netflix's share stayed flat, despite the Qwikster debacle and Reed Hastings' statement that DVD-by-mail subscribers will decrease steadily from here on out. Brick-and-mortar stores like Blockbuster lost 7%. And video on demand continues to increase in popularity, now accounting for 31% of all rentals.

Redbox -- A Look At The Numbers (As of June 30, 2011)

Click Image To Enlarge

Redbox Acquires NCR Entertainment Assets

In an article dated February 6, 2012 appearing in Reuters it was announced that Coinstar, Inc.'s Redbox Automated Retail had agreed to purchase assets of NCR Corporation's entertainment line of business. The acquisition includes the purchase of the DVD kiosks, certain retailer contracts, and DVD inventory from NCR's entertainment line of business. In connection with the asset purchase, Coinstar and NCR also will enter into a strategic supplier arrangement where Coinstar will purchase product and services from NCR. Redbox will pay up to $100 million for the assets. Through the manufacturing and services agreement, Coinstar will procure from NCR hardware, software and services that will yield $25 million in margin for NCR over five years. The transaction is subject to regulatory approval and is expected to close in the third quarter of 2012. Terms of the transaction were not disclosed. 

Netflix Financials 

Click Image To Enlarge

Redbox has a long ways to go to match the streaming capabilities of Netflix, HULU and Amazon, but it sees the day when DVD movie rentals go the way that newspapers and hardcover books have gone digital.  Movies are all online now, and Netflix is the market leader, in spite of losing an estimated 600,000 subscribers when it raised its prices in mid-2011.   Its new partnership with Verizon gives it access to 130 million Verizon subscribers, many of who stream video, television and movies online on their home computers and mobile devices.  This definitely appears to be a marriage made in heaven and will be worth tracking to see how it all pans out.  

Courtesy of an article dated February 6, 2012 appearing in Fast Company and an article dated January 30, 2012 appearing in Business Insider

 

 

WHY EASTMAN KODAK LOST ITS LEAD IN FILM AND FAILED TO PIVOT TO DIGITAL CONTENT AND THE COMPANY IS NOW IN BANKRUPTCY

 

We all had them: times you reached for a camera to stop life for a second, to grab a memory. For decades, Kodak was the rock solid standard in photography and as the 131-year old company files for Chapter 11 bankruptcy, “Kodak moments” may be all that’s left of what was once one of the most powerful companies in the world. Kodak can’t compete let alone survive in this new world. The only thing keeping them alive is a trove of 11,000 patents, and even those don’t seem to be piquing anyone’s interest.

A Kodak Moment: a rare, one-time moment that is captured by a picture, or should have been captured by a picture

Click.

From household name to also-ran in a few years. This isn’t a story of a stubborn buggy-whip manufacturer going out of business for refusing to change. This is a carriage maker making a seemingly successful transition to the automobile and then, just as quickly, failing catastrophically.

So what happened?

Click.

A Digital Decline

Digital photography took off and Kodak wasn’t ready for it. From the late 90s until about 2008 (which is also when camera phones became mainstream), the digital still camera market in the U.S. grew from 4.5 million units shipped in 2000 to 28.3 million units in 2007, according to PMA.

What’s interesting is that Kodak actually invented the first digital camera in 1975, but it was Sony who first introduced a digital camera to the people in the form of the Sony Mavica in 1981. Kodak, on the other hand, focused its digital technology on high-end, niche markets. They came to bat with a hybrid approach of sorts — offering sensors to other companies rather than building their own consumer products (Leica used their sensors for years and don’t even ask how that turned out) — because many of them couldn’t imagine a world in which selling one digital camera to a few power users would be more profitable than selling one-time-use film cameras to the masses… over and over again. A classic case of a disruptive technology coming in right under the incumbent’s nose.

Under CEO George Fisher, Kodak had been planning its digital strategy for most of the 90s. The problem was that the estimates for growth in the digital imaging sector were rather low anywhere outside of Japan during the late 90s. According to a study out of the University of Michigan business school, “the total volume of digital cameras sold outside Japan in 1997 was estimated to be only 400,000 units,” and many of them were believed to be for power users, not the general public.

Plus, Kodak’s presence in Japan was weak, at best, with Fuji absolutely dominating the Japanese film and camera market during the 90s.

That left Kodak leadership with a big decision. Should Kodak make a huge push into digital and risk cannibalizing its still-strong core business? That was the question, and the answers varied.

Here are two quotes from Kodak corporate literature from the UM study:

The keys to Eastman’s success in making photography a popular leisure-time activity for the masses were his development of roll film and the inexpensive box camera. Although film and cameras are far more sophisticated and versatile today, the fundamental principles behind his inventions have not changed.

Four years ago, when we talked about the possibilities of digital photography, people laughed. Today, the high-tech world is stampeding to get a piece of the action, calling digital imaging perhaps the greatest growth opportunity in the computer world. And, it may be.

Obviously, there was not a consensus and why would there be? Fuji dominated in Japan, and right at the moment that Kodak should have been pushing hard into the digital realm, estimates for anywhere outside of Japan remained low.

Clearly those estimates were wrong and Kodak was inevitably late to the game. Their first digital imaging offering was not a camera, but what they were calling the “Photo CD” in 1991. In 1996, Kodak made another small push with its pocket-sized DC20. At the time, digital was in its infancy and Kodak failed to see the possibilities, instead focusing on other digital products like scanners. In fact, Reuters reports that Kodak spent $5 billion on digital imaging research in 1993, only to delegate it to 23 separate scanner projects.

Five years after the DC20, however, Kodak made its biggest push into digital cameras with its EasyShare line. Dan Carp had taken control of the company and knew to a degree that if they didn’t at least try in digital, it would be a mistake. But by 2001, the market was crowded. Canon and Sony had already made huge leaps in the sector, and Kodak had some major ground to cover.

Fear of change is understandable, to an extent, but it’s also the kind of backwards, old-fashioned thinking we’re seeing today out of the RIM playbook (pun intended).

A big part of the issue there was talent. The same employees that may be geniuses in film and film cameras aren’t necessarily as advanced in electronics. This, of course, did nothing for company solidarity as Kodak’s digital and film branches were at odds. Kodak had plenty of great people and great photographers, but they couldn’t keep them on the payroll as other major players dropped into the digital game after 2000.

The company spread itself too thin in the mid-90s and on into the next millennium, spending millions on research only to release incrementally updated products in a number of different fields. Already behind, this only made matters worse.

Then in 2007, the company made a huge mistake in selling off its health imaging business for $2.35 billion, which was meant to go toward its consumer camera business. Unfortunately, health imaging had been good to Kodak and the firm sold off the business just in time to miss out on baby boomer retirement. Reuters recounts that Kodak didn’t want to spend the money required to migrate the health industry from analog to digital.

By 2008, the digital camera market was already starting its decline. A new technology had emerged: 120 million camera phones were in use in 2008, just in the U.S. alone, according to PMA. Also in the U.S., 2008 brought about the first drop in digital still camera sales, down from 28.3 million in 2007 to 27.7 million. The sector would experience a slow but steady decline from then on.

 

But what slowed Kodak down so much between the 90′s and now?

Already Broken

To start, the retail landscape here in the U.S. changed dramatically over the 80s and 90s. Walmart, for one, saw a huge growth spurt in the 80s and opened its first superstore in 1988. And while Kodak was happy to be sold in big box chains, others were just as pleased to put their products in stores like Walmart.

You see, in the 70s and 80s, every little town had a tiny film store. Kodak owned the market wholesale, with between 80 and 90 percent share. Then Walmart, along with Sears, Costco, and other big box retailers, swallowed these little mom and pop stores up. Retailers learned that diversity, scrambled marketing, and one-stop shopping were important to consumers, and the only way to keep costs low was to squeeze the manufacturers into providing high-quality products at lower prices.

That’s where Fuji comes into play, and it seemed as though Kodak never saw it coming.

Kodak held between 7 and 10 percent of the Japanese market in the mid-90s, while Fuji had a dominant position. In fact, each of the companies held a rather dominant market share on their home turf, with Fuji representing 17 percent of the U.S. market. But distribution channels in the two countries were very different. While Kodak and Fuji were selling their products directly to retailers here in the States, distributors played middle-man over in Japan. Fuji, not surprisingly, had strong ties with the four major distributors in Japan, and Kodak… well, they didn’t like it.

In 1995, Kodak filed with the United States Trade Representative (USTR) for an investigation under Section 301 over whether or not the Japanese government had allowed anti-competitive practices. After two and a half years of litigation, the World Trade Organization in Geneva issued a “sweeping rejection of Kodak’s complaints” regarding Japan’s film market.

By dominating their own market and steadily making inroads in the U.S., Fuji had quite a bit of cash lying around to buy itself into new markets. And that’s exactly what it did. According to a case study [PDF] out of Pace University, “while the U.S. based Eastman Kodak Company was sleeping, the Japanese firm Fuji Photo Film opened its first film-production plant in the U.S., cut prices, marketed aggressively and stole valuable market share.”

This was between 1996 and 1997, when Kodak still held approximately 80 percent of the U.S. market and was focused primarily on roll film and film cameras. But Fuji was now prepared to duke it out in price wars, and though both companies denied actively engaging in such a thing, Kodak fired back hard each time Fuji cut prices. But it was too little, too late. In the years leading up to this, Kodak refused to cut prices for fear of profit erosion.

In 1996, however, Kodak signed an exclusive agreement with Costco that left Fuji with 2.5 million rolls of excess film. To avoid expiration, the company offered a 10 to 15 percent price cut. Kodak resisted engaging, and rightfully so (perhaps), as Salomon Smith Barney analyst Jonathan Rosenzweig figured that “for every 1 percent cut in Kodak film prices, a 1 percent drop in earnings per share results.”

Meanwhile, the American consumer was changing. While people still felt pride when they were “buying American,” imports became more and more attractive. A few years later, in January of 1999, the United States would record its single largest trade deficit month to date at $17 billion. To put it bluntly imports outweighed exports, and Fuji with its low-priced film fit into the U.S. market swimmingly.

By 1998, however, the competition between Fuji and Kodak seemed to slow down. Most of the price wars happened in the form of promotional deals rather than every day prices, but something even more fatal than Fuji was creeping up on Kodak: the digital revolution.

The Only Hope

Kodak’s market share had already been eroded by Fuji, but the company, over a century old, had too much pride to change. When all is said and done, pride and nostalgia brought Kodak to its knees. But today there is (or was, rather) one saving grace.

Kodak holds 11,000 patents which analysts value around $1 billion. Since Kodak invented the first digital camera, and research was one of the four pillars of Kodak’s business strategy, it only makes sense that where digital imaging is concerned they own the technology.

But it’s too late to act like the technology in those patents is groundbreaking. It’s everywhere, and thus Kodak is suing everyone: RIM, Apple, HTC, Fujifilm, and Samsung. The company knows that its patents are its only solid source of revenue, whether it’s by selling them or licensing them.

Unfortunately, litigation takes years, and no one seems all that interested in buying Kodak’s patents. Which brings us to today.

After filing for Chapter 11 bankruptcy on January 19, 2012, Bloomberg is reporting that the company intends to shift its business toward printers and its ink. Selling off its camera unit and perhaps its patents should allow for more cash which can be invested in further patent litigation and licensing.

But this is a far cry from the Kodak of yesteryear. Once dominant, the 131-year old company is now fighting for survival and without a massive leap forward in terms of innovation, this may be the end.

There will still be kodak moments, but there may no longer be a Kodak.

COMMENTARY:    In a blog post dated October 3, 2011, I commented on Kodak's hiring of Jones Day, a noted law firm specializing in bankruptcies.  This began a series of rumors that Kodak was about to file for bankruptcy.  In a blog post dated January 4, 2012, Kodak announced that it might sell its valuable patents and borrow $119 million from a credit line to have sufficient cash.   On January 19, 2012, The Wall Street Journal reported that Kodak had officially filed for bankruptcy.  It is so unfortunate that Kodak was so reluctuctant to market digital cameras early on when it became obvious that there was a full-blow digital lifestyle emerging.  Had it done so, it would've had first-mover advantages and with its recognized brand name dominated the digital camera market.  This should serve as a signal to all entrepreneurs and business owners. Always be ready to make a pivot.  It's always best to enter an emerging market early, rather than too late.    

Courtesy of an article dated January 21, 2012 appearing in TechCrunch 

 

 

 

 

 

KODAK BANKRUPTCY IS EMINENT, SELLING PATENTS TO RAISE CASH, BORROWED $119 MILLION FROM ITS BANK, BUT IT COULD BE TOO LATE

"Don't forget to turn the lights off on your way out."

Investors dumped Eastman Kodak's stock Friday amid fears that the photography pioneer is headed toward bankruptcy.

The Wall Street Journal rattled Kodak's already jittery shareholders with a report that the company has hired Jones Day, a law firm that dispenses advice on bankruptcies and other restructuring alternatives.

Kodak, which is based in Rochester, N.Y., didn't respond to a request for comment. A Jones Day partner who oversees the firm's business reorganization and restructuring practice didn't immediately return a message either.

Kodak spokesman Gerard Meuchner told the Journal. 

"As we sit here today, the company has no intention of filing for bankruptcy."  

Kodak CEO Antonio Perez also sought to defuse the bankruptcy speculation in a meeting held earlier this week with the company's 19,000 employees, according to the Journal.

Click Image To Enlarge

Friday's news followed a Kodak disclosure earlier this week that the company was borrowing $160 million from its revolving credit line. That convinced some investors that Kodak is running out of cash as it scrambles to adapt to the age of digital imagery.

Click Image To Enlarge

Eastman Kodak shares lost more than half their value Friday, December 30, plunging 91 cents to close at 78 cents per share.  Kodak stock hit a new low of 47 cents on Wednesday, January 4, down an additinoal 31 cents.  The selling was so intense that the shares temporarily stopped trading under the New York Stock Exchange's automated controls.

After 131 years in business, Kodak finds itself on shaky ground largely because of the shift to digital cameras. That change, coupled with tougher foreign competition, has undercut sales of the film that made Kodak famous.

Click Image To Enlarge

To survive, the company has been mining its patent portfolio for additional cash. Since 2008, Kodak has pocketed nearly $2 billion in royalties and licensing fees. In July, Kodak hired investment bankers Lazard Ltd. to sell about 1,100 digital-imaging patents.

The question now is whether those measures will be enough to keep Kodak afloat. The company had $957 million in cash as of June 30, down from $1.6 billion at the start of the year.

Kodak warned in a securities filing in November that it could run out of cash within a year unless it can sell its digital-imaging patents or raise money selling its debt to the public.

The cautionary statement came as Kodak reported a third-quarter loss of $222 million, bigger than a year earlier, and said its cash reserves fell almost 10% over the year.

Three members of Kodak's board of directors have resigned in the past two weeks.

The latest to relinquish her post was economist Laura Tyson, a member of the Clinton administration and a former dean of the Walter A. Haas School of Business at theUniversity of California, Berkeley.

COMMENTARY:  In a blog post dated October 3, 2011, I reported that Kodak had hired bankruptcy firm Jones Day.  I also reviewed their financials and pointed out that selling their patents would not be enough to help Kodak much, and this has turned out to be the case. Once you start selling your "crown jewels," those valuable patents, you are dead.   I also said they should reduce their expenses, especially payroll and selling.   If Kodak has 19,000 employees right now, I have to ask the question, why?   What the hell was CEO Antonio Perez doing for three months?  

As much as I hate to say it, it's probably too late to save Kodak.  A bankruptcy would only delay the inevitable.  Where is the bankruptcy plan?  The company has over 2 billion in longterm debt (including the shorterm portion), and I am sure that's secured in some way.  If you are a stockholder, you can kiss everything goodbye.   

Courtesy of an article dated January 4, 2011 appearing in The Wall Street Journal

MICROSOFT CALLS ITS NEW XBOX LIVE ONLINE SERVICE COMBINED WITH XBOX 360 + KINECT THE "FUTURE OF TELEVISION," AND IT JUST MIGHT BE

Click Xbox Live logo to learn more

Xbox Live isn’t just an online gaming service anymore. Microsoft is announcing today that the new version of its Xbox Live user interface will help transform entertainment on the television. The upgrade goes live on Tuesday.

Calling it the future of TV, Microsoft is unveiling a new user interface for the Xbox 360′s dashboard; it is also unveiling dozens of new options for watching movies and TV on the console. Microsoft has also improved the quality of using Kinect voice commands to move from one choice to another, or to search through all of the entertainment options at your disposal in an instant.

 
Original Announcement of Xbox 360 and Xbox Live in Seattle on September 5, 2011

The update is one of the biggest in the past five years for the Xbox 360 because Microsoft is trying to improve the experience of watching entertainment. It also includes cloud-based access and storage for gamers to improve the basic gaming experience.

Ross Honey, general manager of Xbox Live entertainment and advertising, in an interview SAID. 

“We think you’re going to use one device for movies, music and games in the future.  We want to make the content accessible and enhance the actual experience. We think you will want to watch it on Xbox as it is more social and more personal.”

 

The update will be live on Tuesday for Xbox Live users, and it will greatly multiply the entertainment options that people have in their homes, providing access to on-demand TV, movies and user-generated videos. You can, for instance, get access to 26 TV channels from Verizon’s FiOS TV services, or the complete library of 10,000 On Demand movies from Comcast. You can download the new update in a matter of minutes.Honey said.

“A lot of people have said they’re going to reinvent television.  I’m going to say it as well.”

Microsoft Xbox 360 Setup includes: Kinect (left), Xbox 360 Console (center) and the Xbox 360 Game controller

When you say “Xbox,” the Microsoft Kinect motion-sensor and voice communication system springs to life. Then you can say “Bing” to activate the Bing search function across the entire console and ask it to find anything related to the word “X-Men.” Bing will show you X-Men movie, TV or game selections. Then you can choose an option, such as Zune or Netflix, to view the selection. The Kinect system generally works better than it did with voice controls last year.

The new visual user interface is borrowed from Metro, the square tiles and buttons from Microsoft’s user interface for Windows Phone 7 devices. The Windows 8 operating system arriving next year features the Metro interface in smartphones, tablets and PCs. The point is that you will be able to use the interface to get to the entertainment you want more quickly. And you won’t have to relearn different interfaces to access lots of content.

 

You can use your voice to find the games, movies, TV shows and music. The results come back and then you can choose the service that can best deliver the entertainment to you at the lowest cost. Bing search on Xbox with voice commands will be available at first in English in the U.S., Canada, and the United Kingdom. Text search works if you don’t have Kinect. Microsoft has sold more than 57 million Xbox 360s and it has more than 35 million Xbox Live members.

You can also use your Windows Phone 7 smartphone to cruise for shows, select the one you want to watch, and then see the movie appear on your screen as your Xbox 360 fetches the movie from the cloud and streams it to your TV set. All you have to do is get the Xbox Companion app for Windows Phone.

That leads us to one of the cool things about the Xbox Live update. Now you will be able to log into your gamertag identity on any Xbox 360. You can then play your saved games or watch your in-progress movies on any Xbox 360, thanks to cloud storage.

If you want to watch new release movies, you’ll have choices such as Zune, Epix, and others. Among the catalog of services available are Hulu Plus, Last.fm, Netflix, Zune music and video and ESPN. TV providers include AT&T U-verse TV in the U.S., Telus in Canada, BSkyB in the U.K., CANAL+ in France, Vodafone Portugal, VimpelCom in Russia, and Foxtel in Australia.

Microsoft has made a lot of progress on its original vision of turning the Xbox 360 into a gateway for all living room entertainment. The console was introduced as a game machine in 2005 with the cool Xbox Live online gaming service. The next year, Microsoft added the ability to download high-definition movies on demand to the console. In 2008, Microsoft added interactive TV services with BSkyB and Canal Plus. In 2009, the company added “the New Xbox Experience” with Netflix and other streaming movie services as well as social networks. Last year, it added Kinect voice controls for TV viewing, and this year, it added services such as Hulu Plus and enhanced ESPN. With the improved ESPN, which launched in August, you can see the status of friends and find out who they are expecting to win your favorite game.

On average, Xbox 360 users are watching 60 hours video entertainment per month, or two hours per day on the console. Now Xbox Live is adding 40 new entertainment platforms on a global basis.

Microsoft is rolling out the services slowly to make sure they work right. The new apps debuting on Dec. 6 are Epix in the U.S.; ESPN on Xbox Live in the U.S.; Hulu in Japan; Hulu Plus in the U.S.; Lovefilm in the United Kingdom; Premium Play by Mediaset in Italy; Netflix in the U.S.; Sky Go in Germany; and Telefónica España Movistar Imagenio in Spain.

Later in December, you’ll be able to use Xbox Live to watch 4 on Demand (C4) in the U.K.; ABC iView (Australian Broadcasting Corp.); AlloCiné. France (AlloCiné); Germany (Filmstarts); Spain (Sensacine); United Kingdom (Screenrush); Astral Media’s Disney XD (Astral Media) in Canada; Blinkbox in the U.K.; Crackle (Sony Pictures) in  Australia, Canada, U.K. and the U.S.; Dailymotion in 32 countries; Demand 5 (Five) in the U.K.; iHeartRadio (Clear Channel) in the U.S.; Mediathek/ZDF (ZDF) in Germany; MSN om Canada, France, Germany, Italy, Mexico, and the U.K.; MSNBC.com in the U.S.; MUZU.TV in Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, and the U.K.; Ninemsn in Australia; Real Sports (Maple Leaf Sports) in Canada; Rogers On Demand Online (Rogers Media) in Canada; SBS On Demand in Australia; TMZ (Warner Bros.) in Canada and the U.S.; Today (MSNBC) in the U.S.; TVE (RTVE.es) in Spain; UFC on Xbox LIVE (UFC) in the U.S. and Canada; Verizon FiOS TV in the U.S.; Vevo; and Vudu; and YouTube in 24 countries.

In early 2012, the new services include Antena 3 (Antena 3 de Televisión); BBC (BBC); CinemaNow (Best Buy); DIGI+ (CANAL+) in Spain; GolTV (Mediapro) in Spain; HBO GO (HBO); MLB.TV (MLB Advanced Media); Telenovelas/Sports (Televisa); and Xfinity on Demand (Comcast).

 COMMENTARY:    The Xbox 360 was released on 22nd November 2005 in Canada and United States. Following it was Europe and Japan. Other countries where Xbox 360 was launched are Hong Kong, Malaysia, Australia, India, Colombia, Russia, New Zealand, Singapore, Brazil and many more. Officially Xbox 360 was first made public on 12th May 2005, on MTV. In the later part of May, the game information and details about the launch was announced at Electronic Entertainment Expo. As per the details given by Microsoft, about 18 million units were sold by 22nd February 2008.

The Xbox 360 is the descendant to Xbox and was produced by Microsoft. It was build up in co-operation with ATI, SiS and IBM. Xbox 360 gives a strong competition to Wii and PlayStation 3. Xbox 360 Arcade, Xbox 360 Elite and Xbox 360 Premium are three customary variants in which Xbox 360 is offered.

The formats in which videos are supported by Xbox 360 are MPEG-4, .wmv-videos, .wmv-format, H.264 and WMV videos. The console supports audio playback, performs photos slideshows and display pictures. While using dashboard or playing games one can also enjoy listening to their favorite music. On Xbox 360, the backward compatibility is realized by software emulation or original Xbox.

The games which are emulated are delivered in 1080p, 1080i or 720p HD resolution along with anti-aliasing rather than 480p in a standard Xbox. Previously, Microsoft has affirmed that they aim at bringing more profiles of emulation so that the entire range of Xbox is playable on Xbox 360. Xbox Originals, a latest attribute in the dashboard update in 4th December 2007 allowed original download of Xbox games by the users to their Xbox 360. The games were original and seven games that were accessible from launch are Fusion Frenzy, Halo: Combat Evolved, The Wrath of Cortex, and Crimson Skies: High Road to Revenge etc.

Xbox LIVE is the online service for Xbox 360—and a whole lot more. Your TV is transformed into a connected entertainment experience with Xbox LIVE. Play Kinect™ and controller games with online friends wherever they are or instantly watch HD movies, TV shows and sports. Use Kinect to discover entertainment options that interest you—just say what you want to watch, and Xbox finds it.

With Xbox Live Marketplace, the Xbox Live users can download promotional or purchased content. It is a virtual market that offers game demos, game and movie trailers, gamertag images and Xbox Live Arcade games. With its hi-tech feature, Xbox 360 has captured a major portion of the market.

Xbox 360 + Kinect with user voice commands allows Microsoft leverage its huge built-in user base of 35 million Xbox Live members and 57 million Xbox 360 console owners.  Users can also use Microsoft's BING search engine, which doesn't hurt the No 2 search engine.  That's a lot of leverage because you know that Apple TV (rumored TV coming out) will allow users to do somethiing similar. You can bet on it.   Google TV is shamefully coming out with their new TV (being produced by Samsung).  This gives Sony Xbox 360 and Xbox Live lots of leverage and the full pallette of family entertainment from games, internet, video, films and TV programming.   They don't need to buy a new TV, they just hookup their Xbox 360 console with the new updates and you are off an running.  Sony finally did something right.    

Xbox Live also provides a social element to its new product offering--Xbox Social. Whether you're on your computer, your phone or your console, Xbox Social is your connection to the Xbox LIVE community.

Once you are signed in you can:

• Send and receive messages
• Compare games with friends
• See which friends are online
• Receive web and mobile requests

Xbox Social is not Facebook by any stretch, but Microsoft needs to capitalized on its captured market of Xbox 360 owners and provide the ability to provide a complete social experience including sharing pictures and music files and an Xbox personal page . 

 Courtesy of an article December 4, 2011 appearing in VentureBeat

NETFLIX TO RAISE $200 MIL FROM NOTES CONVERTIBLE INTO NETFLIX STOCK AT $85.00, BUT STOCK HAS PLUNGED TO $69.00, WILL LOSE MONEY IN 2012

Five months ago, Netflix was a $300 stock.

Now it's a ~$69 stock.   Below is Netflix's stock chart since the start of 2011:

It's raising $400 million at its new, clobbered stock price to fund all its new content investments.

And... it's going to lose money next in 2012.

Yes, that's the latest news that Netflix tucked into the prospectus for the stock portion of its stock and convertible bond offerings:

"We expect that consolidated quarterly revenue will be relatively flat until we can achieve positive net subscriber additions. As a result of the relatively flat consolidated revenues and previously announced increased investment in our International segment, we expect to incur consolidated net losses for the year ending December 31, 2012." 

Previously, Netflix said it might lose money for the first few quarters of 2012. So this is a change.

For comparison, Netflix is projected to earn about $4.10 per share this year.

Will Netflix ever recover, or is it toast?

I'm optimistic, though this latest fund-raising and loss news is certainly an unwelcome surprise.

On a positive note, Netflix also says its subscriber cancellations in its hybrid streaming-and-DVD business are slowing, and gross additions for its streaming-only service are still strong...

Consistent with our Q4 guidance, our domestic streaming and DVD gross cancellations continued to steadily decline in October and the first half of November, while gross additions of new streaming subscribers remained strong. As a result, consistent with our prior guidance, we continue to expect our domestic streaming net additions to be about flat for November as a whole and strongly positive for December.

COMMENTARY:   Netflix's problems all began back on July 12, 2011, when it decided to eliminate its $9.99 monthly unlimited DVD-rental and streaming combination plan.  Instead, Netflix separated DVD and streaming services into two separate plans, each priced at $7.99.  A combo plan will still available, but at a new price of $15.98 per month, an increase of roughly 60%. 

Netflix also offered a a standalone DVD rental plan that let users check out two discs at a time for $11.99 per month.  The $7.99 DVD rental plan only let users check out one title at a time.  Netflix executives had no idea the uproar that the new pricing structure would create among its 24.6 million subscribers in the U.S.  

Immediately following the price increase, Netflix's customer service email box became flooded with incoming emails from angry customers complaining about the price increase.  This sparked a subscriber revolt and many of them cancelled their subscriptions, but it wasn't until later that Netflix realized the magnitude of the problem.

On July 13, 2011, Netflix's stock price peaked at $298.73.  Poor U.S. economic data and the sovereign debt problems in the Eurozone hit the stock market hard beginning in mid-July and the market did not begin a recovery until mid-August.  But, as you can see from the chart below, Netflix shares continued to their slide even after the DJIA and NASDAQ began to recover.

Click Image To Enlarge

On September 19, 2011, the Netflix CEO Reed Hastings said he was sorry for mishandling the price increase that caused customers to cancel the service in droves. But the apology was drowned out by a decision that angered subscribers all over again.  Netflix announced that it would split into two services -- the DVD by-mail rental service would be named Qwikster and Netflix would continue offering online streaming of TV shows and movies.  The split-up of the two services caused confusion in the marketplace and complicated what was a simple DVD rental business.  

By the end of September 2011, Netflix stock had dropped to $113. 27 per share, a decline of $185.46 or 62% of its market value since the July 13 peak. 

In its earnings call of October 24, 2011, Netflix announced its third quarter ending September 30, 2011 financial results.  Netflix reported that domestic revenues were $799 million, an increase of 44% over the same nine-month period the prior year.   The company also reported a domestic operating profit of $120 million and a profit margin of 15% for the year.  

Netflix also reported that it ended the third quarter 2011 with 21.4 million streaming subscriptions and 13.9 million DVD rental subscriptions.  It also reported that unique domestic subscribers declined to 23.8 million subscribers, and that the decline was due to a higher than expected level of cancellations and lower number of new subscriptions due to the negative press it had received. Netflix claimed it had 4.7 million new subscriber additions for the third quarter.

Netflix CEO Reed Hastings began the earnings call by saying,  

"What we've seen is a second wave of cancellations from the price increase.The first wave was in July upon announcement, and the second wave has been in September and October as people become more aware of the price increase and then either change the plan or cancel. And that wave has been declining very steadily over the past couple of weeks. And so we have substantially less weekly cancels now than we did just three to four weeks ago. So that's what gives us confidence that it's this wave passing through."   

On  October 25, 2011, Netflix shares plunged to $77.37 from $118.84 the day before, when it revealed that it ended September 2011 with 23.8 million U.S. subscribers--a drop of 800,000 from June 2011 and far worse than anything that the company had hinted at before.   Netflix also warned that it expected more defections in the coming months.

The results prompted a downgrade to "Neutral" from "Buy" from Citi Investment Research analyst Mark Mahaney, who also slashed his target price on the stock to $95 from $220. The analyst called the price increase and the abandoned plan to separate Netflix's DVD business two "major execution errors."  

Netflix's plans to raise an additional $200 million to fund its content production and acquisition activies via notes receivable convertifle into Netflix stock at $85.00, presents a real problem when its stock is currently trading at $69.00.  It also announced in its notes prospectus that it will lose money in 2012.        

 

Netflix could not have timed the sale of that $200 million in notes at a worse time, when its stock price has been downgraded by analysts, its shares have already plunged $229 or 57.5% since the July 13 high, and it is has forecasted losses in 2012.  Technology Crossover Ventures will be the lucky investor buying those notes, and have the right to nominate one person to the board of Netflix.  Netflix shares have dropped another 5 points since the announcement of those notes.  Are those guys having any second thoughts?  Makes you wonder just how low Netflix (NASDAQ:NFLX) will go before the hemorraging finally ends.

In summary, it's absolutely mindboggling how negatively a simple price change can do to your earnings and stock price in a little over four months.  One day you are the darling of Wall Street, and the very next you are being scoffed and shorted.  If you are a public company or small privately-owned company, think before you start increasing prices.        

Courtesy of an article dated November 22, 2011 appearing in Business Insider