WSJ writes about Jack C. Benun and Jazz, and how his recycled cameras have created problems for Kodak and Fuji.
To understand why the world’s two largest film companies want so badly to crush a tiny New Jersey discount-camera entrepreneur, take a trip to your local Wal-Mart.
At one of the giant retailer’s outlets outside of Boston, three young shoppers scan the single-use camera rack, eyeing the $4.94 Kodaks and $4.88 Fujis. Then, crouching in front of the bottom rack, they snap up a brand with a white box emblazoned with the name “Jazz.” The price: just $3.67.
What they don’t know is that the model underselling Kodak by 26% is, in fact, a Kodak — or was. It’s an old throwaway that has been cracked open, shipped to China, loaded with cheap film and patched together with electrical tape, a controversial part of a vast world-wide recycling network.
For Fuji and Kodak, the stakes are high. Disposable cameras, which enjoyed a brisk 25% average annual growth in the late 1990s and are up about 10% this year, remain a bright spot in the otherwise bleak traditional photography market. Today, disposable cameras account for 40% of world-wide film sales on a dollar basis, or around $2 billion annually, according to the U.S. Photo Marketing Association. Some 350 million of the cameras will be sold this year, around half of them in the U.S.
The reloaders, who reached peak sales of around $150 million a year in the late 1990s, have had an influence on pricing disproportionate to their size — mainly because of their presence at Wal-Mart, where they started selling for half the price of the name brands. Largely as a result, the big film companies have introduced their own discount lines, driving the average price of a single-use camera to $5.87 today from $8.82 in the beginning of 1999, according to NPDTechworld, a market researcher in Port Washington, N.Y.
In the late 1980s, most of the shells ended up in landfills — a fact that gave a politically incorrect ring to the name of one of Kodak’s early models, “The Fling.”
A few years later, in response to the environmental movement and to cut costs, Kodak established a recycling program. This ultimately created a vast market for the used cameras. Photo processors save them up and sell them for between 20 cents and 80 cents to middlemen or to the big film companies. Kodak and Fuji now buy large quantities of discards, salvage the usable internal parts, and grind down the plastic bodies to be remolded into new ones. Kodak says 76% of its cameras come back for recycling.
But salvage entrepreneurs quickly found another use for the discards. They skipped the grinding part and just slapped new film in the old cases — a much more cost-effective technique.
Reading the story has convinced me even more that we need to do something similar with PCs. We have to set up the value chain which takes old PCs, loads our Emergic Freedom software on to it, and makes them usable for computing’s next markets, across the digital divide.