Camera producers death spiral

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Pixel Perfect
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p.4 #1 · Camera producers death spiral

briantho wrote:

I think a $1000 camera is worth $1000. If I can get it cheaper, great, but it's still an experience worth $1000.

Well the value you place on something personally is of of no relevance to this argument of the profit margin on a camera, justifiable or not.

Dec 10, 2012 at 01:10 AM

anthonygh
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p.4 #2 · Camera producers death spiral

curious80 wrote:
anthonygh wrote:

Quality film kit is going up in price at the moment...so need to look at the whole market...must be a reason for that....that aside....does your 'upgrade' costs make sense? Better quality images??

We are not getting a new updated film released every year. People are using the same films as they were years ago. With digital, you get new cameras every few years and for better or worse when the new model is released the old model loses its value.

The films may have the same name but not the same formulation exactly....unless both Fuji and Ilford are telling fibs they are constantly improving their products.

Dec 10, 2012 at 01:50 AM

Jorgen Udvang
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p.4 #3 · Camera producers death spiral

anthonygh wrote:
curious80 wrote:
anthonygh wrote:

Quality film kit is going up in price at the moment...so need to look at the whole market...must be a reason for that....that aside....does your 'upgrade' costs make sense? Better quality images??

We are not getting a new updated film released every year. People are using the same films as they were years ago. With digital, you get new cameras every few years and for better or worse when the new model is released the old model loses its value.

The films may have the same name but not the same formulation exactly....unless both Fuji and Ilford are telling fibs they are constantly improving their products.

... and every time I load a new roll of film, the camera is automatically upgraded to the latest release of that technology

Dec 10, 2012 at 02:30 AM

Lee Saxon
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p.4 #4 · Camera producers death spiral

Exdsc wrote:
Personally I'm tired of Canikon monopoly, Sony's monopoly on sensors, Fuji's semi-competent cameras and M4/3 cash cow. In fact I'm tried of Japanese monopoly on camera making.

Agreed.

But Red proves that something can be done about it.

Sony used to get away with selling the 1080p F35 for $250k. Then the Red One's 4K for $17.5k showed the market what it really costs to build a digital cinema camera. The F35's replacement is only $80k. Still not a fair price, but can you even imagine what the F65 or Alexa would've cost if Red hadn't come along? I'd bet half a million at least.

Dec 10, 2012 at 06:01 AM

Lee Saxon
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p.4 #5 · Camera producers death spiral

briantho wrote:

I think a $1000 camera is worth $1000. If I can get it cheaper, great, but it's still an experience worth $1000.

Pixel Perfect wrote:
Well the value you place on something personally is of of no relevance to this argument of the profit margin on a camera, justifiable or not.

Totally agree. It is unethical to charge more than parts + labor + R&D + moderate profit margin, even if the market is happy to pay it. (see my previous post on the Sony F35, which no studio used to paying tens of millions in production costs PER FILM, had a problem paying $250k for, even though it probably cost Sony $1500 to make)

Edited on Dec 14, 2012 at 09:29 PM · View previous versions

Dec 10, 2012 at 06:05 AM

andyjaggy82
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p.4 #6 · Camera producers death spiral

Two23 wrote:
2. For a long time now I've been saying, "I'd rather have a $100 p&s camera and a ticket to Iceland than a $3,000 camera and a ticket to nowhere."
Kent in SD

I like that. Very sound logic, but of course some of us can afford both, unfortunately that's not me.

I've actually gotten really sick of the gear syndrome lately. We all fall victim at some point. Every new lens that comes out seem to be at least a grand and every new body at least double that. I was looking forward to a new 7D, then I realized it is probably going to cost at least 2,000 dollars...... I am now once again looking at picking up a used medium format system for literally pennies on the dollar of what it cost new, and learning to enjoy photography again, not photography gear.

Obviously that approach isn't popular, but that's good, it will keep all that fantastic gear dirt cheap for the foreseeable future.

Dec 12, 2012 at 05:12 PM

CW100
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p.4 #7 · Camera producers death spiral

andyjaggy82 wrote:
Two23 wrote:

I've actually gotten really sick of the gear syndrome lately. We all fall victim at some point. Every new lens that comes out seem to be at least a grand and every new body at least double that. I was looking forward to a new 7D, then I realized it is probably going to cost at least 2,000 dollars...... I am now once again looking at picking up a used medium format system for literally pennies on the dollar of what it cost new, and learning to enjoy photography again, not photography gear.

then you get sick of buying and developing film, scanning to digital, etc. and eventually upgrade.
the cycle always repeats

Dec 13, 2012 at 12:16 PM

carstenw
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p.4 #8 · Camera producers death spiral

Lee Saxon wrote:
Totally agree. It is unethical to charge more than parts + materials + R&D + moderate profit margin, even if the market is happy to pay it.

I don't think it is unethical, exactly, but I do agree with the basic sentiment. By the way, labour is missing in that equation, and parts and materials overlap somewhat, but whatever.

Dec 13, 2012 at 04:26 PM

Geoff D F
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p.4 #9 · Camera producers death spiral

There are many fallacies in these threads and in Thom Hogan's article about whether pricies are too high, too low or that there is oversupply.

Camera companies have such complex business models that involve risk in investment, r&d costs that may or may not be recouped, products lines that may or may not make a profit that it is impossible to infer from anecdotes about a the price path of a few products about whether prices are too high or too low.

Even taking the Gh2 as an example, it was built in factory that is a significant investment that ideally Panasonic would want a return on. Whether the camera was priced too high at launch or too low when discounted can only be judged by whether Panasonic got a good return on the invetsment in the factory, the R&D, etc over the whole product life.

Then there will be some products they introduce that don't earn a profit becuase they misjudged the market. If they have a product that is a hit and they manage to sustain high prices well above cost, including getting a very big return on investment and R&D, isn't it just part of a business model that allows them to take risks on other products that may fail and run at an overall loss?

Is someone gettin g a bargain by getting it at a 40 per cent reduced price compared to what it was a year ago? That question is in the eye of the beholder. Waiting a year for a discount may be worth it to some. For others it may not.

The only way to judge whether the camera market is suffering from oversupply or undersupply is whether the companies are making higher or lower profits than what they expected when they were making investment decisions.

If profits are "excessive" (and I don't like using that term) someone well get in the game and drive profits down. If profits are too low someone will go broke and exit. That is the market at work.

Dec 14, 2012 at 12:42 AM

Jon Guilbault
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p.4 #10 · Camera producers death spiral

Lee Saxon wrote:
It is unethical to charge more than parts + materials + R&D + moderate profit margin, even if the market is happy to pay it.

On face value, maybe.

In real life, no. If you don't maximize your profits, competitors who are more willing to screw customers will gain market share, attract investment dollars, and kill your company right along with your ethics.

This is something a lot of people don't understand. Every day there are lots of good companies that fail, not because they aren't profitable, but because their competitors are more profitable and the good guys get squeezed out of the market.

I work in the real estate development market. Competitors who build shitty housing can out-bid us on any given development parcel because their margins are higher. We have to be very smart to survive and, even if we're smart, our products will reach far fewer people because we can't grow as fast --because we pass along more value to our customers. In the grand scheme of things, we need ethical companies to succeed in the face of unethical competition --even if in the short term they have to maximize margins to do it.

The challenge is to continue to provide value to customers while maximizing profits so you don't get eaten by the companies that don't provide good value to customers. A fine line to walk...

Dec 14, 2012 at 01:40 AM

anthonygh
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p.4 #11 · Camera producers death spiral

andyjaggy82 wrote:
Two23 wrote:
2. For a long time now I've been saying, "I'd rather have a $100 p&s camera and a ticket to Iceland than a $3,000 camera and a ticket to nowhere."
Kent in SD

...... I am now once again looking at picking up a used medium format system for literally pennies on the dollar of what it cost new, and learning to enjoy photography again, not photography gear.

Go and wash your mouth out with soap!!

Dec 14, 2012 at 02:03 AM

Lee Saxon
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p.4 #12 · Camera producers death spiral

carstenw wrote:
Lee Saxon wrote:
Totally agree. It is unethical to charge more than parts + materials + R&D + moderate profit margin, even if the market is happy to pay it.

I don't think it is unethical, exactly, but I do agree with the basic sentiment. By the way, labour is missing in that equation, and parts and materials overlap somewhat, but whatever.

Haha, "parts and labor" I meant!

Dec 14, 2012 at 09:29 PM

andyjaggy82
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p.4 #13 · Camera producers death spiral

CW100 wrote:
andyjaggy82 wrote:
Two23 wrote:

I've actually gotten really sick of the gear syndrome lately. We all fall victim at some point. Every new lens that comes out seem to be at least a grand and every new body at least double that. I was looking forward to a new 7D, then I realized it is probably going to cost at least 2,000 dollars...... I am now once again looking at picking up a used medium format system for literally pennies on the dollar of what it cost new, and learning to enjoy photography again, not photography gear.

then you get sick of buying and developing film, scanning to digital, etc. and eventually upgrade.
the cycle always repeats

No, cause I will keep my digital gear. It takes good pictures now, I don't see why it wouldn't take good pictures in 5 years as well.

Developing film and scanning can be a pita, but I'm a pretty selective shooter anyway, I don't see myself shooting off more than a 2-3 rolls a month on average, especially if I keep my digital gear. It just gets the new gear lust out of my system for a lot cheaper than a new dlsr.

Dec 14, 2012 at 11:30 PM

rattymouse
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p.4 #14 · Camera producers death spiral

Geoff D F wrote:

The only way to judge whether the camera market is suffering from oversupply or undersupply is whether the companies are making higher or lower profits than what they expected when they were making investment decisions.

If profits are "excessive" (and I don't like using that term) someone well get in the game and drive profits down. If profits are too low someone will go broke and exit. That is the market at work.

I was bored the last night and re-read Fujifilm's annual corporate reports from 2012 all the way back to 2005. In ALL that time, their imaging solution division has lost money. Not one year was there a profit. So Fujifilm hasn't made a penny selling digital cameras in the last 7 years.

I would have read further back to see when they last reported a profit but could not read any further. My insomnia was cured.

Dec 15, 2012 at 02:10 PM

carstenw
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p.4 #15 · Camera producers death spiral

I am quite surprised that they didn't manage to make any profits with an overpriced hit like the X100 on their hands. Did the reports list a breakdown of where the money was lost?

Dec 15, 2012 at 04:27 PM

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