In January 2018, Kodak, the popular photography tech company, announced its debut into the cryptocurrency ecosystem. This announcement comes at a time when several major corporations and Wall Street players are recognizing the future potential of blockchain and gunning for their piece of the pie.
It comes as no surprise that the company has chosen to adopt the technology; Kodak has always adapted to fit the times. This became even more apparent in 2012, when, on the brink of bankruptcy, the company refocused its efforts on digital media despite having been a primarily hardware producer since the 19th century.
According to the company’s official announcement, its new cryptocurrency has been created with the aim of protecting the ownership rights of photographers. In a press statement, Jeff Clarke, CEO of Kodak, stated that Kodak has always aimed to democratize the photography industry and create a fairer system for licensing. Blockchain technology may give the industry an innovative way to achieve this.
The issue of fair licensing has been a pressing issue in photography for a long time. There have been multiple cases in which photographers have had their work used by other people without their permission. Although there are standards in place to ensure that this does not happen, they don’t always work.
This is because these standards focus more on what actions should be taken after the deed has been done, instead of how to prevent it. Using blockchain technology, Kodak hopes to address this issue and ensure that photographers always receive their dues as well as credit for their work. The company will offer an “encrypted digital ledger” to this end.
The main idea is that photographers will be able to register their work on Kodak’s blockchain and use the company’s digital asset known as “KODAKCoin” as a means of exchange. Whenever people want to use photographs owned by any of the registered photographers on the platform, they would have to pay for the rights, using the cryptocurrency. This will help to prevent the illegal use of photographers’ work, an issue that currently plagues the industry.
Kodak is the first major NYSE-listed corporation to create and implement a cryptocurrency. In conjunction with WENN Digital, Kodak announced that it would hold its Initial Coin Offering (ICO) on the 31st of January, 2018. KODAKCoin, its digital asset, was set to be offered in a crowdsale event, available to investors based in Canada, U.S, U.K and a few other countries. However, the company hit a roadblock when it had to verify its accredited investors, and as a result, the ICO was delayed until May 2018.
There were 8 million KODAKCoins available to the public in the company’s pre-ICO stage, and the amount of money they hoped to raise during the ICO was unclear. However, all 8 million tokens were purchased by Global Blockchain Technologies Corp, a Canadian company. This has made them the lead investors in Kodak’s blockchain service.
According to Shidan Gouran, the president of Global Blockchain, the KodakOne ICO is compelling and creates a way for the management and monetization of digital assets globally. Due to the market size, relevant stakeholders, and technology partnership, this ICO presents the potential for the creation of a large, active community.
After a second pre-ICO round, the company launched its ICO with the aim of raising $50 million. Kodak also confirmed that the Initial Coin Offering was issued according to the guidelines laid out by the SEC, as a security token under Regulation 506 (c) as an exempt offering. The aftermath of the ICO announcement was positive, with Kodak shares seeing almost a 100% increase. The share price which opened at $3.10, peaked to more than $5 before settling at a value of $4.30.
Following the ICO announcement, Kodak and WENN Digital, the company that facilitated its entrance into the cryptocurrency industry, announced that it will use Kodak’s platform to bridge the world of sports and its relationship with photography. Along with Oak View Group (OVG), Kodak launched its platform, known as KODAKOne in May 2018, to help photographers and sports fans share sports photographs in six select arenas.
Jan Denecke, CEO of WENN Digital stated that the company wants to introduce the KODAKOne platform to its target audience. This includes the creatives like photographers, artists, and fans with the most chance of benefiting from its functionality. These creative groups will also serve as early adopters of the platform, laying the groundwork for future adoption. According to Denecke, the focus of the project is to ensure that photographers are paid fairly and given the opportunity to be first contenders in a secure new economy, specially tailored for them.
The Oak View Group Arena Alliance consists of world-class venues with a combined reach of more than 65 million consumers annually across major American cities. This means that the sports photography market will get a boost on an open platform like KODAKOne, which collates all the photographs in a single place. Oak View Group also raised $100 million in a funding round in early 2018.
Sports photography is a popular form in the industry, but the difficulty lies in protecting and sharing such photographs with the permission of the photographer. Sports photographers and even sports fans will be able to register and upload their photographs on the KODAKOne platform and exchange them for tokens securely and transparently.
Denecke further stated that the chosen arenas are a "natural" place to start, given "the millions of fantastic live event photographs generated each year at OVG's Arena Alliance venues." The six participating arenas, include the San Antonio Spurs' AT&T Center, the Wild’s Xcel Energy Center, the Suns’ Talking Stick Resort Arena, the Kings’ Golden 1 Center, the Devils’ Prudential Center and the Pacers’ Bankers Life Fieldhouse
After Kodak filed for bankruptcy, it was unclear whether they would go into any heavy tech-related venture again. However, the company recently launched its Bitcoin mining operation, which will be run by Spotlite.
In partnership with Spotlite, Kodak has commissioned its own mining computer known as Kodak Kashminer. These mining rigs which consume about the same amount of electricity as a hairdryer will be powered at the company’s on-site power plant.
The rental terms for the miners are still unclear, but the preliminary terms stated that miners would sign a 2-year deal and Spotlite would keep half of all mining profits made. At the time of launch, the mining capacity was apparently sold out, and users had to be put on a waiting list.
Kodak’s ICO announcement marks the first time the company has expressed any interest in blockchain technology. The move has been criticized by the public who have pointed out flaws in the concept of what the company is trying to achieve. At this point, it is believed that Kodak is not offering anything that companies like Getty images don’t already provide. There is also the issue of brand confusion concerning the Kodak Kashminers which bore Kodak’s logo on the pre-launch fliers but bore Spotlite’s logo after launch.
Despite these flaws, the company is actively seeking to solve a significant problem in the photography industry. Through its platform, photographers can get proper asset management for their products and have their rights securely protected. It also gives them an industry-recognized and transferable means of exchange for their work. Given the proper push and mode of operation, the platform has the potential to make photography and even digital art a copy-proof industry.