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Kodak and Cineon



Following are a couple excerpts from two Kodak press releases, with my
<<emphasis>> added (full text is at the bottom of this message):

April 3, 1997: Joerg D. Agin, President of the newly-named Professional
Motion Imaging unit, says...

<<"Our Cinesite locations in Hollywood and
London provide us with new and creative insights into future market
requirements for digital image creation and manipulation...">>

Oct. 20, 1997--Today, Eastman Kodak Company's Professional Motion
Imaging (PMI) division announced it will change its participation in the

digital motion imaging software business and discontinue the sale of its

digital hardware products currently marketed under the Cineon brand.

<<``As the leader for film production in television, feature movies, and

commercial production,'' said Richard Aschman, President, PMI, ``we will

continue to play a leading role in digital filmmaking, investing in the
core technologies required for the film-digital interface.>>

Aschman emphasized that the company's motion imaging business is
healthy. ``We have achieved one of our most important strategic
objectives of enabling filmmakers to work digitally at the quality
levels of film,'' Aschman said,

<<``and we are earning a growing
reputation for quality and creativity in our Cinesite digital services
business. We intend to continue that business, to expand our
participation in film markets with a stream of innovative products, and
to explore new customer opportunities associated with other aspects of
Entertainment Imaging.''>>

                                                --

It seems to me that after a few years in the digital film effects
business, Kodak has decided that being an end-user of equipment is far
more lucrative than being an equipment supplier. Divesting itself
of the equipment manufacturing business will allow Kodak to concentrate
on it's profitable service bureau business, perhaps expanding the number

of sites and offering additional types of services (Domino, Inferno, NT
systems, etc.)

Discontinuing the sale of Cineon products will also effectively end the
annoying whining about Kodak competing with it's customers, even though
it may well mean that Kodak will be even more competitive.

Sometimes you get what you want, but you lose what you had.

Joe Wolcott

------------------------------------------------------------------------------------------------------------------

Full Text of Press Releases:

KODAK Sets New Strategy for Professional Motion Imaging

LOS ANGELES, CA., April 3 -- As part of its expanded strategy for the
entertainment industry, Kodak today announced a
new name for its business unit serving customers in motion picture,
television, and commercial production.

Joerg D. Agin, President of the newly-named Professional Motion Imaging
unit, says Kodak is committed to driving the
evolution of film, digital, and hybrid imaging technologies into the
next century.

Agin noted that opportunities for hybrid and digital solutions are
expanding as computer, telecommunications, and
entertainment businesses are converging. In addition, the growing number

of acquisitions, mergers, and regulatory
legislation are creating new dynamics that many experts say will lead to

a dramatic explosion in passive and interactive
entertainment.

"Our Cinesite locations in Hollywood and London provide us with new and
creative insights into future market
requirements for digital image creation and manipulation," Agin said.

Ideas generated at those centers will help drive Kodak's product
development activities associated with image scanners
and recorders, advanced generations of Cineon software, new services
related to content restoration and storage, and
image management solutions that seemlessly integrate Kodak products and
services into customers' imaging platforms.

"In addition," says Agin, "we anticipate steady breakthroughs in film
technology. For the foreseeable future, we believe
film will continue to be the dominant medium for producing high quality
content for cinema, television, and the new
multi-media formats such as Digital Video Disks (DVD's). Film will also
withstand the challenge of the electronic cinema.
The quality gap between film and electronic media is large today -- and
expected to get a lot larger as new hybrid
technologies enhance the quality of the projected film image."

Agin concluded, "Even as we continue to meet the needs of customers we
know so well, it's time for us to rethink our
business strategy and to expand our service to them. For us - - and we
hope, for them, our new name is more than just a
new collection of words. We believe it says clearly: We will compete
wherever silver halide, hybrid, and digital
technologies are used to capture, manipulate, distribute, or display
professional images in motion."

Kodak to Discontinue Cineon Digital Products

LOS ANGELES--(BUSINESS WIRE)--Oct. 20, 1997--Today, Eastman Kodak
Company's Professional Motion Imaging
(PMI) division announced it will change its participation in the digital

motion imaging software business and discontinue
the sale of its digital hardware products currently marketed under the
Cineon brand.

``As the leader for film production in television, feature movies, and
commercial production,'' said Richard Aschman,
President, PMI, ``we will continue to play a leading role in digital
filmmaking, investing in the core technologies required
for the film-digital interface. However, our current business model is
not meeting our financial objectives and sustained
participation would require continuing high investments in technology to

serve a widespread, but relatively small,
customer base.''

For its digital motion imaging software business, Kodak is exploring a
number of options ranging from a strategic
relationship to a sale of the business. ``We are in discussion with
several companies,'' Aschman said. ``We are seeking
an industry leader who has the 'critical mass' and long-term commitment
to serve Kodak's customer base with a
continuing stream of high-quality, innovative products.'' While the
search is underway, Kodak will complete development
of -- and launch -- its anticipated Cineon software Version 4.0
(Outbreak).

``In hardware,'' again according to Aschman, ``our Cineon Genesis
scanners and Cineon Lightning recorders have been
well-received by customers and the special effects industry is healthy,
but the size of the worldwide hardware market
does not justify our continued participation.''

Even as the division takes those steps to change its strategy, Aschman
emphasized that the company's motion imaging
business is healthy. ``We have achieved one of our most important
strategic objectives of enabling filmmakers to work
digitally at the quality levels of film,'' Aschman said, ``and we are
earning a growing reputation for quality and creativity in
our Cinesite digital services business. We intend to continue that
business, to expand our participation in film markets
with a stream of innovative products, and to explore new customer
opportunities associated with other aspects of
Entertainment Imaging.''

According to Aschman, PMI is changing its approach, but its business
objective has not changed. ``Our goal remains P
to push the boundaries of film, digital, and hybrid technologies in ways

that serve our customers and profitably grow our
business,'' Aschman said, ``and today's actions will help to support
that objective.''

Kodak Discontinuing Digital Hardware Line

LOS ANGELES (Reuters) - Eastman Kodak's Professional Motion Imaging
division plans to discontinue the sale of digital
hardware products currently marketed under the Cineon brand, the company

said on Monday.

Kodak also is exploring options, including the possible sale, of its
digital motion imaging software business, the company
said.

"We are in discussion with several companies," Richard Aschman,
president of the Kodak unit, said. "We are seeking an
industry leader who has the 'critical mass' and long-term commitment to
serve Kodak's customer base."

Kodak said its digital filmmaking business is not meeting financial
objectives, and the company faced "continued high
investments in technology to serve a widespread, but relatively small,
customer base."

Kodak plans to complete development of and launch its anticipated Cineon

software Version 4.0 while searching for a
partner or buyer, it said.


---
++ Thanks to Jesper Andersen of Copenhagen for support of the TIG in 1997 ++
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