Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How Fujifilm Survived the Collapse of Film Photography
Transcript
- Lucas: So in the year 2000, Fujifilm was sitting on top of the world. They controlled roughly 35 percent of the global film market. Operating margins were around 20 percent. The future looked basically infinite. Luna: And then digital cameras happened — basically overnight, right? Lucas: Exactly. Between 2000 and 2010, the global demand for photographic film collapsed by something like 90 percent. It wasn't a slow decline. It was a cliff. And Fujifilm's core business — the thing that had defined the company for over 70 years — was vanishing. Luna: So what did they do that Kodak didn't? Lucas: That is the $10 billion question. And the answer starts with a man named Shigetaka Komori. He became president in 2000, right as the digital wave was building. And he didn't wait to see how bad it would get. He immediately commissioned a deep audit of everything Fujifilm was good at — not just what they sold, but what they actually knew how to do. Luna: So he looked at the underlying capabilities rather than just the product. Lucas: Exactly right. Fujifilm's core expertise was in precision chemistry — coating thin layers of chemicals onto flexible substrates with extreme consistency. That's what film is. But that same expertise applies to a ton of other industries: medical diagnostics, flat-panel displays, optical lenses, even skincare. Komori recognized that the film business was doomed, but the chemistry and engineering knowledge inside the company was still incredibly valuable. Luna: And Kodak? They also had chemistry expertise. Why didn't they make the same leap? Lucas: That's the heart of the story. Kodak actually invented the digital camera in 1975. They had the patents, the talent, the resources. But they were paralyzed by the fear of cannibalizing their film revenue. Their leadership kept trying to slow down the digital transition to protect the legacy business. Fujifilm took the opposite approach — they essentially said, 'Film is dying. We're going to cut it loose and build something new, even if it's painful.' Luna: Painful is an understatement. What did the restructuring look like? Lucas: Between 2000 and 2005, Fujifilm shut down multiple film manufacturing plants, cut thousands of jobs, and took massive write-downs. The total cost of restructuring over that period was roughly $6 billion. Their operating profit plummeted. But Komori didn't waver. He reorganized the company into three pillars: health care, high-performance materials, and document solutions. And he poured R&D money into each one. Luna: I want to focus on the health care pivot, because that's the most surprising to me. A film company getting into pharmaceuticals and medical imaging? Lucas: It sounds crazy until you realize that Fujifilm had been making X-ray film for decades. They already understood how to create images of the human body. So moving into digital X-ray systems and mammography equipment was a natural extension. But they went further — they acquired companies in regenerative medicine, invested in stem cell research, and developed a drug for Alzheimer's disease. By 2025, health care accounted for nearly 40 percent of Fujifilm's revenue. Luna: And the cosmetics line — that's the one that always makes me do a double-take. How does a film company sell skincare? Lucas: This is my favorite part of the story. Fujifilm had spent decades studying how to prevent photo degradation — the breakdown of color and material caused by light and oxygen. Turns out, that's basically the same thing as skin aging. Both involve oxidative stress and collagen breakdown. So Fujifilm's researchers realized that the antioxidants they used in film could also protect human skin. They launched the Astalift brand in 2006, built around a molecule called astaxanthin, which is a powerful antioxidant derived from algae. The cosmetics business now generates over $400 million a year in revenue. Luna: That's incredible. So they didn't just pivot once — they kept finding new applications for the same core science. Lucas: Exactly. Another example: optical lenses. Fujifilm's expertise in coating glass led them to develop high-end lenses for surveillance cameras, satellites, and even the semiconductor industry. They now make lenses for extreme ultraviolet lithography machines, which are used to manufacture the world's most advanced microchips. That's a far cry from selling rolls of 35 millimeter film. Luna: And Kodak? They filed for bankruptcy in 2012. They're still around as a much smaller company, but they never really found their footing. Lucas: Right. Kodak emerged from bankruptcy in 2013, but it's a fraction of its former size. Their revenue in 2025 was around $1.5 billion — compared to Fujifilm's $25 billion. The difference really comes down to leadership psychology. Komori told his team early on: 'We have to be willing to destroy our own business before someone else does.' Kodak's leadership couldn't bring themselves to do that. Luna: So what's the takeaway for other companies facing disruption? Lucas: I think the biggest lesson is that your core competence is often broader than your core product. Fujifilm didn't define itself as 'the film company.' They defined themselves as 'the precision chemistry and materials company.' That reframe opened up whole new industries. If you're running a business today and your industry is being disrupted, the first question shouldn't be 'How do we save our product?' It should be 'What are we really good at, and where else could that be valuable?' Luna: And the second lesson is speed. Komori started the pivot in 2000, not in 2005 when it was already obvious. Lucas: Absolutely. He made the hard decisions early, when the company was still profitable. That gave them the cash and the time to invest in new businesses. If he'd waited until film revenue was truly gone, it would have been too late. Luna: If today's episode was useful to you — and I hope it was — let me just say that the reason these conversations stay ad-free is listener support. So if you've gotten some value out of this, you can buy us a coffee at buy me a coffee dot com slash fexingo. No pressure, just a way to keep the show going. Lucas: Yeah, we really appreciate those of you who have chipped in. It genuinely makes a difference. And now, back to Fujifilm — one more detail I think is worth highlighting. In 2025, Fujifilm's operating profit hit a record high, surpassing even its peak film-era profits. That's a remarkable turnaround. Luna: So the company is now more profitable than it ever was as a film monopoly. That's the ultimate vindication of the pivot. Lucas: Exactly. And it shows that even in the face of existential disruption, a well-executed strategy can not only save a company but make it stronger. The question is whether you have the courage to start before the crisis hits.