Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How Fujifilm Survived the Death of Film Photography
Transcript
- Lucas: If these conversations have moved your work forward in some small way, a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many of these. Luna: Yeah, it's a small group that keeps the whole thing ad-free. We don't have sponsors, just that. Lucas: Right. And that's exactly what we're talking about today — a company that had to find a completely new revenue model when its core business collapsed. Fujifilm. Luna: The film company, right? But they're still around. How? Lucas: Exactly. Most people think film died and so did the companies that made it. And one did — Kodak. But Fujifilm? They're a ten billion dollar company today, but almost none of that comes from film. They pivoted into healthcare, cosmetics, high-tech materials. Luna: Cosmetics? From film? Lucas: It sounds crazy until you understand the chemistry. Fujifilm's core expertise was always precision chemistry — coating thin layers of gelatin and silver halide onto film. That requires controlling particle size, oxidation, color stability. Turns out, that same knowledge applies directly to skincare. Luna: So they're using what they learned about preventing film from degrading to prevent skin from aging. Lucas: Exactly. Their Astalift line uses collagen derived from the same technology that kept photo emulsions stable. It's not a gimmick — it's a genuine technical overlap. And it's now a multi hundred million dollar business for them. Luna: But that shift didn't happen overnight. What was the moment where they realised film was doomed? Lucas: The inflection point was around 2000. Digital cameras were hitting the mass market. Fujifilm's CEO at the time, Shigetaka Komori, looked at the trajectory and saw that film demand would collapse within a decade. Most executives would have doubled down on film or tried a half-hearted digital camera push. Komori did something different. Luna: What did he do? Lucas: He commissioned a comprehensive audit of all the company's technologies — not just products, but underlying capabilities. They mapped every technical skill they had: nanotechnology, organic synthesis, optical design, precision coating. Then they asked: where else can these be applied? Luna: So they looked at their toolbox and found new problems to solve. Lucas: Right. And one area that emerged was healthcare. They realised that the same chemical processes used to create photographic film could be used to create pharmaceutical compounds and medical imaging materials. In 2004, they made a critical R&D investment in regenerative medicine. Luna: Regenerative medicine is a big leap from family photos. Lucas: It is. But think about it: film is basically a collagen-based material with active compounds embedded. Regenerative medicine uses collagen scaffolds to grow human tissue. Fujifilm already understood how to manufacture collagen at scale with precise properties. They bought a small biotech company called Japan Tissue Engineering and built from there. Luna: So they didn't just throw money at a new industry — they bought expertise and combined it with their own. Lucas: Exactly. By 2008, they had a product called Tissue Regenix for skin regeneration. Today, their healthcare division does over two billion dollars in revenue annually. That's from nothing fifteen years ago. Luna: And what about Kodak? They had the same technology, same crisis. Lucas: Kodak is the cautionary tale. They invented the digital camera in 1975 but couldn't bring themselves to cannibalise their film business. They tried to protect the old model, and by the time they tried to pivot, it was too late. They filed for bankruptcy in 2012. Fujifilm, in contrast, accepted that film was dying and moved aggressively. Luna: But acceptance is hard. Was there resistance inside Fujifilm? Lucas: Huge resistance. Komori said later that the internal pushback was intense. Engineers who had spent their careers perfecting film didn't want to hear that their work was becoming obsolete. But Komori was relentless. He restructured the company into three divisions — healthcare, high-performance materials, and electronics — and shifted resources aggressively. Luna: He had to let people go, I assume. Lucas: They cut about five thousand jobs globally. But they also retrained many film engineers for the new businesses. The same person who designed film coatings might now be working on LCD optical films or drug delivery systems. That's a different kind of pivot — not just the business model but the people's skills. Luna: So the employees didn't just get fired — their expertise got redirected. Lucas: Where possible, yes. And that's part of why Fujifilm's pivot is so admired. They didn't just abandon their identity. They found new applications for their core competence. Today, they make the optical films used in most smartphone screens, the materials for flat-panel TVs, and even components for semiconductor manufacturing. Luna: And cosmetics. Don't forget the cosmetics. Lucas: Can't forget the cosmetics. Astalift now competes with brands like Shiseido in Japan. The flagship product uses a compound called 'nanosome' — originally developed to prevent color fading in photographs — to deliver antioxidants into skin. It's the same science, different application. Luna: It's almost poetic. The thing that preserves images now preserves skin. Lucas: Exactly. And the numbers reflect that this isn't a vanity project. Fujifilm's healthcare and materials businesses now account for about sixty percent of revenue. Film is less than fifteen percent. They've essentially become a different company while keeping the same name. Luna: What's the one lesson you'd pull from this for other businesses? Lucas: The lesson is: don't ask 'what do we sell?' Ask 'what do we know?' Fujifilm knew chemistry and precision manufacturing. That knowledge was valuable in dozens of industries. But they had to be willing to look honestly at their own capabilities and then pursue markets that didn't exist yet. Luna: And the timing mattered — they started the pivot before the crisis hit. Lucas: Crucially. Komori began restructuring in 2000, when film was still profitable. By the time the bottom fell out around 2005, they already had new revenue streams. That's the difference between a pivot and a rescue mission. Luna: So the question for leaders today is: what's your film? What's the thing you're still good at that might not be the future? Lucas: Right. And are you willing to invest in the new thing while the old thing still pays the bills? Because if you wait until the old thing is dead, you're probably too late.