posted 10-07-2003 08:43 AM                       

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Amusement Acquisition: a Kodak Moment

Randolph Court

03:23 PM Apr. 16, 1998 PT

You're strapped into a hollowed-out log about to drop 50 feet straight into the water. With your hair standing on end and your jaw in your lap, your face becomes a portrait of exhilaration, panic, and motion sickness. Best of all, it's on film –- cameras installed on thrill rides at theme parks from Disneyland's Splash Mountain to the looping Great Bear at Hershey Park in Pennsylvania catch you mid-ride and then sell your pictures for about US$10 so you can remember that moment forever.

Now the folks in Rochester, New York, want to make that a Kodak moment. Hoping to bolster a little corner of its vast -– but struggling -- US$14.5 billion imaging empire, Eastman Kodak Co. said Wednesday that it acquired Rave Reviews Innovative Concessions Inc. and Rave Reviews of Canada for an undisclosed sum. The two affiliated companies design and install photographic systems for thrill rides and other image-related businesses in theme parks.

"It's one more indication that we're very enthusiastic about this business -- and that we intend to be a leader in it for the long term," said Doug Pileri, general manager of Kodak's "themed entertainment" business, in a statement. "Current parks are expanding. New ones are being built. All of them provide great channels for our expanding variety of Kodak's entertainment-imaging products."

Kodak also posted first quarter profits of $225 million on Wednesday, up 50 percent from the $149 million of a year ago. But that success followed a year in which the world's largest maker of photographic film announced it would have to slash its payroll by 16,000 workers in a bid to shed $1 billion in costs. It has been suffering losses in part due to stiff competition from Fuji Photo Film of Japan.

But Kodak is not wasting its energy in a stubborn bid to hold on to its eroding share of the consumer print market. Instead, the company has been turning its sights to new markets, like digital imaging, where it saw somewhat encouraging signs this quarter -- that business improved from a loss of $140 million in last year's first quarter to a loss of only $55 million this quarter.

Kodak’s entertainment-imaging division, which includes its motion-picture film business, showed increased sales from 1996 to 1997. One part of entertainment imaging is the themed entertainment business, which provides imaging products and services to theme parks, studio-owned retail ventures, movie theaters, and the like. That's where Rave Reviews fits in.

Kodak said the Rave companies will be dissolved and integrated into the rest of the themed entertainment businesses operated under Kodak's entertainment-imaging division, which is working on a whole range of newfangled variations on the photography business. That means stuff like sticker photos, fantasy theaters that allow you to superimpose an image of yourself into any scene you want (say sliding into home plate in a major league baseball game), and dynamic imaging technologies that make it possible to put a few seconds of full-motion video onto a trading card.

Kodak has also developed its own still-photo system for the thrill ride market. Rave Reviews also developed a video system, but that's not the reason Kodak bought the company, according to Mark Stolper, director of strategic alliances and portfolio management for Kodak's Entertainment Imaging businesses.

"The purpose of purchasing [Rave Reviews] was not a tech play," Stolper said. "It was more of a distribution play."

Stolper said theme parks have been signing long-term contracts with little imaging companies like Rave Reviews and RX Technology to provide the thrill-ride photography system for individual rides. Rave Reviews claimed 40 installations in six theme parks in the United States and Canada.

And the photos seem to be popular. People apparently love to be caught in the act of doing whatever they do in that moment of wild surrender: whether they scream, cry, or take off their clothes. A number of young women apparently prefer the latter, as the Flash Mountain site has chronicled.

By buying Rave Reviews. Kodak immediately lands 40 installations in six theme parks -- including four Paramount Parks -- where Rave Reviews has established itself.

"It helps us build the thrill-ride photography business we're already in, and it allows us to expand our distribution system to provide other added- value Kodak products, such as sticker kiosks, and fantasy theaters," said Stolper.

Stolper said it is too soon to know how big the thrill-ride photography business will be in the United States, but he pointed optimistically to the successes of other new businesses elsewhere. Sticker kiosks, which are just catching on in the United States, are already a US$1 billion a year business in Japan.

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