Kodak Gallery Ghosts: A Year Later, Shutterfly Sues Kodak
December 13, 2013
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Kodak Meets Shutterfly: A Love Story?
It was an extremely strange situation. The fact that the picture-saving device, Kodak Gallery, had a great following was hardly surprising, but for Kodak it apparently had no future.
To begin our story let's look at the Kodak company, which has enticed customers to use its products in wonderful ways over the years. Photographers so depended on Kodak for their needs that songs were even dedicated to their products.
The Kodak Gallery feature was simply one great product offering in a list of many in Kodak's portfolio. However, it wasn't cost-effective for Kodak to keep supporting the Gallery, and the company had plans to move in other directions. Kodak was at a crossroads, with no good way to support the product or to eliminate it without upsetting millions of loyal customers.
Enter Shutterfly, the hero of our story. It said, "I'll save you!" Kodak was grateful and obliged, taking the compensation and handing over its Kodak Gallery users. Following the purchase, Shutterfly closed the Gallery. Millions of users' photos were transferred to Shutterfly's picture-saving and printing service. All was bliss. Shutterfly gained customers and Kodak regrouped with a new market strategy.
Within the terms of their agreement Kodak was allowed to continue doing what it has always done—grow in new and different ways—but Kodak was also bound by a noncompete stipulation.
A Year Later
Here is where the story begins to get sticky—perhaps even downright ugly.
Kodak is wooing customers again with a new picture-saving and printing service accessible from a smartphone. Shutterfly is suing Kodak, alleging that their new market strategy competes with Shutterfly's service, thus violating their agreement.
Where did the affair go wrong?
Is Kodak cheating on Shutterfly by shifting in this new direction? Did it simply ditch its old Gallery, unloading it onto an unsuspecting Shutterfly? Or did Kodak simply decide to move in a new direction, not viewing a smartphone app as competition?
Was Shutterfly in predatory mode, intending to knock out Kodak by purchasing its Gallery and then including a noncompete in their agreement? Maybe it was just looking for tech-savvy photographers and thought that purchasing and closing Kodak Gallery was a smart way to get them?
Only the courts can decide whether this story will have a happy ending.
Photo credit: Flickr