The demise of the film camera industry didn't work out well at Kodak, but so far things are working out better with an effort to capitalize on another digital revolution: cryptocurrency.
On Tuesday, Kodak announced the KodakOne service, a technology based on the KodakCoin cryptocurrency and designed to let photographers get paid when their photos are used without a license. The service is actually run by Wenn Digital, an agency that represents many paparazzi, which licensed the Kodak name for the service.
Bitcoin, the founding member of the cryptocurrency craze, has exploded in value in recent months, and investors apparently like the sound of KodakCoin. Kodak's share price nearly doubled, to $6.02, in midday trading Tuesday.
The KodakOne service and KodakCoin uses a different cryptocurrency foundation, the Etherum Project's ether, which also has surged in value. The heart of the system is a technology called blockchain that photographers can use to establish ownership of their photos, but the service also registers copyright with the US government and pursues claims of infringement. Photographers get 60 percent of any proceeds, and Eastman Kodak and Wenn Digital split the remaining 40 percent, the companies said.
"The partnership between Kodak and Wenn has the opportunity to protect the digital rights of photographers at a time when digitization has taken away artists' abilities to make money," Kodak Chief Executive Jeff Clarke said at thetechnology show. "It does their monetization for them in a very easy, automated way."
Cryptocurrencies are hot right now, but it's still not clear how much of their surging value is from new utility and how much is from hype among investors trying to buy more as they've seen values soar. Bitcoin is worth about $14,800 today, up from $894 a year ago, and ether has increased from $10 to $1,221 over the same period. That kind of action has fueled other cryptocurrency businesses -- and warnings by governments about cryptocurrency fraud.
Blockchain is the technology that's used by cryptocurrencies to keep a record of transactions shared among many computers on a cryptocurrency network -- a major change in approach from the centralized databases that prevail today at banks, businesses and others keeping track of the flow of money and other assets.
Once photographers have registered their images -- a process that includes validation technology to ensure they have rights -- the service crawls the web looking for unlicensed uses, said Cameron Chell, Wenn Digital's chief advisor to Kodak for the deal. The service then seeks payment.
"You have Immutable proof of copyright and registration for statutory damages as well," Chell said. "For 85 percent of what we find, we collect on without any human intervention at all."
Photographers who choose to get paid in KodakCoin will get their virtual money immediately, but if they want traditional money, it takes longer, he said.
KodakCoin will be the foundation of "a new economy for photography," the companies said. As Chell envisions it, the KodakCoins could be used to purchase photography-related travel, equipment and services.
Some photographers already are signed up with the KodakOne service, but Kodak will market it to bring more on board.
First published Jan. 9, 12:29 a.m. PT.
Update, 1:58 p.m.: Adds further detail.
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