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CNN Live Sunday

Polaroid's Flash is Fading

Aired July 15, 2001 - 17:44   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
STEPHEN FRAZIER, CNN ANCHOR: Let's flash back to the 1970s, when Polaroid was one of the nation's fastest-growing companies. It turns out, now the camera maker's flash is fading. Polaroid's I-zone camera is the most popular in the world, but the company is having problems paying the bills and could face bankruptcy.

For more on Polaroid's financial woes, we're joined by Ken Kurson, editor-at-large for "Money" Magazine, and joins us live from our Chicago bureau.

Mr. Kurson, thanks for coming in.

KEN KURSON, "MONEY" MAGAZINE: Thanks for having we. I'm scared we are taking precious minutes away from the Chandra Levy story.

FRAZIER: Well, that's a big one, yes, but this is precious moments finally devoted to something else. We are glad you are helping us with Polaroid.

This is a company that seemed to have a lock on one kind of technology; but is that technology of any value now, as cameras go digital? And the information shared on computers?

KURSON: It's really looking dubious for the fate instant photography on paper, which is Polaroid's bread and butter. As the intro said, they do have the most popular camera in the world, but who cares? Nobody can name any other camera by model number. And, it's just not a profitable business at this the point.

FRAZIER: So -- go ahead.

KURSON: It's also not as bleak for Polaroid as the missing of the bond payment Thursday, and they will miss another one in August. Because they have some really interesting new technologies.

FRAZIER: Let's back up on that -- that is what's coming up this week, is Polaroid's decision to skip payments of interests on bonds to people holding those bonds.

KURSON: That's right. People -- there are bondholders have high-risk debt. So, it's unsecuritized. So, Polaroid feels that since the creditors can't come in and take their land and their desks and their computers, they might as well skip the payment, try and preserve precious cash and run their business. And that's another plus side, is that, according to all their suppliers from people I talk to, Polaroid is paying its bills, its paying its workers; its checks aren't bouncing. So there's talk on the street that they are just sort of playing hardball with the bondholders, trying to force them into position to renegotiate the debt.

FRAZIER: And buy themselves some time for those interesting technologies you mentioned. And I guess that's their salvation now, is to be nimble, and to come up with new products. Like what? -- What were you talking about?

KURSON: The two big ones are Opal and Onyx, which are basically the same thing: Opal is the color version and Onyx is the black and white version. This is supposed to give you the ability to take instant pictures, from any camera and use Polaroid's technology to print photograph quality prints on your printer. So it's really getting off the idea of being both a software and a hardware maker which has not been successful for just about anybody.

So Polaroid hopes that this kind of stuff would lead it into sort of quirky consumer businesses. Like, the Opal can print temporary tattoos teenage that I'm told teenagers are just crazy about.

FRAZIER: And it does that by selling little film packs that look like paper, and I can put that into a Nikon or a Canon, and then go out and print it on Polaroid material.

KURSON: Well, it would print in the -- the Polaroid product would go inside your computer printer, so that would be the idea there. And according to the people I talked to, it's supposed to be pretty impressive technology. And really, technology hasn't been the problem at Polaroid. If you -- there are few companies, whose very name means what they do, but I'm thinking of another one, Xerox, and they're in just as big a problem, if not worse than Polaroid.

So, sometimes, being good at what you do and being a leader at what you do aren't enough. You have to make money.

FRAZIER: Well, I hope that these insights help us understand what is happening to them in the coming days -- very tense days for a proud American name.

Thank you, Ken Kurson, for bringing us up to date on that; we will be keeping in touch as they work their way through this one.

KURSON: Thanks for having me.

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