Cheap ink printers, Kodak marketing, and Consumer Reports

A while back I recall reading some article (probably the precursor to this 2008 article) about how Kodak was looking to enter the printer market through cheaper ink. People are constantly complaining about the price of ink. A couple months back I looked around at printers and, after hours of browsing, was not able to confidently conclude that Kodak were cheaper on ink. I recall that some consumers on Amazon said the apparently cheap Kodak ink did not last as long. It has been a while since Kodak tried its strategy

I was about to give up on making an informed purchase in frustration when I remembered my Consumer Reports subscription. I logged in and find a neat table with a column called "text cost", which is the estimated ink cost to produce a single page of paper. From the table Kodak does not stand out as having the cheapest printer for ink, with pages generally costing around 3-4 cents - about average. The Lexmark Prospect Pro205 ($200) stood out at about 1 cent a page, but the cheaper Lexmark printers are in the 4-5 cents/page range, with a high of 12.6 cents a page for the $50 Lexmark X267. Lexmark has actually been advertising its new "Vizix" line of printers as the cheapest per page since at least 2009, although some argue it's going to be difficult for them to break into the commercial market over laserjet printers even then. In the meantime, the market is favoring Lexmark quite a bit more than Kodak at P-Es of around 9 and around 5, respectively (trailing twelve months according to Google Finance).

The whole printer and ink question is sort of interesting from the perspective of economics. It's similar to the whole "prisoner's dilemma" game theory applied to oligopolies in economic theory. The situation is theoretically an oligopoly where none of the printer manufacturers is willing to cut prices on the ink. It could be that Kodak cut ink and thereby forced the industry to cut ink prices and innovate. However, the article above on Kodak suggests that it did not really have much of an impact, but even a small impact could change the competitive strategy situation. The industry was happy to cooperate but one player (in this case Kodak, an outsider), disrupted the party and the others cut prices preemptively.

There are similar situations throughout all industries - Skype is disrupting the phone companies, Netflix disrupted Blockbuster and is now disrupting cable companies. Direct insurers disrupt agent-based insurers. Even a direct title insurer has entered the market - Entitle Direct - so use it to save yourself a few hundred. My savings bank account is left neglected ($0) as all my savings is invested directly through a retail brokerage. Disintermediation will continue to rule. Hell, these days when I go to my doctor I'm already more well-informed on my specific condition than they are. This is a good thing for people like me, but the end result of this trend is fewer jobs as unnecessary people and infrastructure are cut out. Slowly but surely, unemployment will continue, as Martin Ford (the author of The Lights in the Tunnel and the econfuture blog) has discussed at length.

Enough rambling. Sign up for a subscription to ConsumerReports.org for $30 and promote efficient products while improving your pocketbook.