The beginning of the end?

Yesterday, Olympus announced that it was selling off the camera business – which for most photographers probably seems a bit strange seeing as that’s their primary association with the company; after all, if a camera company doesn’t make cameras, what’s left? As it turns out, medical and scientific divisions account for nearly 78% of revenue; scientific a further 13+%, and cameras – just 6.1%. It’s also the only loss making division – and loss making for some time. And let’s not even begin to talk about the corporate scandals of the last few years. From a corporate point of view, no matter how storied, you look at the numbers and it becomes pretty difficult to justify continued operation especially in light of a global photographic market that is itself contracting and stagnating. I’m going to try and answer three questions now: what happens to Olympus next? What does this mean for M4/3 and its user base? And what could this signal for the rest of the industry?

The first question is fairly simple. The camera division has been bought out by Japan Industrial Partners, what appears to be a sort of quasi-government-linked fund that buys domestic brands that for want of a better description, are deemed significant to national interests. A large part is probably not wanting to have major Japanese brands fall into foreign ownership – or at least not publicly. Olympus would appear to fit that description quite well. This means two things: firstly, unlike a western VC/PE, they are unlikely to do an asset or IP strip even though this would be the best option to maximise immediate value given the patents held etc; the company will probably remain a going concern for the time being, with little changing from a public standpoint other than probably some reduction in advertising and promotion spending. Internally, there will be restructuring and product line rationalisation; frankly given how close most of the Olympus products are, it’s probably about time.

The real question is whether the R&D spend required to bring about the next generation will happen or not: without it, M4/3 can’t pass the wall it’s hit for some time now. We’ve had 20MP since the 2016 PEN-F, and the current 16MP sensor has been around since 2013 in the E-M1. Even though we’re at Mk III now – image quality is for all intents and purposes, the same. Yes, the new cameras are a bit faster and the stabilisers a bit better, but none of these improvements are the kind of thing that will drive consumer desire to the point of opening their wallets because they’re simply not significant enough changes. And like it or not, whilst there was some size justification for M4/3 before FF mirrorless matured, I think that doesn’t really exist anymore. A Z6 or Z7 will give you easily three to four stops (or more) wider shooting envelope, and pack to almost the same size with some judicious lens choices. Not to mention more dynamic range, resolution, color acuity etc. Worse still, a Z6 is about the same price as an E-M1 III. At this point, I actually think simplifying some of the critical tech in the E-M1 line and bringing it to a consumer level is likely to bring more advantages: a smaller, significantly less complex body with the same envelope would still be streets ahead of cameraphones, yet not as large, expensive or intimidating as an E-M1 type camera. It remains to be seen if the new management will have the depth of understanding of the camera industry required to see what shrinking spaces in the market remain unconquered and the necessary stones to take the risks. At this point though, they’ve got little to lose.

As for the second question: M4/3 fortunately grew beyond Olympus, even though I’d argue that they’re the driving force behind most of the development – moreso than Panasonic, whose focus is more consumer and increasingly shifting towards the SL-mount. However, there’s one curveball: video. There’s enough demand here that video is what might keep M4/3 alive in the long run; it’s a sweet spot in sensor size and doesn’t have quite the same demands as FF on the ancillaries. What worries me is that the consumer/entry markets and pro video might be served, but there won’t really be anything for the enthusiast stills photographer. At a more personal level, I wouldn’t be worried about support in the near immediate future, but come two to three years – that might no longer be the case. I suppose given the reliability of Olympus cameras in general (especially compared to some ‘premium’ brands) it’s not likely to be a major problem, but depending on how the next year shakes out – you might want to either divest or double down, depending on how much you like your M4/3 system.

Finally, we bring out the crystal ball for the industry as a whole. COVID has not been kind to any industry except perhaps videoconferencing, delivery services and some branches of online retail; between movement restrictions and companies/ clients on hiatus, photography all but came to a standstill for several months. The enthusiast market couldn’t leave their houses to shoot; clients were not operating and thus didn’t hire photographers who couldn’t leave anyway; those of us with majority international business that required extensive location travel basically went dry. The workshop market became unfeasible overnight. What’s interesting is the unlocking period hasn’t been entirely doom and gloom. I’ve heard from several retailers that it’s been a very good run at the high end, with pent up demand and boredom (“revenge spending” and not having anything to spend on anything for months) driving a rush of purchases. Belts have tightened at the low/consumer level, and that’s basically bottomed out. Pro spending has gone to zero as they try to keep their lights on – not that pro spending has been a significant driver of the hardware market for some time, anyway. What happens beyond the immediate horizon is a bit tougher to predict. Will businesses and consumers maintain the belt tightening in fear of a reprise, or will revenge spending dominate? Will the high end keep buying even if they can’t use the gear? (Not too different to previous normal, I guess).

My best guess is that we’ll see an acceleration of the consolidation that already started in the previous couple of years. There will be fewer manufacturers left, and those that do will mop up a shrinking consumer market. I have a feeling Pentax may be next, along with noises of a Phase One buyout by Sony – though my personal fear is the Z system will never see maturity (though I don’t see what other option Nikon has for survival but to complete the transition from F). There’ll be fewer pros left to service less serious client demand as content creation moves to almost entirely disposable and in-house generated; those that remain will likely do very well as they will be the final providers of a dying skill set, especially for very high end work. I can’t say if travel (and all of that associated spending, between hardware, workshops etc) will ever go back to normal; I know personally I would rather avoid it for the forseeable future if I can, not that we are allowed to leave the country anyway. Yet I also feel the responsibility to do our part to keep the overall economy going: if everybody stops spending in anticipation of a recession, then that very act will trigger a recession. Talk about a self-fulfilling prophecy!

Whilst I haven’t engaged in any revenge spending myself, I’ve used the time to rationalise my own hardware around what I’m likely to be doing more of for the next year: less or no travel with a photographic component, little of the usual corporate documentary or overseas assignments, a whole load more watch work in the studio here. Unused hardware has gone in favour of some things to expand my macro and closeup options, taking advantage of the short flange Z mount and new electronic adaptors: a Canon TS-E 135/4 Macro and a Voigtlander 2/110 APO-Lanthar (yes, E mount, but thank you Techart). There’s also been consolidation of the Z7 into scalable kits: with the Z 16-50 DX pancake for when you aren’t sure you need a camera but would like to have one just in case; with the new Z 24-200/4-6.3 all-in-one superzoom for lightweight; that with the addition of two fast primes – the Z 20/1.8 S and Z 85/1.8 S (or use on their own, for low light); and a two-body Z 24-70/2.8 S and 70-200/2.8 FL solution for assignment work. I finally also got a couple of convertible boom stands; they seem to be perpetually out of stock here.

Bottom line advice: ask yourself what you want to do photographically, offset that against what you can do given current restrictions. Use this to rationalise your hardware and support your local retailers and favourite manufacturers, and then figure out what skills you need to get you there (perhaps seeking a little outside help) – in other words, pretty much the same thing I’ve always advocated. It’s just that now we have some restrictions thrown in; but on the bright side, restrictions are always known to spur creativity… MT

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