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KMG Licenses Kodak To Sell Optical Media

1/13/2010 03:49:37 PM Eastern

Rochester, N.Y. - KMG Digital, a company that includes
several key former Memorex executives, has obtained the exclusive worldwide
license for Kodak-branded optical blank media products and media accessories.

Mike GolacinskiHeaded by former Memorex CEO Mike Golacinski, Rochester-based KMG
(formerly KMP Media) will market Kodak-brand recordable optical blank CDs,
DVDs, Blu-ray discs and media accessories, with a focus on the office
superstore, electronic specialty, discount and member club channels, as well as
strategic online partners, the company said.

Golacinski headed Memorex Products from 1998 until its sale to
Imation in 2006. Under Golacinski's tenure as president and eventually CEO, the
Memorex brand became the market leader. Golacinski was also executive VP of
Maxell Corporation of America
prior to his time at Memorex.

Industry veterans Steven Mizelle, Jim Gordon and Robby Williams
have been retained by KMG Digital. Mizelle is VP and COO and manages the Rochester sales and
operations facility. Gordon is international sales VP, directing sales to Latin
America, Asia and Australia.
Ten-year KMG veteran Robby Williams is operations director.

Also on board at KMG: two former Memorex sales VPs - Pete
Steriti, as KMG's senior U.S.
sales VP, and Ed Coughenour, sales VP, western region.

Golacinski is based in KMG Digital's Los Angeles office along with former Memorex
product planning director Brad Yeager, KMG's new marketing director. Yeager
spent 10 years at Memorex with Golacinski.

European operations will be headed up by managing director
Jean-Paul Eekout, based in The Netherlands. Eekout previously was worldwide
director for the TDK brand.

"We see a tremendous opportunity to bring both innovation and
efficiency back to the optical media business while we evaluate other CE
categories that we'll develop and market with the Kodak brand name,"
Golacinski told TWICE. "Without any burden of legacy issues and with our
experience in the industry, we've put together a veteran team to bring
excitement and value back into the media business."

Asked why he decided to return to the category after several
years away, Golacinski remarked "Most of my career, if not all of my
career, has been in removable media ... it's kind of in my blood. And we saw an
opportunity. Optical media is a mature to slightly declining category, true,
but it's still a $2.5 billion global business, with $650 million to $700
million of that in the U.S."

"We also think the industry over-consolidated in the past
few years," he continued, "not only on a brand level but on a
manufacturing level. Globally, you have only two or three prominent brands and
the vendors that are out there are pretty heavily structured - large companies
who are involved but not focused on removable media, or treating it like a
harvest category. We are far leaner, faster moving, and in a promotional
commodity category that can be a great advantage. And this category is too
vibrant to be relegated to the background."

Golacinski spoke of the strength of the Kodak brand on a global
level. "The entry points to this category are distribution and a strong
brand. I don't think you can enter any retailer anywhere and not find them
carrying at least some Kodak products. The distribution base is quite
large."

In terms of marketing, KMG is taking a different approach than has
been the norm in the category. "The standard high/low price strategy has
seen better days - some variation on an everyday low pricing approach seems to
make the most sense in this environment," Golacinski said. To that end,
KMG has created specific pricing model options tailored to specific channels
and even specific retailers. "This is where we see our ability to make
decisions quickly pay off."

On the market now under the Kodak brand are blank CDs, DVDs,
Blu-ray discs and media accessories. "Our global distribution is ahead of
our U.S. distribution a bit
- we are already a top three player in some international markets,"
Golacinski said, and KMG has its sights set on the U.S. market in 2010, now that the
company's sales network and rep networks are in place.

Golacinski promised an expansion of the franchise this year,
expanding into a few new (as yet unspecified) product categories as well as
shipping an eco-friendly line of recordable media, complete with
environmentally friendly packaging, by the late second quarter or early third,
in time for the holiday selling season. Further technological differentiation
of current product is also on tap. "The category is not dead - it just
needs a shot of new energy, new excitement. We're here to do that," he
said.