Will show on Friday 26th March 2021 at 8PM GMT
It is now almost one year since Covid-19 lockdown in UK and a bit more since my business travel has stopped. Next week I will getting my Covid-19 first vaccine jab but we do not yet have full clarity about the implications on leisure and business travel. The various countries are dealing with the pandemic with different degrees of speed and effectiveness and it is possible that some of the most exotic diving destinations will be on the allowed travel list later than western countries.
Many people have discovered local diving out of necessity and some have also done underwater photography in their bath, however for me this was not sufficient.
Since last year I formally joined a photography club and looked at expanding my interests. In 2020 as I have been staying at home I have taken the highest number of photos to date.
At beginning I thought: how can I reuse some of my camera lenses I use underwater on land? Mostly this was about macro in the garden. Slugs, bees and flowers were part of the first part of the journey.
I soon realised the skillset was similar but not identical and there were specific requirements to be fulfilled.
I then moved into abstract tried some portraits and more night photography. I needed to start investing in more lenses as I was getting more specialised and improving in the task.
I also started some bird photography in the garden using feeders to entice little birds. This proved challenging but I discovered I much more preferred predators and larger birds so I started going on walks locally to photography red kites. I already had a long lens so with a teleconverter started getting better at photographing birds in flight.
All of this has been done locally without the need to travel.
After a short summer break, where I got to do some diving re-discovering the beauty of Sorrento peninsula and the amazing diving on the coast, it was time to get back to England with the somewhat grim prospect of a very dire winter in full lockdown.
And then something happened thanks to the friends of the New City Photographic society I discovered an amazing location on my door step.
Woburn Abbey and deer park owned by the Duke of Bedford and spanning across the towns of Woburn and Ridgmont.
I went there the first time in November and literally fell in love with the location. After many early morning rise and many pictures taken I decided it was time for a video project.
Deer are sufficiently large that are not too difficult to film compared to birds and are extremely rewarding as they tend to stare at you.
The winter season has been an opportunity also for late sunrise which meant not so early wake up calls to get there for the golden hour.
Now that we are coming to the end of the full lockdown scheduled for March 29th I have decided to release a short film to remember what it was during this period and the magic moments I had the privilege to experience mostly on my own in the Woburn Deer Park.
The film will be released on my YouTube channel on Friday 26th of March at 8PM GMT. To make it easier to digest I will upload it in separate parts and if possible as a whole. YouTube is being very slow to process footage in the last months so I hope it will be all up next week.
I hope you will enjoy it. It is a total of 26 minutes of duration out of around 2 TB of video material collected in the months of January, February and March 2021. I will be putting posts on how it was shot in case you also want to expand your horizons…
The previous post on the technical nature of V-LOG has stirred up quite a bit of unset among those people that advocate the use of it as a preferred gamma for video capture. In this post I will show some data point to help you make an informed decision based on what you are planning to shoot in your video project.
Basics of Display Gamma and Dynamic Range
First of all a bit of background on gamma curves. The standard video gamma is based on a correction factor of 0.45 as screen decode it with the reciprocal value 2.22.
Cinema gamma is historically based on a value of 1/2.6 as projectors decode with a gamma of 2.6.
Today most of our content is consumed on phones, monitors or Tv screens as well as of course cinemas but for the purpose of this post I will assume we do not have a real ambition to project in cinemas.
To give some ideas of the dynamic range of the display consider those values
|Tv (1886 HDTV)||11|
It is important to understand how the content we produce will be consumed when we capture our source material as otherwise our video pipeline may be suboptimal.
Mobile phones and tablets are now the predominant platform to consume content and looking at the table above this means that in terms of dynamic range there is not a high requirement. In addition phones and computer monitors may also not be particularly accurate in terms of colour rendition.
HDR content, due to lack of widespread compatibility, is growing on mobile phones but remains a product for high end platforms such as HDR TVs and Projectors.
It follows that content that will be displayed at the best quality on the most common platforms has pretty limited requirements in terms of dynamic range and other qualities are perhaps more important such as sharpness, low amount of noise, colour rendition and delivery of what looks high contrast on a limited contrast medium.
A further obvious consideration is that standard rec709/sRGB video is limited to 10 stops of dynamic range in the display (contrast ratio 1000:1) while new TV sets aligned to BT.1886 can display 11 stops )(Contrast ratio 2000:1). So no matter how you acquire if you end up in rec709 the dynamic range is limited and it becomes more important to accurately capture tones and colors.
Gamma Curves for Capture
As explained capture gamma is the reciprocal of display gamma and therefore majority of cameras capture a standard video gamma (0.45) or in some cases an HDR gamma (logarithmic). I do not want this post to become a deep dive on HDR video of which I have written enough however to stay on course I want to compare traditional gamma (non linear) and log gamma.
In the following graph you see the bit codes output vs input of a standard video gamma (1/2.2) a cine gamma (1/2.6) and a log gamma (v-log).
In broad terms you can see that a video gamma produces an output of 3865 vs 16383 bits, a cinema gamma sets at 3166, while a Log gamma can take all 14 bits of data and still be within bit value 960.
It follows that to store the whole set of values read at 14 bits into a 10 bits container a standard gamma needs to do some scaling while a log gamma does not need scaling to fit into a 10 bits container. This also explains why exposure values in log are 2 stops higher than standard video for a 14 bit range, while for a 12 bit range the offset is one stop. As the meter is using a standard RGB gamma all values are rescaled back.
You notice that at no point here I have made references to dynamic range. The camera dynamic range is solely related to the maximum well capacity vs the read noise and it does not relate to the gamma curve being used, however the different compression of the gamma curve have an effect on how tones are mapped and on the perceived dynamic range.
Camera Dynamic Range vs Display Dynamic Range
The overall camera dynamic range influences what you can do with your content and if it is worthwhile to produce an HDR version or not.
If we compare the previous table of display dynamic range vs camera dynamic range and we focus on nominal values (SNR=1) and photographic (SNR=20) we can see what device we need for our purpose.
|Camera Type||DR||PDR (SNR=20)|
We can see that if all we need to do is to output on a mobile device or a computer monitor smaller sensor are adequate, however for HDR production larger format are preferred. Obviously we can stretch SNR to lower values and this will upgrade the above table of 1 stops or so but not change our reasoning substantially.
Gamma curves vs Bit codes mapping
The various gamma curves have a different distribution of tones (bit values), in this table I compare a video gamma vs cinema a reduced 12 stops log and a full Vlog for a full frame sensor camera.
For the purpose of this comparison blacks are bit codes in the lowest 10%, Shadows are up to 18%, midtones up to 75%, highlights up to 90% and whites above. Blacks and whites do not have color information but just brightness while shadows, midtones and highlights contain respectively dark, medium and light hues.
A standard video gamma has over 45% of midtones, those are the colors and tones with intermediate values so produce softer tones. Shadows are just above 35% with highlights under 10% and blacks and whites around 5%.
If we look at a cinema gamma we can see that shadows are now predominant and very close to the midtones, highlights, whites and blacks are compressed.
V-LogL (12 stops DR 12 bit implementation) has the largest range in shadows, midtones are compressed around 50% compared to a video gamma, blacks are subtantially more than a video gamma, and while highlights are compressed, whites are super whites are greatly expanded.
Full VLog is dominated by whites that make 38% of the bit values, Shadows are at 32% with midtones now under 20% and highlights compressed. Blacks remain expanded.
Choosing a Gamma Curve for your Video Project
Our decision tree starts from the content which determines the device we need. Once we have a device capable of a given dynamic range we can make appropriate choices in terms of gamma curve.
Broadly speaking compact cameras and micro four thirds do not have enough device dynamic range at sufficient level of SNR to justify a high dynamic range gamma. There are some very specific exception where this may be worth it (Panasonic GH5s) but in general terms a standard MFT camera for photography should be limited to video or cinema gamma for optimal results as the dynamic range is limited and compression is not required.
If you own an MFT camera your choice is between a video gamma and a cinema gamma. Depending on the look you want to achieve you may choose one or the other. Video gamma has generally more contrast (more blacks and highlights and whites) while Cine gamma has a balance between midtones and shadows but not strong blacks and whites giving overall a softer look.
If you own a full frame or apsc camera you have more options which means you need to think more about the gamma curve to be used. HDR content requires a log curve you can then decide to use a cinema or video gamma if you do not want to output HDR or want to achieve a different look. It is important to note that log gamma have lots of bit values in whites and super whites and those do not exist in many typical scenes.
Scene vs Dynamic Range
While the current effort of camera manufacturers is to promote high dynamic range the reality is that in most cinematography situation you use devices that reduce contrast and therefore dynamic range (think about pro mist filters).
The DR of a scene can be evaluated looking at the histogram. This is of course influenced by the gamma curve so it is important to do this evaluation taking a photograph not video.
The following are example of scenes with the underlying histogram.
It may be useful to see the effect of LOG using the LUTs in photoshop on the raw data
The example above shows that a significant number of midtones have been lost in the conversion with no DR benefit as the scene essentially lacked it.
For underwater video purposes as the water reduces contrast and smooths highlights I would not recommend shooting log or HDR with the exception of very specific scenarios. Likewise if I am shooting a v(ideo)log or an interview there is no requirement for extra dynamic range and log compression is not required.
Outdoor scenes especially in bright conditions, snow, are appropriate for HDR and should be shot with a log format assuming of course the luminance of the scene is not being reduced with ND filters or similar.
Events like weddings can have challenging conditions with a mix of low contrast indoor and bright outdoors with the bride typically dressed in white so in effect those can be very demanding on the equipment but you need to bear in mind that if your delivery format is just HD video the benefit of log gamma are greatly reduced and extensive work may be required to bring colours back in check, always account for the limitations of your equipment as well.
There is no doubt that LOG formats in digital cameras have a halo of mystery around them mostly due to the lack of technical documentation on how they really work. In this short article I will explain how the Panasonic V-Log actually works on different cameras. Some of what you will read may be a surprise to you so I have provided the testing methods and the evidence so you can understand if LOG is something worth considering for you or not. I will aim at making this write up self-contained so you have all the information you need here without having to go and search elsewhere, it is not entirely possible to create a layman version of what is after all a technical subject.
A logarithmic operator is a non-linear function that processes the input signal and maps it to a different output value according to a formula. This is well documented in Panasonic V-Log/V-Gamut technical specifications. If you consider the input reflection (in) you can see how the output is related to the input using two formulas:
- IRE = 5.6*in+0.125 (in < cut1 ) *
- IRE = c*log10(in+b)+d (in >= cut1 )
Where cut1 = 0.01, b=0.00873, c=0.241514, d=0.598206
There are few implications of this formula that are important:
- 0 input reflectance is mapped to 7.3% IRE
- Dark values are not compressed until IRE=18%
- Middle Grey (18% reflectance) is still 42% IRE as standard Rec709
- White (90% reflectance) is 61% IRE so much lower than Rec709
- 100% IRE needs input reflectance 4609 which is 5.5 stops headroom for overexposure.
So what we have here is a shift of the black level from 0% to 7.3% and a compression of all tones over 18% this gives the washout look to V-LOG that is mistakenly interpreted as flat but it is not flat at all. In fact the master pedestal as it is known in video or black level is shifted. Another consequence of this formula is that VLOG under 18% IRE works exactly like standard gamma corrected Rec709 so it should have exactly the same performance in the darks with a range between 7.3% and 18% instead of 0-18%.
In terms of ISO measured at 18% reflectante V-LOG should have identical ISO value to any other photo style in your camera this means at given aperture and exposure time the ISO in a standard mode must match V-LOG.
When we look at the reality of V-LOG we can see that Panasonic sets 0 at a value of 50% IRE so generally ⅔ to 1 full stop overexposed this becomes obvious when you look at the waveform. As a result blacks are actually at 10% IRE and whites at 80% once a conversion LUT is applied.
Challenges of Log implementation
LOG conversion is an excellent method to compress a high dynamic range into a smaller bit depth format. The claim is that you can pack the full sensor dynamic range into 10 bits video. Panasonic made this claim for the GH5s and for the S1H, S5.
There is however a fundamental issue. In a consumer digital camera the sensor is already equipped with a digital to analog converter on board and this operates in a linear non log mode. This means the sensor dynamic range is limited to the bit depth of the analog to digital converter and in most cases sensors do not even saturate the on board ADC. It is true that ADC can also resolve portions of bits however this does not largely change the picture.
If we look at the sensor used in the S1H, S5 this is based on a Sony IMX410 that has saturation value of 15105 bits or 13.88 stops of dynamic range. The sensor of the GH5s which is a variant of Sony IMX299 has a saturation of 3895 (at 12 bits) or 11.93 stops.
None of the S1H, S5 or GH5s actually reaches the nominal dynamic range that the ADC can provide at sensor level. The sensor used by the GH5 has more than 12 stops dynamic range and achieves 12.3 EV of engineering DR, as the camera has 12 bits ADC it will resolve an inferior number of tones.
So the starting point is 12 or 14 stops of data to be digitally and not analogically compressed into 10 bits coding. Rec709 has a contrast ratio requirement of 1000:1 which is less than 10 stops dynamic range. This has not to be confused with bit depth. With 8 bits depth you can manage 10 stops using gamma compression. If you finish your work in Rec709 the dynamic range will never exceed log2(1000)=9.97 stops. So when you read that rec709 only has 6.5 stops of DR or similar it is flawed as gamma compression squeezes the dynamic range into a smaller bit depth.
When we look at a sensor with almost 14 stops of dynamic range the standard rec709 gamma compression is insufficient to preserve the full dynamic range as it is by default limited to 10 stops. It follows that logically LOG is better suited to larger sensors and this is where it is widely used by all cinema camera manufacturers.
In practical terms the actual photographic dynamic range (this is defined as the dynamic range you would see on a print of 10″ on the long side at arm length), the one you can see with your eyes in an image, is less than the engineering value. The Panasonic S5 in recent tests showed around 11.5 stops while the GH5S is around 10 and the GH5 9.5 stops of dynamic range. Clearly when you look at a step chart the tool will show more than this value but practically you will not see more DR in real terms.
This means that it is possible that a standard gamma encoded video in 10 bits can be adequate in most situations and nothing more is required. There is also a further issue with noise that the log compression and decompression produces. As any conversion that is not lossless the amount of noise increases: this is especially apparent in the shadows. In a recent test performed with a S5 in low light and measured using neat-video assessment V-Log was one of the worst performed in terms of SNR. The test involved shooting a color checker at 67 lux of ambient illumination and reading noise level on the 4 shadows and darks chips. Though this test was carried out at default setting it has to be noted that even increasing the noise reduction in V-LOG does not eliminate the noise in the shadow as this depends on how V-LOG is implemented.
The actual V-Log implementation
How does V-LOG really work? From my analysis I have found that V-Log is not implemented equally across cameras, this is for sure a dependency on the sensor performance and construction. I do not know how a Varicam camera is built but in order to perform the V-Log as described in the document you need a log converter before the signal is converted to digital. In a digital camera the sensor already has an on board ADC (analog to digital converter) and therefore the output is always linear on a bit scale of 12 or 14 bits. This is a fundamental difference and means that the math as illustrated by Panasonic in the V-LOG/V-Gamut documentation cannot actually be implemented in a consumer digital camera that does not have a separate analog log compressor.
I have taken a test shot in V-LOG as well as other standard Photo Styles with my Lumix S5 those are the RAW previews. V-LOG is exactly 2 2/3 stops underexposed on a linear scale all other parameters are identical.
What is happening here? As we have seen ISO values have to be the same between photo styles and refer to 18% middle grey however if you apply a log conversion to a digital signal this results in a very bright image. I do some wide field astrophotography and I use a tool called Siril to extract information from very dark images this helps visualise the effect of a log compression.
The first screenshot is the RAW file as recorded a very dark black and white image as those tools process separately RGB.
The second image shows the same RAW image with a logarithmic operator applied; this gives a very bright image.
Now if you have to keep the same middle grey value exposure has to match that linear image so what Panasonic does is to change the mapping of ISO to gain. Gain is the amplification on the sensor chip and has values typically up to 24-30 dB or 8 to 10 stops. While in a linear image the ISO would be defined as 100 at zero gain (I am simplifying here as actually even at 100 there will be some gain) in a log image zero gain corresponds to a different ISO value. So the mapping of ISO to gain is changed. When you read that the native ISO is 100 in normal mode and 640 in V-LOG this means that for the same gain of 0 dB a standard image looks like ISO 100 and a V-LOG image looks like ISO 640, this is because V-LOG needs less gain to achieve the same exposure as the log operator brightens the image. In practical terms the raw linear data of V-LOG at 640 is identical to an image taken at 100.
This is the reason why when a videographer takes occasional raw photos and leaves the camera in V-LOG the images are underexposed.
The benefit of the LOG implementation is that thanks to log data compression you can store the complete sensor information in a lower bit depth in our case this means going from 14 to 10 bits.
There are however some drawbacks due to the fact that at linear level the image was ‘underexposed‘, I put the terms in italic as exposure only depends on time and aperture of the lens, so in effect is lack of gain for which there is no term.
The first issue is noise in the shadows as those on a linear scale are compacted, as the image is underexposed: a higher amount of noise is present and this is then amplified by the LOG conversion. It is not the case that LOG does not have noise reduction, in fact standard noise reduction expects a linear signal gamma corrected and therefore could not work properly (try setting a high value in V-LOG on a S camera to see the results), the issue is with the underexposure (lack of gain) of the linear signal.
There are also additional side effects due to what is called black level range, I recommend reading on photonstophotos a great website maintained by Bill Claff. When you look at black levels you see that cameras do not really have pure black but have a range. This range results in errors at the lower scale of the exposure; the visible effect is colour bleeding (typically blue) in the shadows when there is underexposure. As V-LOG underexposed in linear terms you will have issues of colour bleeding in the shadows: those have been experienced by several users so far with no explanation.
The other side effect is that the LUT to decompress V-LOG remains in a 10 bit color space which was insufficient to store the complete dynamic range data and this does not change. So the LUT does not fully reverse the log compression in Panasonic case this goes into the V709 CineLike Gamma which is in a Rec709 gamma. As the full signal is not decompressed means that there are likely errors of hue accuracy so V-LOG does not have a better ability to reproduce accurate colors and luminance and this is the reason why even after a LUT is applied it needs to be graded. If you instead decompress V-LOG in a log space like Rec2020 HDR you will see that it does not look washed out at all and colors are much more vibrant as the receiving space has in excess of 20 stops.
Some users overexpose their footage saying they are doing ETTR. Due to the way log is implemented this means it will reach a clipping point sooner and therefore the dynamic range is no longer preserved. This is a possible remedy to reduce the amount of noise in low light however the log compression is not fully reversed by the LUT that is expecting middle grey exposure and therefore color and luminance accuracy errors are guaranteed. If you find yourself regularly overexposing V-LOG you should consider not using it at all.
Shadow Improvement and input referred noise
The Lumix cameras with dula gain sensor have a different behaviour to those without. This is visible in the following two graphs again from Bill Claff excellent website.
The first is the shadow improvement by ISO here you can see that while the GH5/G9 stay flat and are essentially ISO invariant, the GH5S and S5 that have a dual gain circuit have an improvement step when they go from low to high gain. What changes here is due to the way the sensors of the GH5s and S5 are constructed, the back illumination means that when the high gain circuit is active there is a material improvement in the shadows and the camera may even have a lower read noise at this ISO (gain) point than it had before because of this.
Another benefit of dual gain implementation is easier to understand when you look at input referred noise graphs. You can see that as the sensor enters the dual gain zone the input referred noise drops. Input referred noise means the noise that you would need to feed as an input to your circuit to produce the same noise as output. So this means when that step is passed the image will look less noisy. Again you can see that while the GH5 stays relatively flat the GH5s and S5 have a step improvement. Is it is not totally clear what happens in the intermediate zone for the GH5s possibly intermediate digital gain or more noise reduction is applied.
The combination of a certain type of sensor construction and dual conversion gain can be quite useful to improve shadows performance.
Do not confuse dual gain benefit with DR preservation, while dual gain reduces read noise it does not change the fact that the highlights will clip as gain is raised. So the effective PDR reduces in any case and is not preserved. The engineering DR is preserved but that is only useful to a machine and not to our eyes.
Now we are going to look at specific implementation of V-LOG in various camera models.
Front Illuminated 12 bits Sensors
Those are traditional digital cameras for photos and include the GH5, G9 for example. On those cameras you will see that the V-Log exposure shows a higher ISO value of 1 stop compared to other photo styles at identical aperture and shutter speed setting but the actual result is the same in a raw file so your RAW at 400 in VLOG is the same of another photo style at 200. This is a direct contradiction of Panasonic own V-Log model as the meter should read the same in all photo styles so something is going on here. As there is no underexposure it follows that there is no real log compression either. Those cameras are designed in a traditional way so low ISO (gain) is good high ISO (gain) is not. This is visible in the previous graphs.
Those screenshot show how the raw data of an image taken at ISO 250 in standard mode is identical to the V-LOG image and therefore shows how there is not LOG compression at all in the GH5. V-LOGL of the GH5 is therefore just a look and does not have any increase of dynamic range compared to other photo styles.
Is this version of V-LOGL more effective than other photo style with a compressed gamma like CineLikeD? According to Panasonic data CineLikeD has 450% headroom so it is already capable of storing the whole dynamic range that the GH5 can produce (450% means 12.13 stops vs 12.3 theoretical maximum).
In addition noise performance of V-Log is worse because all is doing is acting on shadows and highlights and not really doing any log conversion. The business case for acquiring a V-Log key on those cameras is limited if the objective was to preserve dynamic range as the camera already has this ability with photo styles included with the camera and moreover the V-LOG is not actually anything related to LOG compression otherwise the image would have needed to have less gain and would have shown underexposed. The fact that the camera is shooting at nominal ISO 400 means most likely that some form of noise reduction is active to counter the issue that V-Log itself introduces of noise in the shadows. So in this type of camera V-LOG is only a look and does not accomplish any dynamic range compression.
Back Illuminated 12 bits readout sensors
The cameras that have this technology are the GH5s and the BGH1, the back illumination gives the sensor a better ability to convert light into signal when illumination levels are low. Those cameras have actually a sensor with an 14 bits ADC but this is not used for video.
In order to decompose the procedure I have asked a friend to provide some RAW and Jpeg images in Vlog and normal. You can see that in the GH5s there is 1 stop underexposure and therefore a light form of log compression.
In the GH5s implementation the camera meters zero at the same aperture shutter and ISO in LOG and other photo styles and zero is 50% IRE so actually is 1 stop overexposed.
The procedure for V-Log in this cameras is as follows:
- Meter the scene on middle grey + 1 stop (50%)
- Reduce gain of the image 1 stop behind the scenes (so your 800 is 400 and 5000 is 2500)
- Digital log compression and manipulation
As the underexposure is mild this means the log compression is also mild as it is only recovering 1 stop as the two effect cancels this is actually a balanced setting.
The IMX299 dual gain implementation was a bit messed up in the GH5s but has been corrected in the BGH1 with the values of 160 and 800. It is unclear what is happening to the GH5s and why Panasonic declared 400 and 2500 as the dual gain values as those do not correspond to sensor behaviour, perhaps additional on sensor noise reduction only starts at those values or just wanting to make a marketing statement.
Back Illuminated 14bits Sensors
Here we have the S1H and S5 that have identical sensors and dual gain structure.
The metering behaviour on the S series is the same as the GH5s so all photo styles result in identical metering. The examples were at the beginning of this post so I am not going to repeat them here.
Now the gain reduction is 2 and ⅔ stops which is significant. After this is applied a strong log compression is performed. This means that when you have ISO 640 on the screen the camera is actually at gain equivalent to ISO 100 and when you have 5000 is at 640 resulting in very dark images. In the case of the S5/S1H VLOG does offer additional dynamic range not achievable with other photo styles.
Interestingly V-Log on the S series does achieve decent low light SNR despite the strong negative gain bias. Here we can see that the Log implementation can be effective however other photo styles that do not reduce gain may be a better choice in low light as gain lifts the signal and improves SNR. It is also important to note that the additional DR of VLOG compared to other photo styles is in the highlights so it only shows on scenes with bright areas together with deep darks this was noted on dpreview and other websites.
Should you use V-LOG?
It looks like Panasonic is tweaking the procedure for each sensor or even camera as they go along. The behind the scenes gain reduction is really surprising however it is logical considering the effect of a log compression.
Now we can also see why Panasonic calls the GH5s implementation V-LOGL as the level of log compression is small only 1 stops as opposed to VLOG in the S series where the compression is 2 ⅔ stops. We have also seen that V-LOG, at least in a digital consumer camera with sensor with integrated ADC, has potentially several drawbacks and those are due to the way a camera functions.
Looking at benefits in terms of dynamic range preservation:
- GH5/G9 and front illuminated sensor: None
- GH5s/BGH1 back illuminated MFT: 1 stop
- S5/S1H full frame: 2 ⅔ stops
What we need to consider is that changing the gamma curve can also store additional dynamic range in a standard video container. Dpreview is the only website that has compared the various modes when they reviewed the Panasonic S1H.
A particularly interesting comparison is with the CineLikeD photo style that according to Panasonic can store higher dynamic range and is also not affected by the issues of V-LOG in the shadows or by color accuracy problems due to log compression. The measures of dpreview show that:
- On the GH5s V-LOG has 0.3 stops benefits over CineLikeD
- On the S1H V-LOG has a benefit of 0.7 stops over CineLikeD2
Considering the potential issues of noise and color bleeding in the shadows together with hue accuracy errors due to the approximation of the V-LOG implementation I personally have decided not to use V-LOG at all for standard dynamic range but to use it for HDR footage only as the decompression of V-LOG seems to have limited to no side effects. In normal non HDR situations I have shot several clips with V-LOG but I never felt I could not control the scene to manage with other photo styles and the extra effort for a maximum benefit of 0.7 Ev is not worth my time nor the investment in noise reduction software or the extra grading effort required. As HDR is not very popular I have recently stopped using V-LOG altogether due to lack of support of HDR in browsers for online viewing.
Obviously this is a personal consideration and not a recommendation however I hope this post helps you making the right choices depending on what you shoot.
This write up is based on my analysis on Panasonic V-LOG and does not necessarily mean the implementation of other camera manufacturers is identical however the challenges in a digital camera are similar and I expect the solutions to be similar too.
In December Olympus and Atomos have announced availability of ProRes RAW for Olympus OM-D EM1X and EM1 MKIII and Atomos Ninja V recorder.
This is definitely a step forward for ProRes RAW and also for the micro four thirds standard after the setback of Olympus withdrawal.
There has been very little information on the features and limitation and despite a few videos posted by Atomos and independent creative agencies nobody could really understand how the whole thing worked.
The video from Kauas a Finnish creative agency is here
It contains a lot of very dark scenes and the equipment used for the filming is suboptimal with lenses having a minimum aperture of f/2.8 which is clearly insufficient for the purpose.
I am always surprised when companies do such basic mistakes Olympus could have provided this agency with their f/1.2 primes and the clips would not be so noisy.
Atomos however has made test footage available for testing here.
So with those clips and my final cut pro expertise on HDR and ProRes RAW I got the opportunity to have a go at the sample. A short video illustrates the logic and the dynamics of working with such files:
When you use Olympus generated ProRes RAW files you are able to adjust the ISO/Exposure offset. What This seems to do is to move the black point of the clip without stretching the footage.
Adjustment of color temperature that would have been useful for underwater video is not available. Take into account that the adjustment correct temperature but not white balance as it does not have a tint slides.
As of today as per Apple technical note 211277 only Panasonic and Z CAM offer control of color temperature in post processing. So I would recommend to focus on those brands if you are particularly interested in this capability.
Another limitation of Olympus implementation is the crop factor. ProRes RAW reads individual pixels 1:1 so to the crop factors are:
- C4K 1.26x
- UHD 1.35X
This is because the pixels to 5184 horizontally are cropped to 4096 and 3840. Frame rate is limited to 25/25/30 fps.
Other issues include blanking of the camera EVF and LCD that will only show settings and nothing else and a limitation of internal audio recording to 16 bits. If you need 24 bits you need to plug the microphone into the Ninja V.
Overall I did not get the impression that this footage would really move things forward and right now I believe a 10 bit Log or Cine Gamma implementation that can accomodate things like sharpening and noise reduction will produce similar or even better results.
Will this make you want to buy an Olympus camera for this capability? Almost certainly not when you can buy a Z CAM and have more controls and options.
Will this make some people that already have an Olympus device buy a Ninja V instead of buying another camera altogether? I think some will however the majority of Olympus shooters are still focussed and right now there are not even many options for cages and mounts due to the lack of penetration in the video segment.
Nevertheless this effort should be commended because there are no glitches in the implementation like it happened with Nikon Z series and moves the goal post forward for the MFT segment. I expect Panasonic will have to release ProRes RAW for their new BGH1 that has the potential to be a very interesting device.
On September 30th 2020 the announced deal between Olympus corporation and Japanese Industrial Partners has been signed. Despite all sort of hysteria that is out there on the internet the deal structure is quite simple and there is good information released by Olympus Global on this link.
The Birth of OM Digital Solutions Corporation
The data provided tells us that the current head of the camera business will transfer to the new company that will be headquartered in Tokyo. OM stands for Olympus Maitani however the word Olympus does not feature in clear in the company name perhaps because Olympus corporation did not want to have any ambiguity or misunderstanding going forward on who is Olympus.
So the first indication is that Olympus as camera brand effectively ends when the deal completes on 31st December 2020. What continues is the legacy of Yoshihisa Maitani who originally invented the OM system.
What is included in the deal
This is the official text in the news release.
The agreement applies to Olympus’ global Imaging business, which includes all R&D and manufacturing facilities currently dedicated to its Imaging business. The New Imaging Company will continue to provide high-quality, highly reliable products. Built on a solid foundation, including the Zuiko and OM brands, which are grounded in optics and digital imaging technologies cultivated by Olympus over many years, the New Imaging Company will be appropriately positioned to further pursue new developments. Head of sales and marketing, R&D and designing departments for imaging products will be relocated to the headquarters of the New Imaging Company in Hachioji, Tokyo. Production will continue at the location in Dong Nai province, Vietnam, where imaging products are currently manufactured. The New Imaging Company will continue to provide customer support for the imaging products which have been manufactured and sold by Olympus. Following the transfer of the Imaging business, Olympus will concentrate on Medical and Scientific Solutions, in our ongoing efforts toward making people’s lives healthier, safer and more fulfilling.
So what does this mean? Today Olympus operates as a single company and the imaging business is included in it so they needed to work out what exactly they were selling. From that list this includes:
• The Zuiko and OM (Olympus Maitani) brands
• The R&D department
• The Sales and Marketing Department
• The factory in Vietnam
And Olympus will focus on the medical and scientific business. The new OMD company will take on the after sales responsibility and warranty usually associated with provisions for repairs and returns.
What is NOT included in the deal
What is not included in the transfer is usually anything not specifically mentioned as included so a few considerations here expressing my view on the deal.
The factory in Nagano, Japan is not transferring but according to JIP news release will become a supplier to the new company. This is good for JIP as the factory in Vietnam is less than 3 years old and is in a market where workforce arrangements are more flexible than Japan. The Japanese factory that makes some components for Vietnam and in some cases full lenses will remain as supplier. Olympus also uses Sigma designs for some lenses like the 75mm 1:1.8 and the new 100-400mm 5-6.3 this will continue with OMD.
The Olympus Supply Chain is currently shared with the medical division there are a number of regional and local warehouse that will remain with Olympus together with any stock that is in there. All stock at customers (distributors or resellers) remains the property of those third parties. This is an important implication because it effectively means that OMD starts at zero stock and all the inventory sitting in those warehouses are Olympus corporation problem to clear, we have already seen aggressive promotions on OMD EM1MKII with a free 1.2 Pro prime lens. I bought one of those units and it was manufactured in February 2019 so clearly Olympus corporation distribution network is sitting on years of old stock.
The Olympus commercial network also remains with the seller and this means those entities will continue to trade in the respective markets until such time OMD decides to build their network, they may even decide to use distributors and focus on manufacturing and continue to use Olympus corporation or anyone else as they see fit, what is clear is that OMD is a manufacturing company not distribution. It will remain to be seen how the after sales services will be performed however this could simply mean customers get a replacement product or goods are sent all the way back to Vietnam for fixing or they establish 3rd party service centre to deal with this issue. Panasonic currently does that.
Future Direction of OMD
JIP has mentioned that they will focus more on video and on business customers this is good news as MFT strength really is in those two sectors. Panasonic has exploited that success while Olympus was only sticking to photos and suffering more the smartphone competition. We have seen an announcement that the newer OMD EM1 MKIII E1X will work in ProRes RAW with the Atomos Ninja a first step to get in that territory. Security is a big topic in MFT too as the back illuminated sensor in the GH5s is excellent in low light.
Will JIP review the product range? For sure any situation like this sees a range rationalisation exercise. This means some SKU may be discontinued and some products in future roadmap never go to market. Olympus America website quickly put up a Q&A to that regards the three key answers are here, on the left what it says on the right what I think it means as the writing is not as black and white as you probably would like.
|Question||Official Answer||My Interpretation|
|Will the Olympus brand name continue to be used?||While our official company name will be OM Digital Solutions, you can expect the Olympus brand name to stick around for the foreseeable future. Olympus branded products will continue to be available even after January 1, 2021.||The brands that will transfer are OMD and Zuiko. Olympus supply chain is sitting on a lot of old stock and currently all products being made are still branded Olympus, this will continue like that until the transaction closes. The Olympus brand will continue to be used also because the medical company continues.|
This does not mean that the cameras produced under JIP ownership will be branded Olympus and there are strong indications they will be called OMD as the word Olympus is associated with the medical company in the deal information and is not part of the new company name.
Will the new lenses announced as under development for sales in 2020 still be introduced?
There are no plans to change our product launch plans within 2020. Products that have been announced as under development will be introduced to the market as planned. You can find the most up to date information on product launches by visiting: http://www.getolympus.com
Olympus can only guaranteed what happens when they own the camera business. All things planned for Winter 2020 are going to happen if they happen before 31/12/2020 afterwards they do not know.
What is the future of Micro Four Thirds? Is there any change to the proposed lens roadmap? Will there be a future replacement for my Olympus product?
|We are not able to comment on future product development at this time. For the most up to date information on Olympus products in the Americas, please visit: http://www.getolympus.com||The lens roadmap is an Olympus document what JIP will do with it is not something they know. In fact it is very likely to change if those projects are not going to provide a solid business case. They can also not comment on future cameras nor Micro-Four-Thirds are that is no longer their business|
Also to be noted Micro-Four-Thirds is an open standard the fact that Olympus runs the four-thirds website does not mean anybody has to pay Olympus to make an MFT camera. So there is no issue of licensing rights connected to the MFT standard which only relates to AF and AE this is the reason you see many manual lenses not following the standard or not being listed.
The divestment of Olympus Imaging business is a sad moment for most as it marks officially the end of a legacy for what concerns Olympus corporation. With the performance that the business has had in the last years this was not avoidable. The new ownership will start with a streamlined business, a focus on manufacturing and a clean slate with no debts or old inventory to clear. OMD will also start with some good assets the IBIS and Auto Focus developed by Olympus are very effective and can play well especially if the new focus is on video. New more dynamic businesses like BlackMagic Design and Zcam are having success with the MFT format for video and this is an opportunity that Olympus missed entirely and hopefully the new company will grab. Will this be enough to save the MFT format from extinction? Definitely video is a more profitable segment where there are no smartphones that can really compete for those who want to be really doing a good job because the devices heat up, run out of battery and finally the editing process is still too complex that requires a workstation. I hope the OMD business can fully realise the full potential of MFT and provide a truly hybrid system, something Olympus failed to deliver with their still focussed product line. In the short term, and by this I mean the next two years, not much will change to the user experience, but we need to understand if Micro-Four-Thirds will have enough traction to continue for photography with new models or it becomes a video specialist segment.
I have been shooting MFT underwater since 2014 coming from compacts but I have also owned DSLR cameras for land use. As I initially focussed my underwater imaging on video I adopted Panasonic MFT cameras as they have an edge in terms of video use coming from Panasonic long established video and broadcast legacy.
Recently, just days before the divestiture announcement, I have purchased an Olympus OMD EM1MKII. I have decided on this camera as during lockdown I have been attempting pictures of birds in flight and the autofocus of my Panasonic G9, that I was using since February for land pictures, was not satisfactory.
I have since pondered if it made sense to switch to Olympus also for underwater use and I have considered the pro and cons of this choice compared to Panasonic semi pro models GH5 and G9. I thought of sharing my thinking with you so that if you are considering an MFT system as your next investment for underwater imaging you have a point of reference.
Note: I am only considering the top range Olympus cameras as others do not offer in my opinion any benefit over Panasonic range.
Strengths of OMD System
Olympus OMD Auto Focus system
At time of writing the OMD EM1 series and the EM5 Mark III use an Olympus specific on sensor phase difference detection auto focus system. Note this is different to DSLR phase detection and more similar to Sony hybrid AF system.
I found this system to be very effective with birds in flight once locked on the subject and much faster in locking on subjects as long as the background was clear; with this I mean this system still struggles if there is a busy background to acquire focus. In particular the CAF with tracking is very effective for birds that do not move too fast in the air or are about to take off from a fixed spot. It also effectively tracks at higher frame rate any type of object in motion. This system is superior to Panasonic CAF that is based on motion estimation for shots following the first one of the burst. More specifically it is harder to acquire focus for the first time with Panasonic and the following shots are estimated using a motion prediction algorithm without continuous autofocus. This feature is the one that sets Olympus camera that have phase detection AF apart from Panasonic and from more economic Olympus model such as the OMD EM10 series. Another useful feature is that in review mode it tells you what the camera focussed on.
Other features of OMD system for land use
If you shoot at night another very useful feature is live composition, this is very useful for fireworks or star trails but not effective for real astrophotography for which you need a star tracker or use stacking. Other features that are present in the newer EM1MKIII like starry AF are in my opinion not useful if you know how to focus on stars.
Olympus Housing Costs
As Olympus bodies are smaller and simpler the housing cost compared to Panasonic G and GH series is 30% lower this is material in the scheme of things as Panasonic Pro housing are almost as expensive as an APSC DSLR. This for me is the single most important factor.
Drawbacks of Olympus Cameras
Lack of on Screen Manual Focus Guide
The most evident one for macro shooters is the lack of on screen MF guide as displayed in Panasonic cameras. This very useful for macro but also for astrophotography and video as you know if your camera is at the macro or tele end. For macro underwater photography this means you know if you have hit the minimum working distance and maximum magnification so now you can focus on getting the shot using peaking.
Olympus does not offer a guide but you can pre-set a mode called Pre-MF to minimum distance however I found the on screen peaking to be really poor and ultimately getting less magnification in macro shots.
While Panasonic offers customisable Zebra on screen Olympus only offers a red and blue colouring and the levels only offer limited customisation on a 0-255 8 bits scale. This is OK for checking clipping in absolute but not good for specific exposure targets.
The video modes of the OMD are simply poor and the codec quality just good for your occasional video. The lack of exposure aid and support for manual focus make the whole video experience very very dissatisfactory.
With Panasonic you can set framing guides on the screen for 1:1 5:4 whatever you like without changing the image aspect ratio, this is useful if you want to frame a shot for a specific platform. Olympus lacks this feature entirely.
I can confirm that for underwater and land use I see zero difference in performance between my OMD EM1MKII and the GH5 in the range ISO 200-1600. It is true that the Jpeg settings are different and the color rendering is different for Jpeg however shooing RAW files this becomes irrelevant and I can’t distinguish the shots when the calibrated adobe profiles are used in Lightroom. I believe at some point that Olympus images were sharper however this was due to the images being better in focus when it comes to birds and subjects fast moving.
In terms of JPEG rendering Olympus choices are better for nature and landscapes with more saturated colours, for portraits I prefer the Panasonic rendering. Again those settings are not relevant for RAW files.
In my opinion the most attractive feature of Olympus cameras for underwater photography use is actually the reduced cost and size of the housing. While the extra strength are surely worth for land wildlife photography I truly do not think they make any difference underwater. For sure it would be better to do a field test, this so far has not been possible and if anybody gives me an OMD EM1MKII housing to test I would be very happy, however using the tools made available by Panasonic I do not get almost any shots out of focus and those there are blurred are because I forgot to change a setting on the camera.
For video I cannot recommend the Olympus system at all, Panasonic is way ahead on this on a number of accounts.
In conclusion if you are 100% focus on photography and just take an occasional video the OMD system is light more compact and less expensive. It will not give any edge to your images as the sensors are identical. If you shoot a mix of video and photos the choice is Panasonic. Rest assured none of the AF strength of Olympus will improve your hit rate, if your shots are blurred you are likely using the wrong settings with your camera. The housing costs tho are higher and the rigs are less portable.
In light of Covid-19 many long haul destinations are still closed and may potentially be for a long time so your UW photography gear may collect a good amount of dust…unless you join me for this wonderful trip, on the gulf of Naples, in the marine protected area of Punta Campanella.
Strategically located and fronted by the island of Capri Punta, Campanella offers exhilarating dives with schools of snappers, large groupers, thousands of barracudas as well as wonderful red and white gorgonians. It also offers caves, macro and amazing night dives.
More information on the website of Punta Campanella.
The area is also home to Mimmo Roscigno, a super talented local underwater photographer, who published a book on the fish life found in the area.
On top of that the area offers amazing food and views. Capri, Pompei and Positano are nearby if you fancy a trip during the degassing day.
Accommodation will be at Sea Breeze Residence that is 2 minutes walk from the marina and meals will be at the Paguro restaurant on the jetty, serving fresh food with local produce and fish.
13 September Arrival in Naples. Transfer to Massa Lubrense. Light Lunch. 1530 Mandatory Check Dive. Transfer to Massa Lubrense. Check in at Sea Breeze Residence
14 – 18 September. 8.00 Double Tank dive. Lunch. 1530 Optional afternoon Dive. 20.30 Dinner.
19 September. Degassing day. Free time to explore the area (Capri, Positano, Pompei are nearby)
20 September 6.30 AM departure to Airport. 10:35 Departure to destination
Night Dives €40
Diving Baia Archaeological Park (transfer costs only, dependant on number of participants)
Flights (average price at time of writing is under £100 excluding luggage)
Price €1,350 excluding flights includes 15 litres tanks
Due to the heavy discounts involved, a non refundable €350 deposit is required by 31st of August to block the rooms.
Covid-19 disclaimer: all operations and the hotel adopt regulation as mandated by local authorities. Room rates are based on single occupancy, double occupancy is allowed for member of the same household but will not grant any further discount on the quoted prices. In case of lockdown of the area of additional UK restriction towards Naples the trip will be postponed at no extra charge.
Other Sample Shots from the Trip
Book your place here
There is no doubt that until a Covid-19 vaccine is widespread our travel plans have to adjust to the new conditions. As of today 2 August 2020 most of our favourite destinations are still in the no go list and are not covered by travel insurance.
The latest list of countries and territories published by the British FCO does not include Egypt, Indonesia, Philippines and no countries in South America although it does have many Caribbean destinations.
With the situation evolving fast and the imminent prospect of tighter lock down as we go towards winter many people would not travel long haul anyway to avoid risks of quarantine or possible issues coming back to their home country. So for now, many of us will travel more locally. We have seen lots of new underwater photographs taken locally in British Waters but there is no doubt this is not out of choice and most people would rather be elsewhere.
After the postponement of my Red Sea live-aboard to 2021 I have been invited to the Italian Nauticam days in Italy in the stunning location of Napoli and Sorrento and coast. I am from the same region and all my diving training has been abroad so I am guilty of not having tried the local diving until now. If you don’t want to read the whole article the summary is that the diving is great and combined with the natural beauty of the area, the warmth of the local and the food and drink there is probably no better alternative for diving safe in Covid-19 times in Europe right now. I am sure there are equally stunning places in Liguria and some of the Sicilian or Tuscany locations however the Penisola Sorrentina is very hard to beat when you consider the other elements. Please get in touch if you want to dive the area as I am planning a trip mid September 2020.
The Diving Centre and Location
I used Punta Subaia and Punta Campanella Diving centre two long standing operations on the coast. The first is located in Bacoli north of Naples and the second is in Massa Lubrense just past Sorrento. Bacoli is Naples local beach so gets more local traffic while the other location is more touristic in nature with a good ratio of foreigners: during my stay there were English, German, French, Swiss and Dutch on the dives.
I used a 5mm wetsuit with a 3mm hooded vest and a thermal top under and was fine. Locals dive with a 7/5mm semidry suit.
Diving is done using 7.5 meters RIBs that can take up to 8 divers on a double tank or 12 on a single tank dive. Covid-19 procedures are in place and face masks are not mandatory outdoors in Italy however spacing on the RIB is challenging so you have checks and declarations to fill in. Some people wear face masks on the boat too is entirely up to you.
Journey time to the dive sites is 5 minutes in Baia while in Punta Campanell it can be up to half hour and the scenery is amazing as Capri is just in front of the coast and the landscape is jut breathtaking.
If there is one thing that I did not like is that in the morning there was not a systematic double tank excursion so sometimes the day would finish at 6 pm with only 3 dives done. Crew are very helpful and 15 litres tanks are included at no extra so in all cases I came up because I reached the 1 hour limit still having plenty of air.
I booked a double room with single occupancy at €80 per night B&B 2 minutes walk to the dive centre. Food and drinks with wine runs at €50 or less per day and is glorious!
If you want to have an idea of the critters in the area I would recommend the book Into the Mirror from Mimmo Roscigno ISBN: 9788890966804 is only in Italian but it is a typical coffe table book the images are simply amazing.
For wide angle a good sample is on Punta Campanella Dive Center website, also look for photographers Marco Gargiulo that is local of the area. Other photographers like Franco Banfi have also been here for workshops. So there has been some fame but mostly limited to Italian speaking photographers, this is a shame as the staff speaks English and this is a photo friendly operation.
I went for this trip with a selection of wide angle lenses, I had been told by Pietro Cremone about the underwater archeology park so I packed a rectilinear wide angle in order to avoid distortion.
Dives in Subaia are typically 1 hour long max by law at depth of 5 meters.
The dives have to be done with an expert guide as the mosaics are normally hidden to protect from the agents and the water.
There are also replica statues that are good subjects, the originals are in the Napoli Museum.
There are many villas and it is impossible to cover the grounds in two dives however I had planned to move to the second location so I drove two hours to Massa Lubrense on the night.
Here the diving is about fish and caves. You have a combination of close up subjects and wide angle. I took by zoom fisheye with me so I focussed on wide angle. Sea life includes plenty of Anthias and Damsel, Snappers, large groupers, eagle rays, breams, bass there is a lot of fish as the area has been a protected marine park for more than 20 years now. I was not expecting this abundance, there is also a resident shoal of Barracudas 1000+ strong specimen that is in shallow water at one of the sites. Due to limited processing power I have not yet created a 4K video however I took plenty of shots. The whole album is on flickr. I hereby include some key shots.
I was frankly surprised by the sheer abundance of photo opportunities and I will be always taking my equipment whenever I go back to Italy in the summer. There are so many positives to the location:
- Great photo opportunities
- Well organised dive operation English speaking and photo friendly
- Stunning location also for non divers
- Amazing food
- Fantastic people
- Easy to reach from UK and other EU countries
- Covid-19 procedures in place safe location with prime health system
I am so impressed by the location that I will be back and in fact I am planning a photo trip the week of 14 or 21 September, with the following itinerary:
- Sunday arrival dinner with local photographers to have a taste of the area
- Monday to Friday double tank morning dive, afternoon optional 3rd dive or sightseeing
- Photos of the day debrief after dinner time – optional
- Saturday no dive day local trips optional or travel independently
- Sunday free morning transfer to airport and return
Diving cost is €400 for 5×2 tank dives to be booked in advance through me. For those we will have exclusive use of the boat optional dives in the afternoon non exclusive will be €35 per dive. Accommodation will be typically less than €600 euro for the week in single occupation and plane in the region of £100-150 depending on extras. I can help with accommodation, travel and transfers. You can also rent a car as low as £15 per day this is especially of value if planning to come with partner or family.
Please fill the contact form if interested spaces will be limited to maximum 8 for the trip. I think it will be a long time for anyone to be in tropical waters with the Covid-19 situation, this is an opportunity not to be missed until the water stays warm and enjoy one of the world very best destinations.
On June 24 2020 Olympus corporation has announced they will divest the imaging business and sell the business to be carved-out to JIP (Japanese Industrial Partners).
The full script is here: Memorandum.
Olympus had already delayed the disclosure of financial results for the year ended 31 March 2020, Nikon had already done the same. Clearly companies need to build some accounting provisions for Covid-19 however you would argue that for the year ended on 31st of March the impact of Covid-19 was not substantial as most countries only entered lockdown in March and this is not a prime period for camera sales anyway.
As as an M&A consultant specialising in carve-outs and divestment I have my views on how this will turn out based on my experience but this is not the purpose of this post. What I wanted to do is to perform a short analysis of what I think has gone wrong and what is likely to be the most significant challenge to the newco that will be formed from Olympus imaging business.
The overall situation of the camera market
According to CIPA worldwide sales in units have fallen 87% since 2010.
The overall number of images is actually growing however as of 2017 85% of those pictures are taken on mobile phones.
According to DxOMark and other sources, mobile phones are closing the gap on cameras on a number of aspects. Mobile phones have a lot of development behind and have powerful processors that combined with multiple lenses can produce stunning images.
Most images are consumed on mobile phones and are usually limited to resolutions lower than 4 megapixels or even 1.5 megapixels like Instagram we can understand where this is all going. There is software that allows you to retouch your images directly on your phones one of the reason why instagram is so popular.
As the market for digital camera shrinks camera manufacturers feel the squeeze and this means business will disappear in the process with Covid-19 putting a final stake in what was already a walking dead: Olympus camera business.
First of all Olympus is not the first company going through this, it has already happened to Pentax though this entity was sold at profit in the golden years of digital cameras. Contrary to what most people think Olympus was not originally a camera brand but started out with medical and microscopes in 1919 only in the mid 30s Olympus started making cameras and as of today Olympus is predominantly a B2B enterprise. Olympus has also been at the centre of significant corporate fraud in 2011 and in 2016 was also in the middle of a bribery scandal in US. The last ten years of Olympus corporation history have been plagued by misconduct and therefore nobody would go anywhere near a possible acquisition of Olympus assets at least until now.
As of FY 2020 the imaging division has posted 3 consecutive years of losses with a 10% revenue reduction on FY 2019. Olympus had started the restructuring of their manufacturing operations in 2017 and has cut c45% of their operating losses as result. As a division is still loosing cash and therefore if you had to evaluate the business in terms of EBIT multiplier, a common method for corporate transactions, Olympus Imaging Division is worth nothing and actually it has negative value means it costs cash just to run.
The improvement trajectory and the nature of the distressed business has fallen in the interest of JIP who specialised in acquiring divisions of loss making companies and had already closed deals with Sony, Nec to name a few.
Some Olympus consumers have felt betrayed by this move as Olympus had repeatedly affirmed they were continuing the camera business however the reality is that nobody was likely to go anywhere near it until now and the moment they have a prospective buyers this would most likely proceed as it has happened. From corporate point of view, despite the various scandals, Olympus has been increasing their operating profits as the other divisions are all successful. Removing a loss making divisions will greatly benefit the shareholders and investors and will also allow Olympus to focus on the segments that are successful. If the proposed transaction completes Olympus will effectively exit consumer markets.
So in short Olympus is divesting the imaging division because is loss making, it dilutes shareholder value and they now have a potential buyer, it would be crazy for them not to proceed in consideration of the overall situation of the camera market.
In addition to the compression of the digital camera market, Olympus has also made some questionable choices, and is affected by the overall stagnation of imaging sensors. Olympus does not make their sensors since a long time, previously they bought them from Panasonic, then lately from Sony.
Sony who makes sensors for most brands including Nikon and Panasonic, has not released anything new in the micro four thirds segment since 2017. For this reason we have not seen a rush from Panasonic to release new models and things have been pretty quiet on their front since the G9 camera in 2018 with the rest of the range just aligning to the 20 megapixel sensor.
Olympus instead has released a few models of their flagship OMD range, the EM1X and the EM-1 Mark III, both based on the same sensor technology of the previous OMD EM-1 Mark II released December 2016.
The EM1X specifically aimed at the professional wildlife photographer has a RRP of £2,699, that is the same price of a Nikon D850.
Combined with the Olympus 300mm f/4 prime the EM1X is 2.3 Kg while the D850 with the Nikkor 500mm f/5.6 prime is 2.4 Kg. The Nikon set up ends up being around £6K while the Olympus is £4.7K at RRP. I am not sure this is an appealing proposition considering the significant IQ difference between the two cameras and the pretty identical weight.
Also to consider that at £1,499 you can buy a Nikon D500 that has the same RRP of the new OMD EM-1 MKIII. Now it is possible that Nikon is heavily discounting items and they are going to go bust next, however you can clearly see that competing with those boys may not be a good idea.
The Micro Four Thirds Benefits
The benefits of MFT are listed in the four thirds website here.
There were 3 key items:
- Radical reduction in thickness, size and weight
- An interchangeable lens system designed to handle video in the future
- Continued use of four thirds lenses
Looking at the reduction in size the EM1X is not a good example for this and we can argue the Panasonic G and GH series body are neither. Panasonic had to accommodate item 2 video handling and to do that needed to include an heatsink in their models and this makes the shape of the GH5 large. Then they continued that trend with the G9: both cameras are very similar to an APSC DSLR and larger than Sony A series.
Olympus never cracked the video space, their cameras are limited in that respect while Panasonic has scored significant success and now brands like Zcam and Blackmagic Design use MFT sensor for semipro cinema cameras that perform very well in that segment.
So MFT has not disappointed as a whole, though Olympus seemed to have lost track of the manifesto, and ended up competing in territories where other players are already consolidated. It has to be said they have done that on their own accord as the OMD EM-1 MKII is a very capable camera for who does not want to invest in a large rig and with a battery grip gives you pretty much the same of the EM1X at half the cost or less at today prices.
What happens next?
It is worth looking at what is in scope and what is the envisaged structure of the imaging division after the carve-out.
There is mention that the prestigious brands of OMD and Zuiko will continue with NewCo. In short this means that OMD and Zuiko that really were product lines become brands. This is because Olympus corporation will continue and therefore NewCo cannot be called Olympus cameras or similar. There is no mention of Pen or Tough lines to be in scope of the transaction specifically, this may be simply omitted or those are not in the interest of JIP.
NewCo will also maintain the R&D and manufacturing functions, this is important as otherwise product development would not be possible. We need to understand practically what does this mean in terms of key people and which one will move along and which one will leave.
JIP is currently performing diligence and, subject to confirmation of their assumptions, the deal would be signed at the end of September and then close at the end of 2020. JIP has now access to Olympus data and financials and this will help them confirm their offer, but potentially could also mean they back off if the situation is worse than expected. Olympus has also committed to continue the restructuring already in progress, this is important as that has an impact on the valuation of the business.
Transition Agreements & Rebranding
When the transaction is complete it is possible that there are still dependencies on the seller and therefore transitional service agreements are put in place. It is easy to imagine that those will go ahead for 18 to 24 months and the largest question mark is up to which point the NewCo will be allowed to use the Olympus brand and how they are going to deal with re-branding. Re-branding can be lethal to businesses I do not want to provide a long list but there is an intangible value to the name of a brand and is not simple to switch consumer to the new brand and keep them all, people sometimes, actually most times, go elsewhere and Panasonic will most definitely benefit from this.
The immediate future
Usually when those type of transactions are announced there are all sorts of activities to say that is business as usual, things will get better and products roadmaps and other events are promptly coming out to reassure consumers. The prime reason for that is that consumers may want to switch right now or if they were planning to buy this specific brand they may change their mind. The reality is that carving-out a business is not easy and nobody really knows how things will turn out.
Micro Four Thirds Future
The crisis at Olympus is not a good thing for Micro Four Thirds there is no doubt about it, however this should not be too much of a worry for day to day life. DSLR has been pronounced dead years ago but is still there and MFT is an important step towards mirrorless. It is evident that cameras will eventually move towards mirrorless and the advances of Olympus cameras on autofocus are an important step, today only Sony and Olympus have decent autofocus on mirrorless. Canon and Nikon are playing catch up but their pro equipment is still DSLR.
The market is shrinking and Olympus is not going to be the last company to struggle, who will survive is not necessarily linked to who has the best product, but to those who can manage the market situation and can align to consumer needs.