My thoughts on the Nikon acquisition of RED

Nikon's buying RED seems to have created quite a stir on photography platforms. I've observed quite a few influencers' take on it, and it seems to me that many of them are making points which are pretty wide of the mark. I thought I'd put forward my views on it.

Business sense

I think that this makes a load of sense. Nikon know it needs to diversify from the stills photography business. To date it's been leveraging its optical expertise to make a play in industrial metrology and smart manufacturing, but this purchase makes a load of sense for its core imaging business. All of Nikon's major competitors in the imaging business (Canon, Sony, Panasonic and Fujifilm) have a strong presence in one way or another in the cinema and video markets, whilst Nikon did not. Now it does. It still has a bit of a gap in the videography market, but it should be easier to expand into that from two ends (stills and cinema) rather than just from below. For RED it must have felt vulnerable as by far the smallest player in its market, and I'm this seems to be a friendly takeover, which will preserve some of RED's corporate culture, which is far better than being absorbed by a competitor. As part of Nikon, which is itself part of the Mitsubishi group, they are pretty much immune from takeover unless the Mitsubishi banks decide they want to dispose of the Nikon heritage - which is unlikely. It also gives RED access to one of the world's finest optical design and manufacturing facilities. Their producte so far have been about electronics, now that have optics capability too.

Technology

There's a lot of talk going around to the effect of 'now Nikon has a global shutter sensor', which really doesn't take into account what are global shutter sensors and what are the capabilities of the two companies. GS sensors are being treated as some kind of novel technological magic, when in fact they have been around for a long time and are widely used in imaging applications suited to them. Those applications don't much include stills photography. A GS shutter essentially requires building a second pixel into each pixel, with a resultant loss in full-well, QE and SNR. The sensor in the A9 III performs much like the 10 year old sensor in the A7III except that the base ISO has had to be raised to 250 to cater for the low full-well. So a GS sensor is really only applicable in a specialist stills camera, which is what the A9III is. If Nikon wants to build a GS sensor into a new camera, it is not hard for it to get one. It's a mature technology. Sony semiconductor has a whole range of them (called 'Pregius') which range from MF down to 1/3.1, with 5 different pixel sizes. Whilst it's unlikely that any of these would be suitable for a Nikon stills camera straight away (apart from maybe the IMX342 sensor with 31MP on APS-C - how about a GS Z90?) it wouldn't be a large development for a Sony Semi customer to commission a FF variant. The largest pixel size is 5.8 microns, which gives 24MP on FF. Odd that. Sony Imaging seems to have done just this. Whilst this exact product might be exclusive to them, there's nothing to stop a company such as Nikon commissioning their own version. Or, it's quite possible that this will be offered to other companies. It's unlikely that the GS stills market would be large enough for Sony Imaging to justify the investment for their line only. Or it would be a suitable project for Nikon's own sensor design department, which still exists. Or it could do what RED apparently did, which is to commission a design from Forza Silicon to be fabbed at a foundry (likely ST). What it can't do is use any of the RED sensors. They are the wrong shape and price and don't integrate with Nikon electronics. RED seems not to have any sensor technology of its own to contribute (it's all bought in). But interestingly, Nikon does. Three years ago it announced its own stacked sensor architecture (www.nikon.com/company/news/2021/0303_cmos_01.html) which essentially does anything that a GS does without the performance compromise. The problem is, I guess, whether it can be production engineered to a price that would allow it to go into Nikon's still cameras. It's possible that Nikon intends it for its own industrial vision products, but high end cinema cameras would be another possible application. And now Nikon has a high end cinema camera division.
The other technological issue is video codecs, especially of the raw variety. Building REDs codecs into Nikon cameras would provide some additional market credibility.

Company culture

This couldn't be more different, on the one hand an ancient Japanese company, steeped in its own stepwise way of doing things, on the other a California startup. If Nikon can capture some of the thinking and agility of RED then it might find itself able to develop innovative products more quickly. As for RED, they could likely benefit from the manufacturing and engineering proficiency of a company like Nikon. Finally, the patent battle. I've read the RED raw patents - I don't think they are very strong. I suspect that the outcome of the legal case reflects that. Had Nikon carried through and broken the patents, then the way would have been open for any of their competitors to follow through the breach that they made. The agreement reached, that Nikon could use the patents but didn't render them null, paved the way for this acquisition. The patents are still in place. Whilst I think they are weak, they still have an effect, since any company wanting to provide in-camera raw has to weigh the business advantage against the legal costs of the necessary case - which now involves a company with more resources for more and better lawyers. So this sets up Nikon (and RED) to develop a range of cameras, hybrid, video and cinema with compatible raw capability across the board. Could be quite a powerful position.

It's a commercial decision for them. I suspect that RED branding is well enough respected in its marketplace to continue with it - in particular RED is known as a company that understands cinematography, whilst Nikon is not. Possibly what will happen is that the cinema camera line will continue as RED, that the stills line will continue as Nikon and there will be a video line developed in between either dual branded or available in different branded options - kind of like Panasonics and Leicas - basically the same underlying camera with different emphasis and branding.

Remember that unit price of cinema lenses is way higher than stills lenses. For instance a Cooke SP3 50mm T2.4 sells for £3.2k, exclusive of tax. That's for a pretty simple 50mm f/2 prime. A Zeiss Nano Prime 50mm T1.5 is £3.5k. Canon has a cinema 50mm T1.3 for £5.7k (very similar optically to the old EF 50/1.2). So, it's quite reasonable for Nikon to develop a range of cinema lenses and expect to make a profit on smaller volumes, simply because the sales price is a lot higher. I would expect them to use essentially the same optical designs as some of their existing lenses, but in mounts more purposely designed for cinematography than are the stills lenses. It's a specialist market and Nikon doesn't have anything there yet and probably wouldn't get into the market without RED. With RED they can build in particular features which work with RED cameras, such as wireless follow focus with monitor - which gives them a route into that market.

It is (my own daughter dreams of RED camera, currently she has got only BlackMagic...) I too think Nikon will not close RED brand down.

Usually I hate when companies merge, this often means just killing competition. Maybe this case is different, at least both parties seem to win something of this deal.

Kind of Similar to how Ricoh uses the Pentax brand, except that RED operates in an expanding marketplace rather than a contracting one (see, for instance www.fortunebusinessinsights.com/industry-reports/cinema-camera-market-100387). I think that this partnership is pretty complementary, in that both companies bring something that the other does not have, and needs.
Also, I'm sure it would not have gone ahead without the approval and backing of the Mitsubishi banking system, which does suggest that there is a commitment to see it through.