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After an unexpected announcement by pro cinema camera maker RED and Nikon that Nikon was acquiring RED, industry watchers speculated about the price tag.
Now, we know just how much Nikon had to fork over from its piggy bank to buy RED earlier in 2024.
According to the Japanese camera maker’s 2023-2024 financial statements, Nikon paid a surprisingly modest sum of roughly $85 million Nikon Snapped Up Cinema Camera-Maker RED for only $85 Million or 13.167 billion yen.
RED’s 2023 revenue was supposedly just over $159 million, but as a private company at the time, it didn’t have to disclose its financials, so that figure could be guesswork.
However, something close to it would make sense. If so, $85 million seems like an unusually low purchase price.
On the other hand, revenue isn’t the same as earnings and RED may have had zero of the latter. Again, as a private company, it didn’t have to reveal that publicly either.
Either way, Nikon executives previously explained to the website PetaPixel that their company started working on literally owning RED after it was first sued by the smaller company for patent infringement.
The lawsuit by RED was filed because a compressed RAW feature used in Nikon’s Z9 flagship photo/video camera was alleged to infringe on a RED patent.
Nikon, instead of settling, fought back vigorously and it was during this process that it decided it might be easier to simply buy RED outright from its owners instead of spending on court costs and potential licensing fees, or damage claims.
It was a bold and somewhat unusual move for a company in the camera manufacturing world, but it did have some sound reasoning to it: After all, though buying RED might cost more than losing the lawsuit, it also has the potential for distinct long-term value.
As Nikon’s own Executive VP and General Manager of the company’s Imaging Business Unit elaborated to Petapixel in April,
“Due to the lawsuit, we had an opportunity to understand and learn more about RED itself and RED’s history, and we had the opportunity to speak with the founder, Jim. We also recognized that the professional digital cinema market is huge and covers many areas, and since the Z 8 and Z 9 launches we see a growing market in the creator area, ”
Hiroyuki also explained that Nikon’s lack of knowledge about RED’s market made its people realize that moving into that market could take a long time.
Thus, after speaking to RED’s founder, Nikon executives realized that they could hurry that process along with an outright acquisition of RED’s property, technology and expertise, while also helping RED expand its plans under new ownership.
After these revelations about motives and reasoning, Nikon however didn’t explain how much it paid for RED.
Nonetheless, since it’s a publicly traded company, its financial filings would eventually have to reveal that specific nugget of information.
This is exactly what happened after their 2023-2024 financial filings were made published, showing that buying RED completely cost the equivalent of $85 million USD.
Nikon argued to its shareholders that its reasons for buying RED included the company’s innovative and extremely well-regarded pro cinema cameras and associated technology.
Specifically,
“RED’s contributions to the film industry have not only earned it an Academy Award but have also made it the camera of choice for numerous Hollywood productions, celebrated by directors and cinematographers worldwide for its commitment to innovation and image quality optimized for the highest levels of filmmaking and video production.”
The body of RED’s very popular and highly regarded Dragon 6K cameras.
The larger company further stated in its note to shareholders that its acquisition of RED would benefit Nikon through the particular strengths of both companies.
Nikon claims that its expertise in product development, image processing and optical technology could combine with RED’s expertise in making valued cinema cameras and RAW compression technology to help develop “distinctive products”.
Essentially, the very compression technology that started a lawsuit became one of the direct factors in causing a merger.
Nikon hasn’t made any statements about specific products it plans to release now that it owns RED, but it has hinted at developing its own cinema cameras.
These will probably take a while to develop though, so for now, don’t expect a new RED-inspired cinema camera to emerge any week now.
As for RED, it continues to sell and offer support for its line of existing cinema cameras and its website is still fully active as far as we can tell. Meanwhile, RED founder James Jannard continues to work on RED as a close advisor to Nikon.
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