Rich Stroffolino

Making Sense of Nikon Buying RED

With Nikon buying the cinema camera maker RED, I was trying to research what this deal would mean. Certainly it gives Nikon access to a new market. While professional DSLRs/mirrorless cameras have had a place in movie production for decades, they can’t be rigged out like a proper cinema camera. It’s a market that’s projected to grow long term, even if relatively small.

I was trying to get a picture of what this market looks like. Looking at Canon, Fuji, and Sony, they don’t break out cinema cameras from their respective imaging segment revenue. So we have to assume their standard mirrorless offerings makes up the vast majority of revenue (otherwise they’d crow about it). Arri, Blackmagic, and RED are all private, so we don’t have a sense of how big those businesses are.

The analyst report I linked above is paywalled, but it lists the market at around $300 million in 2022. Nikon’s imaging unit generated about $500 million in revenue in its latest earnings report. So this isn’t going to move the needle too much for their bottom line. But given that I expect the margins on RED cinema cameras are significant, it plays well with the overall strategy. Nikon noted its imaging unit was the only part of its business that saw increasing operating profit on the year, due to the shift to higher end cameras. In that vein, cinema cameras make sense to pad those profits.

The acquisition also helps the optics of where Nikon is as a brand. While certainly respected, they’ve definitely been late to the mirrorless camera video revolution, where Sony and Canon dominate. Getting a respected brand like RED aboard, with devotees like MKBHD helps change that perception.