91.1 F
San Fernando
Thursday, Mar 28, 2024

Technicolor Emerging as Leader in Rollout of Digital

Like many other forms of entertainment, movies are undergoing a digital transformation and venerable Camarillo-based media firm Technicolor and its French parent company, Thomson, are determined to capitalize on this latest technological evolution. Accordingly, the 90-year old firm recently announced that its services division has reached digital cinema usage agreements with DreamWorks, Sony Pictures, Universal Pictures and Warner Bros. in an effort to accelerate the deployment of these digital cinema systems. In addition, the company has announced that it is in late stage negotiations with 20th Century Fox, New Line Cinema, and The Weinstein Company, and expects these studios to be a part of the initial deployment. The deal concerns the replacement of old-line 35 mm projectors with digital replacements that allow for greater flexibility of distributions and allow for the viewing of movies in 3-D. “We’ve been involved in the digital cinema arena for six years and now it’s at the stage where it’s about to grow massively,” Joe Berchtold, the president of Technicolor’s electronic content distribution services department, said. “I believe that we’re going to see an explosion in the breadth of activity enabled by the digitalization of content, ranging from new tools and applications to new ways of distributing content. Digital expands the options. In a community as creative as this, they’re going to find ways to leverage that.” In addition to the deals with the movie studios, Technicolor is also in ongoing discussions with regional and national exhibition chains to finalize plans to begin the deployment of digital cinema installations in early 2006. These digital cinema projectors don’t come cheap, as exhibition houses will additionally need an equipment server and a network. The total package is expected to run between $90,000 and $120,000 per screen. However, Berchtold asserts that the studios will pick up most of the costs associated with the transition. In addition to providing equipment and installation for theaters making the move to digital, Technicolor also plans to interact as a middle-man of sorts between theater owners and the studios. “We’ll be building our business to provide the content distribution to all of these digital clients,” Berchtold said. “When Warner Bros. has a Harry Potter-type film they’ll need to have someone prepare the content, send it via satellite to the theater, and make sure that it arrives.” Berchtold maintained that one of the main reasons why the film studios opted to go along with Technicolor’s plan had to do with the company’s reputation in the industry. “We’re not some startup and we’re not just focused on digital. We’re focused on helping the studios and exhibitors maximize their business, no matter what form it is,” Berchtold said. “We’re going to spend a lot of money to prove the commercial viability of the format. We don’t play games with our customers.” Image Deal a No-Go It looks like for now Chatsworth-based entertainment firm, Image Entertainment Inc., will not be sold to Santa Monica-based independent film studio, Lion’s Gate Entertainment. The news was announced when the special committee selected from Image’s Board of Directors unanimously rejected a revised proposal from Lion’s Gate, on the ground that it was substantially below what the special committee would find acceptable for stockholders. Yet in spite of this decision, senior analyst Ali Mogharabi of B. Riley & Company believes that the deal isn’t completely moribund just yet. “I wouldn’t say the deal is completely dead, because Lion’s Gate still owns about 19 percent of Image and sooner or later they’re going to have to make a decision on them,” Mogharabi said. “In terms of Image’s future, they’ll still be successful in getting the independent content providers to make agreements with them, and the new guidance they’ve provided has been in line with what we’ve expected.” In the meantime, Image has announced that it has adopted a stockholders rights plan. The rights plan is similar to plans adopted by many other companies to protect the interests of stockholders by discouraging coercive, unfair or abusive takeover tactics that do not offer fair value to all stakeholders. But despite Image’s feeling that its worth was not properly evaluated, Mogharabi pointed out that according to B. Riley’s calculations, the Lion’s Gate offer was reasonable. “Based on where we value Image right now, it was not too low. Our price target is $4.20 a share,” Mogharabi said. Warner Lays Off 250-300 In a move that affected employees at all divisions of the company, Warner Bros. Entertainment slashed between 250 and 300 jobs at its Burbank studio. The moves come after a summer in which Warner Bros. was the top performing studio in Hollywood, delivering blockbusters such as “Batman Begins,” “Charlie and the Chocolate Factory,” and “The Dukes of Hazzard.” Even Warner Bros.’ “specialty film arm, Warner Independent Pictures delivered one of the biggest “indie” smashes with “The March of the Penguins.” Due to the rather nebulous statements given to members of the press, no one is certain of the reasons behind the decision. Though many have pointed to the fact that the company is currently under attack from dissident shareholder Carl Icahn, who has blasted the company’s “bloated cost structure.” However, James C. Goss, an analyst for Barrington Research believes that Time Warner’s troubles at the top have little to do with the layoffs in Burbank. “From a conference call that the company had yesterday, it didn’t sound like this was a way to drive up earnings,” Goss said. “It sounded like it was more in the context of how any business would be done on a continuing basis. There’s nothing faulty with the business and I don’t think that a certain number of layoffs in any division would be enough to make the needle move.” Aptuit Acquires InfoPro Solutions Agoura Hills-based InfoPro Solutions has been acquired by a Greenwich, Conn.-based drug development tools company, Aptuit. Aptuit has publicly stated that it acquired InfoPro in order to create a multi-customer, multi-site platform for tracking drug development projects. Financial terms were not disclosed, however the deal is expected to close in late 2005 or early 2006. Aptuit will acquire InfoPro Solutions’ facilities in Agoura, Westford, Mass., Bangalore, India and Frankfurt, Germany. The company said it will retain InfoPro Solutions’ 120 employees. InfoPro Solutions provides information systems for the drug development market. Staff reporter Jeff Weiss can be reached at (818) 316-3126 or at [email protected].

Featured Articles

Related Articles