By
David Hancock

Technicolor is having a busy summer with a series of acquisitions and deals that continue to shape the company's structure as it repositions for a digital media landscape. In one of the key deals, Technicolor and Deluxe further share out the declining film print business with Technicolor subcontracting its 35mm bulk release printing business to Deluxe in North America, and Deluxe subcontracting its 35mm print distribution business in the U.S. to Technicolor. On top of this, Deluxe will subcontract its 35mm/16mm colour negative processing business to Technicolor in London. These measures are now part of an established pattern, even if this takes it significantly further than before. In May 2010, in an industry first, Deluxe and Technicolor opted to merge their print replication and distribution operations in Vancouver; the new venture being housed in Deluxe's existing site in the city. In December 2010, Technicolor shut its 35mm release printing plant in Los Angeles due to the rise of digital cinema and loss of a significant volume contract to rival Deluxe. There will also be some exchange of business in Europe and Asia. Outside these deals, companies assure market that they will continue to compete. As mentioned before in IHS Screen Digest analysis, 35mm film printing is now a question of managing decline as digital cinema distribution takes hold. This is the area where investment and future competition lies. In a few countries, such as Korea and UK, over 80 per cent of all films are released in a digital format, although this is not yet the norm. Most countries see Hollywood, 3D and local major titles being released in digital but this is evolving rapidly as the wider 2D rollout spreads around the world. At end June 2011, there are over 47,000 d-screens around the world or 40 per cent of the world's modern screens.

In the USA, Technicolor is acquiring the physical and electronic delivery assets of third-party integrator and digital cinema services and content provider Cinedigm, including at least 300 satellite roof rights and hard-drive replication equipment. This will grow Technicolor's satellite footprint in North America to about 1,100 locations or over 90 per cent of all satellite-equipped cinema sites in the region. According to company, Technicolor controls 58 per cent of North American market for mastering and digital cinema delivery. Cinedigm were third behind Technicolor and Deluxe in digital delivery of feature films and found the business too capital intensive. Disposal of this non-core business frees up cash and management time for growth areas of alternative content and operational in-cinema software for Cinedigm. Deal is expected to close in September. Technicolor will also develop software with Cinedigm, as a strategic software design partner,  beginning with Technicolor licensing Cinedigm's digital distribution software, including possibility of marketing Cinedigm software to Technicolor clients. In addition, Technicolor will be Cinedigm's preferred content servicing partner for post-production to distribution services, including satellite distribution of alternative content by Cinedigm.

On the post-production side, Technicolor has acquired post-production assets of Laser Pacific, itself sold by Kodak to HIG Capital in spring 2010. Laser Pacific is an established post-production outfit specialising in feature and TV post-production, restoration and VFX. It will be branded as Technicolor. Technicolor is also selling its New York assets to PostWorks, a digital image and sound post-production and facilities company, while retaining an agreement to share these resources under joint name Technicolor/PostWorks. This is second venture between companies who launched a joint film lab services facility, New York Film Lab in 2010.

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