M+E Daily

Paramount Renews With Technicolor; Business Impacted By Cost-Cutting

As part of a new multi-year agreement, Thomson’s Technicolor unit will continue to provide Paramount Home Entertainment with services such as mastering, replication, packaging, distribution and returns processing, as well as freight management services in North America, for both DVD and Blu-ray.

Paramount, which had been rumored to be exploring a merger of back-office operations with a rival studio, tells the Wall Street Journal that the new Technicolor pact will save the studio “tens of millions of dollars annually.”

The cost-cutting climate in Hollywood has significantly impacted Technicolor’s business. DVD replication volumes at the company are off by 22.5% from 2008, standing at 745 million units for the first nine months of 2009. In its third-quarter earnings report, Thomson attributes the market weakness to “lower than expected performance of major studios’ new release and back catalog volumes,” along with “a sharp decline of kiosk and game volumes.”