Warner Home Video Ends Cinram DVD Supply Deal
Cinram’s long-running, exclusive deal with Warner Home Video (WHV) for DVD manufacturing and distribution services is coming to an abrupt end this summer.
The Toronto-based disc replicator announced Feb. 1 that the studio is exercising its option to terminate its service agreements on July 31. The loss, Cinram says, will directly impact its operations in North America, Mexico, the UK, France, Germany and Spain.
Cinram acquired WHV parent Time Warner’s DVD and CD manufacturing and distribution businesses in 2003, in a $1.15 billion deal that included an exclusive supply contract for WHV’s DVD needs in North America and Europe.
Cinram says that the WHV relationship represented about 28% of the company’s 2009 revenues. Company CEO Steve Brown — who joined Cinram last June, amidst an industry-wide DVD sales decline — told The Wall Street Journal that the loss of the business is “a bump in the road” that will prompt Cinram to seek new ways to cut costs as well as a new studio customer.
Brown added in a statement that Cinram is working with the WHV “to ensure an orderly transition of the services.”
There is no word yet, however, on which company or companies Warner Home Video will now turn to for DVD manufacturing and distribution.
Time Warner plans to announce its full-year 2009 results on Feb. 3. For the first nine months of 2009 (ended Sept. 30), revenues from home video and electronic delivery of Warner’s theatrical products were down 26%, to $1.6 billion.