Move to digital sparks new partnership between Technicolor and Deluxe

Hollywood's rapid march to digital technology is bringing arch rivals Deluxe Entertainment Services Group and Technicolor Inc. together in an unusual partnership.

The companies announced today that Technicolor will subcontract its 35mm film print business in North America to Deluxe, the postproduction company owned by MacAndrews & Forbes Holdings Inc. In turn,  Deluxe will farm out its 35mm print distribution business to Technicolor, the French-owned company that is the world's largest maker of film prints.

Financial terms were not disclosed.

As a result of the move, Technicolor will close its film lab in Mirabel, Canada, outside of Montreal, eliminating 178 jobs. Earlier this year, Technicolor announced that it was shutting its lab at Universal Studios after losing its contract with Universal Studios to Deluxe.

Technicolor is opening a smaller, 40,000-square-foot-lab in Glendale that will release 60-to-70mm film prints for Imax and other big-screen theaters.

The partnership with Deluxe reflects the rapidly  reduced demand for film prints as more movies and TV shows are released digitally. Nearly half of the 42,000 screens in the U.S. have been converted from film to digital technology.

"Today's agreement with Technicolor is the result of significant changes in our industry enabled by new digital technologies,'' said Cyril Drabinsky, president and chief executive of Deluxe Entertainment Group. "This agreement will help maintain a high consistency of service for our customers through the remaining life of film.''

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Deluxe Entertainment buys 3-D conversion company

Deluxe Entertainment Services Group Inc., the post-production house controlled by billionaire Ronald Perelman, continues to bulk up.

The Hollywood-based company said Wednesday it had acquired StereoD, a Burbank business that specializes in the 3-D conversion of such movies as "Thor," "The Green Hornet" and the upcoming "Captain America" from Marvel Studios.

Financial terms were not disclosed.

"StereoD has grown rapidly in a year and a half, not only because of its proprietary VDX technology but its proven ability to service its clients," said Cyril Drabinsky, president and chief executive of Deluxe. "They are a perfect fit for Deluxe, both for StereoD's traditional theatrical content business and in new areas such as 3D Blu-ray, 3D TV channels, 3D commercials and 3D streaming content.”  

The deal is the latest sign of consolidation in Hollywood's post-production business. In November, Deluxe, in a move to offer a wider range of services, announced a deal to acquire the bulk of Ascent Media Group, the Santa Monica-based post-production company controlled by cable pioneer John Malone, for $68 million.

Hollywood's rush to convert dozens of films to 3-D has been a boon to companies such as StereoD, which employs 250 people. The company's current president, William Sherak, will continue to run the business and will report to Drabinsky.

Deluxe is the world's largest processor of film and Blu-ray discs and also provides a range of digital media services to the film and TV industries. It has post-production facilities in North America, Europe and Australia.

Photo: Ronald Perelman. Credit: Kathy Willens / Associated Press

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Deluxe buys most of production services company Ascent Media

In a further sign of consolidation of Hollywood's post-production business, Deluxe Entertainment Services Group said Wednesday it has reached an agreement to acquire the bulk of Ascent Media Group, the Santa Monica-based postproduction company, for $68 million.

A subsidiary of billionaire investor Ron Perelman's MacAndrews & Forbes Holdings Inc., Hollywood-based Deluxe is the world's largest processor of film and Blu-ray authoring services. Ascent, which provides services that help studios and distributors store, manage and distribute content, is part of Englewood, Colo.-based Ascent Media Corp., and controlled by cable pioneer John Malone.

The acquisition includes Ascent's facilities in Burbank, Hollywoood and Santa Monica that employ 1,800, as well as operations in the U.K.

Ascent said it would retain its content distribution business, which includes providing satellite transmission services to broadcasters and networks.

Deluxe, with operations in North America, Europe and Australia, wanted to buy Ascent in order to offer a wider range of services, people familiar with the deal said. Deluxe mostly caters to the feature film industry, and Ascent is known for its work in television and commercials. The company's services include providing color correction and editing and visual effects on a variety of television shows, such as "House" and "Big Love."

Ascent Media was formely part of Discovery Communications until it was spun off as a separate company in 2008. Its holding company posted a net loss of $6.2 million on revenue of $204 million for the six months ending June 30, narrowed from a net loss of $13.7 million on revenue of $230 million for the same period a year earlier.

Ascent Media Chief Executive William Fitzgerald attributed the losses in its most recent statement to "uncertainty about the timing and pace of economic recovery that has led to ongoing volatility in the media marketplace."

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