Technicolor to Finance Digital Film Systems

Technicolor Inc. today is expected to announce deals with four studios to help pay for thousands of digital cinema systems, increasing the momentum toward an age of theaters without film.

Technicolor’s effort is similar to a competing program backed by Christie Digital Systems and Access Integrated Technologies Inc., or AccessIT. Both aim to equip the nation’s 36,000 movie screens with digital distribution and projection systems -- an expensive process that could take a decade or longer.

Studios and exhibitors hope digital projection will help draw moviegoers back to theaters with crisp pictures that don’t fade or scratch. Digital distribution is also expected to save studios millions of dollars spent to make and distribute film prints.

Technicolor, a Camarillo-based film services provider and subsidiary of France’s Thomson, has reached nonexclusive agreements with DreamWorks, Sony Pictures Entertainment, Universal and Warner Bros. that call for the studios to distribute movies digitally throughout the U.S. and Canada. Participating studios would pay a “virtual print fee” for screens equipped with Technicolor-designed digital systems starting as early as next year.

The company, which also is in talks with 20th Century Fox, New Line Cinema and Weinstein Co., said it intended to roll out at least 15,000 digitally equipped screens over the next decade.

“We’ve been developing the software and operating capabilities to make sure these systems are performing at the level required by studios and exhibitors,” said Joe Berchtold, a Technicolor president.

Separately, the coalition led by AccessIT, a software firm, and Christie, a projector maker, said last week that it hoped to install the first 150 digital projection systems under a joint, 4,000-screen rollout plan by Dec. 31. The companies have signed distribution agreements with Disney, Fox and Universal.

“We expect all the studios that are mentioned [in the Technicolor announcement] to be part of our plans as well,” said Bud Mayo, chief executive of AccessIT.

Berchtold declined to disclose the fees Technicolor plans to charge studios and said his company had not determined how it would finance its rollout of digital systems, which cost approximately $90,000 to $100,000 per screen. He said Technicolor planned to begin installing systems that would be part of a test on 200 to 250 screens early next year that is expected to last three to six months “to prove these actually work in a commercial environment.”

“This is a significant development in the evolution to digital distribution of our motion pictures,” said Jeff Blake, vice chairman of Sony Pictures Entertainment and chairman of worldwide marketing and distribution for Columbia Tri-Star Motion Picture Group.