Film Process Business Booms : Colorizing is Energizing S.D. Lab

San Diego County Business Editor

The debate over the aesthetic merits of colorizing old black-and-white movies may still rage, but the economics of the process have been plain for some time. Fueled by heavy demand from television programmers and videocassette buyers, the film colorization field is growing fast and likely to get much larger in the years to come.

American Film Technologies, one of the four North American companies now doing film colorization, is staffing up at its principal laboratory in San Diego. In operation less than one year, employment at the AFT lab in Sorrento Valley has grown to 160 workers from 36 last June. That total could reach 200 by this summer, Executive Vice President Barry Sandrew said.

AFT workers labor around the clock in three shifts at computer consoles assigning different color values to 256 shades of gray from black-and-white movie frames. With 200,000 frames to be colorized in a typical 100-minute movie, the painstaking process takes from four to eight weeks per film to complete and costs between $300,000 and $500,000.

Headquartered in Wayne, Pa., AFT finished its first colorization job last Thanksgiving when it delivered "Bells of St. Mary's," the 1945 movie starring Bing Crosby and Ingrid Bergman, to Republic Pictures. The film was a big hit and, as recently as the week ended Jan. 3, ranked ninth among showings of syndicated (non-network) television movies and programs, Sandrew said.

The company will deliver its second colorized title, the 1945 epic "Sands of Iwo Jima" starring John Wayne, to Republic within a month. The company is receiving a $615,000 fee for colorizing the two movies, but, in its initial public offering prospectus, acknowledged taking a $205,000 loss on the deal in order to demonstrate its technology to the industry.

Deal for 'Boom Town'

AFT has signed a separate deal with Turner Broadcasting to colorize "Boom Town," the 1940 film starring Clark Gable, for airing in April over Turner's WTBS super station. "Boom Town" was one of the many films Turner acquired in 1985 as part of the MGM film library.

If Republic and Turner are happy with AFT's work, the company will see a lot more business come its way, AFT Chairman George R. Jensen said. Republic could order up to 10 colorized films and Turner up to 46. The company is gearing up its production capacity to handle as many as 10 colorizations per month, up from one per month currently.

Since the first colorized movie, "Miracle on 34th Street," was released in late 1984, more than 50 colorized movies have been released. Another 50 will be released this year alone by AFT and its three competitors, Color Systems Technology of Marina del Rey, and Colorization Inc. and Tintoretto, both of Toronto.

Jensen said the colorization market is big enough to support an additional 12 companies. To illustrate, he said there are 17,000 feature movies and 22,000 television episodes in black and white and that colorizing just 10% of those films and programs represented a $500 million market.

The popularity of the colorized movies have illustrated what for many is the sad truth that most black-and-white movies, even classics, hold little box office appeal for television viewers.

Little Appeal for VCR Buyers

"I love black-and-white movies but unfortunately the majority of Americans don't," said C. Marks Hinton, a partner with Johnson, Rice & Co. investment bankers of New Orleans. "Most of the black-and-white movies on TV show at 2 o'clock in the morning, a time it's hard to sell ads for."

Generally speaking, black-and-white movies hold little appeal for videocassette buyers. For example, only 5,000 black-and-white cassettes of the Frank Capra classic, "It's a Wonderful Life," were sold over the first five years it was available at video outlets. But since cassettes of the colorized version were introduced in 1985 at three times the price, 80,000 copies have been sold, Jensen said.

Wilson Markle, president of Colorization Inc., a firm that has delivered 19 colorized films including "Topper" to its half owner, Hal Roach Studios, said the proof of colorization's artistic value is that "audiences are buying it."

"There are no aesthetics in the film industry other than the business of an audience buying it and liking it and broadcasters programming it and being able to sell time on it," Markle said.

Jensen and other film colorizers said that they do nothing that irrevocably changes the original black-and-white negatives of old films. They merely create a colorized alternative to the black-and-white print.

Cheaper, Faster Alternative

Owners of films like the colorized movies because the process is a much cheaper and faster alternative to producing new movies.

Colorization labs such as AFT also see the process as a way of building their own film libraries. The U.S. Copyright Office last year ruled that colorized movies are "derivative works," and can be copyrighted. That's important, Jensen said, because owners of more than 1,000 old black-and-white movies have let their copyrights lapse. The films thus could be "reclaimed" by colorizers like AFT.

AFT, in fact, plans to colorize and copyright several old Sherlock Holmes feature films starring Basil Rathbone, Sandrew said.

AFT's technology was developed by Sandrew who, before joining AFT, spent 10 years on the faculty of Harvard Medical School as a neuroscientist. At Harvard, Sandrew helped develop methods for, among other things, converting black-and-white images from brain CAT scans to color.

AFT's stock is traded publicly over the Philadelphia Stock Exchange. Since going public in September at $1 per share, AFT shares now trade at $2, "one of only two stocks in the United States that have doubled since the (Oct. 19) stock market crash," Jensen said.

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