Technicolor Buys Stake in Real Image Digital
CAMARILLO, Calif.--(BUSINESS WIRE)--Aug. 5, 1999--Technicolor, the world's leading visual packaged media company, announced today that it has acquired a significant interest in Real Image Digital, a leader in the development of digital cinema.
As part of the transaction, Technicolor is acquiring 49 percent of Real Image Technology Inc. by investing $23 million in cash with a mechanism to acquire an additional interest in the future on pre-negotiated terms. On the basis of successful trials, Technicolor will invest a further $60 million in order to develop the business.
A leading innovator in motion picture technology since bringing color to the movies 80 years ago, Technicolor - together with Real Image and its technology partner, Sarnoff Corporation - is now poised to offer its customers the digital delivery of movies alongside its existing services. The deal represents an historic move in the evolution of the motion picture industry.
Technicolor, a 100 percent owned subsidiary of Carlton Communications Plc (Nasdaq: CCTVY), processes and develops film during production and then produces and distributes release prints direct to over 34,000 cinema screens across the U.S. for studios such as Disney, Warner Brothers and DreamWorks SKG.
"We are building Technicolor into a full service, global business," said Steven Cain, chief executive of Carlton. "Real Image brings technological leadership and a strong management team to help us move further and faster into digital media. Together we will create another profitable Technicolor business to partner with the Hollywood Studios and deliver their content around the globe."
The move by Technicolor signals important progress in meeting key elements of the 10 point strategic plan published by Carlton in May. The plan's targets included Technicolor's expansion into new formats and specifically mentioned the importance of developing digital media asset management and distribution for its customers.
"We are taking Technicolor to the next stage of its development," said Lanny Raimondo, Technicolor's chief executive officer. "Just as we moved from film to video, and more recently from video to DVD, we are now ready to lead the evolution into digital distribution."
Wayne Schoenfeld, chief executive officer of Real Image, said: "Backed by Technicolor's proven experience and Carlton's significant resources, we will present to the motion picture community a service-based model and the enabling technology for entering the digital age of motion picture distribution."
Real Image's technology will encompass the full range of processes required to compress, encrypt and store a film digitally so that it can be electronically transported and digitally projected in a high-quality, copyright-secured format. First announcing itself publicly at ShoWest in March 1999, Real Image's management group of industry experts has been working for five years to achieve its e-cinema goals through platform-neutral technology.
Real Image is partnered with the Sarnoff Corporation, the Princeton, N.J.-based research facility engaged in developing the compression technology critical to the electronic delivery of motion pictures. With a staff of 750, the Sarnoff Corporation has been intensively involved in developing core technology for the distribution and compression of digital media.
Technicolor and Real Image expect a rapid growth in interest in digital cinema technology after a boost this summer from digital screenings of George Lucas' "Star Wars," Miramax's "An Ideal Husband" and Disney's "Tarzan." The two companies are developing a business plan to provide a complete digital and financial solution for distributors and exhibitors allowing e-cinema to grow alongside the traditional film print production business.
Film will continue to be the principal distribution medium for motion pictures for some time to come. In addition, the overwhelming majority of movies will still be shot on film and processed in the normal way before being released on to film print (as is done today) or digitized and distributed electronically using the new system.
Notes To Editors
1. Under the transaction, Technicolor has acquired 49 percent of Real Image. Technicolor can further expand its stake on pre-negotiated terms, including the acquisition of a further 11.5 percent.
2. Much of the coverage to date on the development of digital cinema has focused on projector technology with the two systems from Hughes/JVC and Texas Instruments. Projection is the last stage in the fully integrated digital supply chain that Technicolor and Real Image plan to establish. Key to this is the successful commercial development of technology to compress and encrypt film quality images, which is many times more complex than video compression for the home entertainment market.
3. Technicolor is the world's leading supplier of the packaged media of film, videocassette and DVD. It is a high quality, low cost, international service partner for film and program makers, software developers and cinema owners. It has facilities in California, Michigan, Tennessee, Virginia, New York, Ohio, New Jersey, Canada, Mexico, Denmark, Holland, Italy, Spain, Luxembourg and the United Kingdom. Major Hollywood clients include such studios as Disney, Warner, DreamWorks and New Line. Software publishers include Microsoft and Hewlett Packard.
4. Real Image was founded by Linwood G. Dunn, ASC, Academy Award winner and cinema technology pioneer. Senior management include: CEO Wayne Schoenfeld, entrepreneur in health services and commercial aviation and President Donald Rogers, former Senior Vice President of post production services at Warner Brothers Studios and recipient of the 1996 Academy of Motion Picture Arts and Sciences special Gordon E. Sawyer Oscar for lifetime achievement in technology. Michael Corrigan, former senior executive vice president of MGM, is Chairman of Real Image's Advisory board which includes the producer, Irwin Winkler
("Rocky," "Raging Bull," "The Right Stuff"); Richard Edlund, four-time Academy Award winner for visual effects; and Ed DiGiulio, Academy Award winning developer of the Steadi-Cam. Real Image is based in Los Angeles.
5. The Sarnoff Corporation has pioneered a number of key technologies in the delivery and imaging of digital media, including satellite-delivered Direct TV and on-demand pay-per-view TV (DIVA). They are a key developer in the ongoing evolution of MPEG and in the past pioneered color TV and LCD technology.
6. Carlton Communications PLC is a visual media company with two principal businesses, the Carlton Media Group and Technicolor. Carlton is the largest commercial terrestrial broadcaster in the United Kingdom with the most extensive library of English speaking movies outside of Hollywood.
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CONTACT:
Technicolor
Carrie Bissell, 805/445-4286
or
CSP Communications (Technicolor)
Rick Miltenberger, 909/272-1888
or
DDA Media Tek (Real Image)
Rex Weiner, 323/692-2330
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