Paramount Home Entertainment has renewed its replication and DVD services agreements with Technicolor, ending speculation it could enter into a physical distribution partnership with another studio.
In early summer Par was negotiating with Sony Pictures Home Entertainment, 20th Century Fox Home Entertainment and possibly others about a limited partnership for replication, shipping and returns processing. Instead, it has renewed and restructured its deal with Technicolor, its replicator since 2002.
“We are looking for the most efficient way to go to market,” said PHE prexy Dennis Maguire.
The new multiyear deal extension tasks Technicolor with helping the studio realize cost efficiencies in areas such as shipping, raw materials sourcing and timely inventory replenishment to retail, Maguire said.
Technicolor is Paramount’s worldwide replicator for both standard DVD and Blu-ray. In addition, it provides distribution services including mastering, packaging and returns processing for the studio in the U.S. and Canada.
The new multiyear deal also covers lines distributed by Par, including MTV Network Properties, CBS, PBS, Hasbro and DreamWorks Animation, Maguire said.
The commitment to Technicolor comes a week after Maguire’s appointment to worldwide president of PHE. He was previously international prexy of the studio division.
Paramount, like other studios, is seeking to squeeze costs as it grapples with the maturation of the DVD market, which has seen consumer sales fall by about 16% year-to-date. Though sales of the Blu-ray Disc high-def format grew 83% in the same period, and VOD and digital formats combined grew by 20%, sales in the newer formats are not large enough yet to counterbalance the DVD decline.
Par is distributing four of the biggest homevid releases of the fourth quarter: “Star Trek,” “G.I. Joe: The Rise of Cobra,” DreamWorks Animation’s “Monsters vs. Aliens” and DreamWorks Studios’ “Transformers: Revenge of the Fallen.”
“As we navigate the changing home entertainment environment, this new deal is a forward-looking redesign of how we work together, allowing Paramount Home Entertainment and Technicolor to globally maximize efficiencies while still providing our customers with the highest quality product and service,” said Paramount Pictures chairman-CEO Brad Grey in a statement.
Frederic Rose, chairman-CEO of Technicolor parent Thomson, said: “This agreement also serves to further confirm our expanded partnership with Paramount, which was strengthened earlier this year with our announcement to create a state-of-the-art post-production facility on Paramount’s Hollywood lot.”
(Marcy Magiera is editor-in-chief of Daily Variety sister publication Video Business.)