‘Not Much We Can Do’ to Fix DVD-Replication Declines, Says Technicolor CEO

surprise to anybody,” he said. Standard-definition DVDs fell 17 percent to 787 million discs, while Blu-ray units increased 12 percent to 342 million, he said. Ultra HD Blu-ray is growing, and that’s “helping to offset, in Blu-ray at least, weaknesses in some of the other segments” of disc replication, he said. Profit for the year in disc replication took a “very material” hit, partly on “a very significant downturn from one major customer in their SD catalog volume expectations” late in Q4, he said. For 2019, “there’s not much we can do about the volumes, we’re living with that,” said Rose. One strategy for late in the year will emphasize the “renewal of customer contracts” that begin expiring in early 2020, he said. “We have every major studio in North America as our customer and the largest platform in the world. What we now need to do is convince our customers to move to volume-based pricing up and down, so that Technicolor no longer takes the risk of an income structure with volumes that move faster than we can adapt.” Technicolor also needs to change its “pricing rate card” to suit customer-distribution trends that have changed radically in the past five years, said Rose: “Very small packaged orders of 10 to 20 DVDs cost as much to process as 10,000 DVDs, so obviously, we need to change that.”