Studios mull marriage of DVD ops

Sony, Paramount, Fox looking to cut operation costs

Sony, Paramount and Fox are in early discussions regarding a plan that would collapse some physical-service operations in their respective home-entertainment divisions into a single entity.

The plan aims to cut costs in areas such as DVD production, physical distribution and assorted back-office functions.

Dozens of employees now handle those tasks at each studio, and Par is looking to eliminate many of the posts under the plan being discussed. Sony's relevant operations -- whose propriety disc-producton system figures centrally in the plan -- likely would grow rather than shrink. It wasn't immediately clear how Fox figures in the mix of possibilities.

The studios declined official comment, but insiders spoke on a background-only basis after a story on the Financial Times' Web site suggested a major "merger" of the studios' home-entertainment divisions. Nothing so dramatic as that is afoot, which would seem to run afoul of antitrust laws.

Still, though the more narrowly focused talks are preliminary, parties confirmed the discussions have outlined the broad strokes of a possible limited merger of certain physical operations.

Par uses Technicolor for DVD production. Under the plan being discussed, it would shift that work to Sony, along with much of its back-office operations.

Par was second, Fox fourth and Sony fifth in DVD market share last year below segment leader Warner Bros., according to Nielsen VideoScan data.
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