Deluxe's Hollywood Film Lab to Close May 9

"Our processing volumes have declined sharply, and as a result, the laboratory has incurred significant financial losses," wrote COO Warren Stein in a notice to customers.

Deluxe Laboratory in Hollywood is scheduled to close its doors May 9.

It’s hardly a surprise, though it is another prominent reminder that film production and distribution is winding down and being replaced by digital technology. More than 95 percent of cinema screens in North America are now digital, and a studio typically makes fewer than 100 film prints for this market, even for 4,000-plus screen tentpole releases.

Warren L. Stein, Deluxe’s COO for North America, notified customers in a memo that was obtained by The Hollywood Reporter. It reads: “The capture and exhibition of motion pictures has transitioned from film to digital in recent years. Our processing volumes have declined sharply, and as a result, the laboratory has incurred significant financial losses. This has forced us to make this very difficult decision."

In the memo, Stein reported that with the closure in Hollywood, as well as the Deluxe laboratory in London, its only remaining film processing site would be its small facility in New York.

“While emotionally attached to our 100-year legacy with film, we are firmly focused on the future of Deluxe," the notice reads. "In this historic time in our industry, we wanted to thank our customers for their business and for their trust. We look forward to servicing their needs in the entertainment media marketplace for the next hundred years and beyond.”

Paramount has already said it would stop releasing film prints in North America (with certain exceptions), and that effort started with the release of The Wolf of Wall Street.

Underscoring this shift, an Academy Award of Merit – an Oscar statuette – was presented to honor “all those who built and operated film laboratories, for over a century of service to the motion picture industry,” last month at the Academy of Motion Picture Arts and Sciences’ annual Scientific and Technical Awards Presentation. Speaking with The Hollywood Reporter at the ceremony, SciTech committee chair and Oscar-winning VFX artist Richard Edlund acknowledged, “This year may be the last full year that the movie labs are going to be running."

Deluxe, as well as Technicolor, had been the leaders in lab services both in California and worldwide. Technicolor has already ceased offering these services in Southern California, meaning that with the shutting of Deluxe’s lab, only privately owned Fotokem in Burbank remains in this market.

In July 2011, Deluxe and Technicolor began an orderly retreat from film, inking three-year subcontracting agreements that reduced their footprint of film services around the world. Last year, Deluxe struck a deal with London film lab iDailies to support its U.K.-based 35mm projects as it moved toward shutting down its London operations.

Digital of course has already overtaken film in production, although celluloid still has a (smaller) base of users. This year's Oscar-winning best picture 12 Years a Slave was actually lensed on celluloid, and upcoming features shot or planned to be shot on film included Wally Pfister’s directorial debut Transcendence; Chris Nolan’s Interstellar; and J.J. AbramsStar Wars Episode VII.

Additionally, archivists continue to rely on film for their work, since it is the only medium that has proven it can last for more than 100 years.

Twitter: @CGinLA