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Technicolor Signs Key Contract With Microsoft

Technicolor To Manufacture Millions Of Discs with Proprietary Edge-To-Edge Holographic Anti-Piracy Technology

CAMARILLO, Calif.--(BUSINESS WIRE)--Dec. 1, 1999--Technicolor, the world's leading visual packaged media company and largest independent CD and DVD replicator, Wednesday announced that it has entered into a three-year manufacturing and technology contract with Microsoft Corp. to replicate millions of discs, beginning with Windows 2000 product.

Technicolor will be Microsoft's leading supplier of tens of millions of discs per year beginning with the launch of Windows 2000 on CD-ROM in mid-November 1999. To accommodate production, the company is increasing its worldwide replication capacity by 30 million units per year with the addition of eight new manufacturing lines.

All told, Technicolor, one of Microsoft's five suppliers, will have a global capacity to produce more than 325 million discs annually.

Lanny Raimondo, chief executive of the Technicolor Group, said: "This represents a major step forward in Technicolor's ongoing relationship with Microsoft. Working with the world's most successful software provider is a tremendous opportunity. We will be providing a full service from anti-piracy technology through to manufacturing and distribution.

"For the first time, Technicolor will also be earning significant licensing income from the technology we have developed with Applied Holographics."

As part of the agreement, Technicolor will be using its proprietary edge-to-edge holographic technology, which is considered to be one of the premier anti-piracy measures currently available.

The technology, which has been developed by 3DCD, a joint venture between Technicolor and Applied Holographics Plc., enables a hologram image to be placed on the full surface of the disc without affecting the capacity or integrity of the content. Earlier Microsoft products have featured the licensed use of 3DCD's proprietary inner mirror band hologram with tremendous success.

Both technologies provide consumers with the ability to clearly identify the discs as legitimate Microsoft product.

Joachim Kempin, senior vice president with Microsoft said: "The ability to protect our software products from counterfeiting is vitally important to Microsoft, and to consumers, and Technicolor continues to provide the industry's most advanced anti-piracy measures.

"Technicolor's inner mirror band hologram proved to be a significant piracy deterrent for our previous product releases, so moving to the more advanced edge-to-edge technology is a natural step for us."

All of Technicolor's worldwide facilities will be equipped with the ability to apply the edge-to-edge technology to discs. Additionally, a select group of manufacturers is also being licensed to use the edge-to-edge technology as part of the agreement between Technicolor, 3DCD and Microsoft.

A wholly owned subsidiary of Carlton Communications PLC (Nasdaq:CCTVY - news), Technicolor has evolved as the number one processor of motion picture film to become the world's largest manufacturer and distributor of pre-recorded videocassettes and a leading global replicator of optical media including DVD, DVD-ROM, CD and CD-ROM.

The company has the capacity to produce in excess of 1.5 million videocassettes, 900,000 CDs and 150,000 DVDs a day.

Offering worldwide manufacturing and distribution capabilities, Technicolor's Packaged Media Group serves an international base of customers with its facilities in California, Michigan, Tennessee, Virginia, Mexico, Denmark, Holland, Italy, Spain, Luxembourg and the United Kingdom.

Major clients include the Hollywood studios Disney, Warner Brothers, DreamWorks SKG, 20th Century Fox, MGM, New Line, Lyrick Studios and software companies such as Microsoft and Hewlett Packard.

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