Film studios to merge DVD operations

VIACOM'S Paramount Pictures is in talks with Sony Pictures on a deal to merge their behind-the-scenes DVD operations to cut costs.

After an industry-wide slump of up to 20 per cent in DVD sales last year, the firms are understood to be considering combining their DVD production, distribution and back-office functions, but would continue to operate as outwardly separate operations.

The deal could mean that Paramount, the firm behind the new Transformers sequel, would begin using Sony's DADC DVD production system instead of its current Technicolor system.