FORM 20-F THOMSON multimedia - Technicolor

publishers, network operators and exhibitors. These customers have needs that encompass
the processing, packaging, and distribution of analog and digital content in both physical and
electronic media formats via physical distribution channels or electronic distribution networks.
) content access, the final link of the video chain, consists of products and services that allow
consumers to access, view and interact with content and that provide a means for content
creators and advertisers to reach these consumers using a variety of media formats and
devices. The content access link includes consumer electronics and other devices that directly
receive, store and display media content along with critical components that enable specific
video-related functionality within these devices. Key customers are electronics manufacturers,
advertisers, retailers of consumer electronics and end consumers.
Underlying the video chain is a group of coherent technologies which allow players in the
entertainment and media industries to interact within and among the various links in the video chain.
The entertainment and media industries are experiencing transformations due to the transition
from analog to digital technologies, and in addition, the development of broadband penetration.
Since the mid-1990s, far-reaching technological changes, driven in large part by the emergence of
digital technologies along with the increased convergence of consumer electronics, telecommunications
and information technologies, have led to new products and forms of content delivery. The
transition to digital technology is proceeding at different speeds and has reached various stages of
progress for participants within each video industry segment. We believe that this trend will continue
over the medium and long term and that analog and digital content delivery, storage and access
technologies will co-exist for several years. The length of the transition will depend, among other
factors, upon the pace of technological development, deployment of infrastructure, introduction of
finished products and acceptance by players in the entertainment and media industries and of
course consumers.
Our Strategy
Our overall strategy is to occupy leading positions within each of the links in the video chain.
We implement this strategy by supplying products, equipment and services that enable video content
to flow from one end of the chain to the other. We strive to provide our clients with the range of
products and services that enable them to transition to digital technology at their own pace and in
line with the needs of their particular markets. We believe that our presence throughout the video
chain allows us to improve our understanding of the varying needs of our diverse customer base
and enables us to develop and share technologies both within and among our business divisions. It
also provides us close contact with consumers on the one hand, which helps us to assess their
needs and preferences, and with content producers and distributors on the other hand, improving
our ability to anticipate future developments. As a result, we are able to develop new solutions for
participants in the video chain, and propose a more integrated product and services offering.
We believe that as a result of our strategy we will expand and diversify our scope of business
within the professional and higher growth markets of the entertainment and media industries while
reducing our emphasis on lower growth retail consumer electronics activities. We also believe our
presence throughout the video chain and our focus on higher value-added segments will allow us to
increase the stability of our revenues and to improve operating income by diversifying our customer
base within the video chain as well as allowing us to play a greater role in the development of
products and technology standards that are driving the digital transition.
In addition to relying upon organic growth, our strategy contemplates selective acquisitions to
acquire key technology and strengthen our position along the video chain.
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