Exclusive: A 60% share of THX has been sold to Creative Labs for the sum of $8,000,000 – that is the news reaching us here at High Fidelity Review from a number of reliable industry sources.

The THX division of LucasFilm is responsible for schemes as diverse as commercial theatre alignment, hardware licensing (both commercial and domestic), playback technology development and software certification. The THX Theatre Program works with the exhibition and post-production community around the world to deliver the ultimate cinema experience by building certified theatres that adhere to comprehensive and proprietary THX standards and in the last few months, THX has expanded this program to incorporate digital cinema presentation.

In the home, the most recent introduction is THX Ultra2, an extension of existing THX licensing requirements, a set of playback chain specifications that aim to replicate the movie theatre experience at home through certified THX home theatre and multimedia products. THX also license DVD-Video and DVD-Audio players.

Above all else, THX have promoted themselves and the brand as the epitome of motion picture reproduction, a standard embraced by manufacturers and consumers in most markets, with the possible exception of the Far East. Recently however, analysts and technology journalists have been questioning the motives of THX, as the division was seen to move downmarket with the introduction of licensing for small rooms (THX Select), multimedia and even mobile audio products. If the news of a merger with Creative is true, and we have no reason to believe otherwise, consumers will undoubtedly further devalue the brand, especially as most naturally associate Creative Labs with their range of portable audio, budget loudspeaker, removable storage and multimedia products rather than high-end audio/video.

Singapore-based Creative was founded in 1981 and is famous for, amongst other things, its Sound Blaster range of PC sound cards. In 1988, the company opened a subsidiary in Milpitas, CA, from where Creative Labs, Inc. quickly became a major player in the lucrative American market.

Creative’s own corporate literature states that the company’s mission is “…to expand upon its leadership role in PDE, utilising innovative technology, broadband and leading-edge designs for technically progressive consumers and entertainment enthusiasts.” How this will affect the research and design teams at LucasFilm remains to be seen, but one would expect to see their existing close relationship between the motion picture industry and hardware manufacturers remain as the driving development audio/video force at the newly combined subsidiary, while Creative’s contacts in the multimedia market will undoubtedly expand the market for THX certified personal computers.

It is said that under the new agreement between LucasFilm and Creative, that the former will retain the right to veto any representatives of the new company and any new technologies it develops. This affectively means that LucasFilm have the final say on the personnel heading up the new LucasFilm/Creative enterprise and any subsequent licensing arrangements.

At the moment, this information is unconfirmed, but the deafening silence from the THX division of LucasFilm (Warren Mansfield, Christina Lohrisch, John Dahl et al) and their public relations agent Griffin PR (Terry Shea) when asked for their comments, speaks volumes.

Update: 01:45 BST 29/05/02: Creative’s public relations manager Phil O’Shaughnessy has responded to our request for more information. His reply, in its entirety:

“Thank you for your inquiry. As a company policy, Creative does not comment on rumors.”

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I do agree, though that the idea of certifying car amps and speakers cheapens what was orginally a really good concept.

I feel like we're missing some critical detail...

In the theatrical exhibition world THX is a declining model. For the most part people are doing it right. Remember, when THX started, theatres thought it was all right to put in Mono, surround systems with 50 watts of power. Now, every time you call up a supplier you will be quoted something that is real close to THX spec. With Digital sound the proper requirement meets or exceeds the THX spec. Theatre companies know they don't need to pay Lucas to have great sound.

But in the home entertainment business, THX has great presence. In spite of Lucas' embracing video, I don't think he cares what happens in people’s homes. So he sold THX for $8 million. Do you think THX would be worth that in even 10 years from now? I think Lucas got out of this business just in time. But even if Creative owns 60%, Lucas can still drive the business if he wants to.

Update:

LucasFilm Sell THX Division – More Details
More details about the sale of THX are reaching us here at High Fidelity Review.

Last week we exclusively broke the news of the sale of THX by LucasFilm to Creative Labs., and now we’re in a position to provide more information thanks to Terry Shea, Vice President of Griffin Public Relations.

Our original story was correct; a 60% share of THX has been sold, but not just to Creative. A new company has been formed, it will become known as THX Ltd., Lucasfilm remains an investor, as is Creative Technology (parent company of Creative Labs.) and there are also several, undisclosed private investors.

As yet the specific percentages of ownership have not been disclosed, but we do know that no one individual investor or company has a majority share in THX Ltd. However, as Creative is a publicly held company and is accountable to its shareholders, specifics about their part in THX Ltd., and the amount of their financial investment will become known when their own balance sheet is published.

Terry was quick to inform us that it is “…business as usual - all THX programs (professional and consumer) remain in place.”