UPDATE: My sources were right: media technology group Thomson SA announced in Paris Thursday that it needs a cash infusion to improve its balance sheet and is exploring solutions with creditors and potential equity investors while warning it was “likely to breach one of its debt covenants”. So here’s the huge problem for Hollywood: the French-headquartered electronics and media giant, since 2001, has owned Technicolor, which is the giant maker of DVDs for the studios. “I can tell you the rumors have been flying all day as each studio was getting informed from Thomson of the announcement coming tomorrow,” one source told me today. “The studios’ DVD divisions were pretty shook up about the news since there’s not really another DVD maker that can handle the volumes Technicolor does.” Technicolor has long been a highly successful film processing firm that also became involved in DVD manufacturing. At least now the studios know that Thomson is going to stay in the DVD business because the company emphasized Thursday that it will focus “on providing services to content creators in the movie and media industries”. Meanwhile, sources tell me that Thomson expects to receive help from the French government to continue operating.