Through much of the 1920's, virtually all cinema looked like the old-fashioned clips you've seen on TV, black-and-white and silent. Toward the middle and late twenties, technological revolution swept the industry, with the advent of two-color process cinematography and synchronized sound. Technicolor was originally one of the brands of two-color process to choose from, using a technique that split the light entering the camera through a green filter and a red filter, and recorded them onto successive frames of film running at double-speed. For printing, gelatin matrix reliefs of the two colors were made, and a final version printed from them onto a clear cellulose nitrite strip -- this will be explained in detail later, don't worry. The final product was a print that displayed the spectra from black to red and green, but had no blue content whatsoever. Fleshtones and indoor lighting looked okay given this constraint, but the sky, sea, and other blue stuff looked terrible. Audiences were generally apathetic, and "talkies" were considered a much bigger deal.
At least one of the Technicolor Corporation founders and head inventors, Dr. Herbert Kalmus, was looking toward the future of the medium, and the future of the corporation's often-insolvent stock. In 1931 he began work within the company on a three-strip full color camera and printing process, and by mid-1932 that work was complete. The first Technicolor camera, which used three strips of black-and-white film to record all the colors of visible light, cost the company over $30,000 in 1931 dollars, which was, well, one hell of a lot of money.
The technology behind the camera was nothing short of amazing, and will probably be difficult to explain well without illustration. First, understand that the best way to break the visual spectrum into discrete blocks is to split it into red, green, and blue constituents. Each of these further has a brightness value, ranging from black to some fullbright level. If all constituents are fullbright, their combined light is white, if red and blue are black, the combined light is green, and so forth. See more about this under RGB if need be, it's somewhat counterintuitive until you get used to it.
In the old system a prism split the full-color light from the camera's lens into two paths, one of which was passed through a red filter and one through a blue-green filter, and thence to the black-and-white film itself. Not so difficult to imagine or implement in hardware. Splitting the light three ways presents a problem, though, that when light passes through two splitting prisms the final two outputs will be half as bright as the first, and much too dark to expose the film that was available at the time. Instead, Technicolor decided to make the film with one split. Half the light goes through a green filter, and exposes one strip of regular b&w film. The other half of the light passes through a magenta filter, removing the green portion of the spectrum, and then through a super-specialized bipack film. The first layer of the bipack has an emulsion which is only sensitive to blue light, and thus captures the blue section of the spectrum. Next, the light goes through an orange filter, which removes the blue portion of the spectrum, leaving only red light. That red light exposes normal black-and-white film, capturing the red portion of the spectrum. Put together, full color exposures of each shuttered frame are made.
So, now we have essentially three exposed negatives, that if made positive and projected together through their respective red, green, or blue filters could produce a single image in ideal color. However, releasing in this format this would have required a great deal of work and specialized equipment on the part of the movie house, which would probably have taken its business elsewhere rather than install such an unwieldy system. Instead, prints of the film needed to be made, single strips of cellulose that can project all of the colors.
From here, the process becomes almost more like lithography or other print media than film. Each of the negatives is exposed onto a special "matrix" film, which has as its emulsion a layer of gelatin with a layer of silver halides over it. Upon contact with light, the halides act much as they do in a regular black-and-white exposure, and change chemically in such a way that they may be washed away. On matrix film, however, the wash step also takes away some of the gelatin layer where the halide flakes are embedded, leaving indentions that get deeper as the areas washed away become darker. The end product of this is a transparent gelatin topographical map which becomes deeper where the negative was lighter, or where the final print is to be darker.
Each of these matrices is dipped in cyan, magenta, or yellow ink, corresponding to the complimentary colors of red, green and blue respectively -- that is, the cyan+magenta inks make a blue area, the magenta+yellow make red, and the yellow+cyan make green. I won't even attempt to explain why this works, see CMYK for that. Finally, each matrix is pressed in succession against receiver film, which is coated with an ink mordant to help pick up and retain the color. Deep indentation in the matrix produces a deep color on the print, and if all three matrices have no indentation the print is left white. In the original process the receiver film was pre-exposed with a positive 50% black copy of the green strip, which gave black areas on screen additional definition and darkness; this process was phased out in 1945. Also, black frame borders and an optical soundtrack were exposed onto the receiver film before color printing was done. The final product is a strip of color film that looks exactly like a modern one, replete with bright, solid, perfect colors that cross the entire visual spectrum.
As it turns out, this was exactly the kind of color that the public was waiting for. Walt Disney and his company, always at the cutting edge of animated film, jumped on the technique when Kalmus demonstrated it to them. Disney already had a cartoon in production, which to the dismay of others in his company he scrapped all animation on and had the artists start over in full color. Still, near the end of 1932, A Walt Disney Silly Symphony, Flowers and Trees was released, filmed and printed in Glorious Technicolor. Disney was so impressed by the public's response (and probably moreover, the response of competing studios) that he signed a five year exclusive contract to use Technicolor. Other studios protested to such an extent over the next few months that eventually the contract time was shortened to one year.
In 1934 a Technicolor financier named Jock Whitney created the Pioneer Pictures company and produced a short musical, La Cucaracha. The first full-length movie to use the technique was 1935's Becky Sharp. By 1939, considered in some circles to be the peak of the American art of cinema, many studios had embraced Technicolor, leading to stunning classics like Gone With the Wind and The Wizard of Oz.
The last film to be shot in three-strip technicolor with its huge, cumbersome cameras was Universal Studios' Foxfire, in 1955. Eastman full-color negative film had by that time become fast and stable enough to be used for all purposes, and offered good enough color to beat the competition with its much lower price. Technicolor continued to use its ink transfer printing system until The Godfather Part II in 1975, when it too was phased out because Eastman color prints were cheaper to manufacture at low volume. Sadly, the Hollywood Technicolor facility was dismantled, and the building sold.
Recently, with the advent of multiplexes and multi-thousand copy print runs, as well as directors like Spielberg who love the richer color, interest has been renewed in the Technicolor print process. Copies of Bulworth and Batman were printed with it, and the national re-release of Gone With the Wind as well. Rumor has it that a 2000 copy re-release of The Wizard of Oz will be printed in time for Christmas of 2002.