After 40 years as the company synonymous with movie sound, Dolby is looking to extend its brand beyond the speaker and to the screen.
Company has developed a complete digital cinema projection system that represents over six years of work. But one major obstacle remains: Who’s going to pay for it?
Like other companies that have jumped into the digital cinema biz, including NEC, Kodak and Texas Instruments, Dolby has developed a system that meets the requirements of the Digital Cinema Initiatives, the consortium founded by major studios to set uniform standards for digital projection. But while DCI specs are virtually complete, theater chains and the studios have yet to decide who will pay for the equipment.
Both sides want the other to kick in a significant amount — studios because they’ll save money on film prints and distribution and benefit from antipiracy technology, theaters because they’ll save on projection expenditures and draw more customers with higher-quality visuals.
It has been a long road for Dolby to reach this holding point. Company first started looking into digital cinema six years ago with the idea of only integrating its sound systems into the nascent technology. But as execs looked closer at the business and began to get involved in DCI-sponsored committees, they became convinced that in an integrated digital world, it was hard to do audio without video.
“It became clear that audio and video are so closely intertwined in digital cinema that we would need so much expertise and knowledge of the video side that it would be hard to do audio only,” says Dolby professional division senior veep Tim Partridge.
Realizing it faced a huge learning curve to get into digital cinema projection, Dolby acquired digital video technology company DemoGraFX in April 2003 to help it develop video technology that would integrate with its audio systems and meet emerging DCI standards.
Company was already hard at work on DCI-compliant video, leaving Dolby with one remaining hole in its efforts to offer a complete digital cinema solution: security.
Preventing digital film files from being pirated has been a top priority for DCI from the beginning, a necessity for any studio to even consider taking the leap into the system. Realizing it needed to quickly catch up on that front, Dolby in Sept-ember 2003 acquired Cinea, a small Virginia-based company that worked on technology solutions to prevent piracy.
Primarily made up of refugees from defunct disposable-DVD company Divx, Cinea was hard at work on a number of antipiracy solutions — including a secure DVD system it has been trying to get studios to utilize for award season screeners — that Dolby has been able to apply to its digital cinema system.
With those pieces in place, Dolby was able to finish work on its system and develop proprietary software to control it. Unlike competitors that have adapted existing servers to projection, company decided to build servers from the ground up. Execs felt it was necessary for security and to deal with the often dirty, greasy, humid environment of theater projection booths.
Doing that took time and money, though. By the time Dolby debuted its complete digital cinema solution at CineExpo in July 2004, its system — which consists of a server and decoder — came in at around $100,000.
That puts Dolby on the pricey end of the digital offerings, but company is hoping its brand name and equipment designed specially for digital cinema will entice buyers to pay extra. “We’re at the high end of the server market, but we believe that’s because we’re building custom units for the industry,” says Partridge. “Our relationships and our reputation for quality will help us to compete.”
As Dolby waits for the studios and theaters to work out a business model for the transition to digital cinema — a task that may include outside financing — it’s prepping its system to ensure it’s ready to go as soon as buyers are ready to start spending. Company has already screened over 1,000 pics, primarily in theaters near its Northern California headquarters.
With the digital cinema market close to taking off, Dolby is poised to make the jump from a company that services sound in the movie theater to one that can handle everything needed for a digital screening.
“The goal is that moviegoers will get an entire digital cinema environment brought to them by Dolby,” Partridge says of the company’s future.