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Dolby's Innovative Business Model Upholds 37 Years of Success by Maintaining Emphasis on Licensing

"Dolby Laboratories' persistent focus on licensing its technologies -- rather than making and selling its own consumer products based on those technologies -- has paid off dramatically, as this milestone demonstrates," said Bill Jasper, President of Dolby Laboratories. "By supporting rather than competing with our licensees, Dolby Laboratories has seen our technologies proliferate much more widely, generate tremendous enthusiasm and commitment from our licensees, and set the pace for sound as it's experienced today."

Company founder Ray Dolby, recipient of Oscar, Emmy, and Grammy awards and the National Technology Medal on behalf of his company's contributions to entertainment sound, initiated his licensing focus in 1967, against the advice of investment bankers who were considering putting money into the fledgling company. When the financiers stipulated support only if Dolby Laboratories dropped its licensing plans, Ray Dolby rejected the money rather than change his company's focus.

"Ray believed from the beginning that licensing the company's technologies would lead to higher and more consistent revenues from manufacturers, would build trust in Dolby Laboratories as a partner, and would enable the company to grow while remaining independent of venture capitalists, investment bankers, and other external money sources," said Jasper. "Initially, he had to buck the conventional wisdom of the time, but history shows that it was a very smart decision and one that has inspired countless other companies to adopt a similar licensing philosophy."

From the first licensees making audio tapes with the original Dolby® noise reduction to the most recent makers of surround-sound digital products, Dolby's portfolio of licensees includes manufacturers of everything from consumer products for home, car, and mobile entertainment to professional movie-making and video equipment, and media such as audio cassettes, laser discs, video games, and DVDs.

Technologies that Dolby licenses include Dolby Digital, Dolby Digital 5.1 (surround sound for home and car applications), Dolby Digital EX, Dolby Pro Logic® II, and Dolby Headphone.

"'One Billion Sold' is a remarkable achievement for any company, particularly when these Dolby technology licenses represent that hundreds of millions of people get to daily enjoy improved audio quality at home, work, school, and play," said Richard Doherty, Director of Research for The Envisioneering Group, a New York-based consumer electronics market research firm. "Dolby sound magic improves DVDs, betters Internet audio, delivers concert hall sound to portable and car sound systems, and most importantly, all Dolby technologies build upon each other, delivering a better audio experience for everyone."

Dolby's Licensing Success Extends Worldwide

Dolby's technologies have achieved tremendous global reach. Currently, Dolby Laboratories partners with 1,430 media licensees, 146 implementation licensees, and 299 system (hardware) licensees in 41 countries; and has been granted 616 patents in 28 countries and 645 trademark registrations in 95 countries.

Dolby technologies are ubiquitous wherever sound is used: home audio equipment, decoders for satellite and television programs, movies and movie theaters, DVDs, audio CDs and cassettes, video games, and in-car head units and DVD players.

In addition to its licensing program aimed at the consumer market, Dolby makes and directly sells professional products that enable content creation for film, broadcast, music delivery, and online services. This smaller but very demanding professional market benefits from a hands-on, highly customized approach that Dolby believes it can best deliver itself. The two Dolby approaches -- licensing for the consumer market and direct sales to the professional market -- allow the company to serve the entire "chain" of sound-related activities, which work synergistically to extend Dolby technologies everywhere.

About Dolby Laboratories

Dolby Laboratories is the developer of signal processing systems used worldwide in applications that include motion picture sound, consumer entertainment products and media, broadcasting, and music recording. Based in San Francisco with European headquarters in England, the privately held company also has offices in New York, Los Angeles, Hong Kong, Shanghai, Beijing and Tokyo. For more information about Dolby Laboratories or Dolby technologies, please visit www.dolby.com.

Dolby, Pro Logic, and the double-D symbol are registered trademarks of Dolby Laboratories. Surround in Motion is a trademark of Dolby Laboratories. All other trademarks remain the property of their respective owners.

Contact:

     Dolby Laboratories, Inc.
     Jim Arnold, 415/645-5116
     jja@dolby.com
        or
     Martell Communications
     Cynthia Hoye, 978/266-0357
     choye@martellpr.com