Dolby Vision is enjoying impressive traction with new partners. Source: Dolby Laboratories,
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Shares of Dolby Laboratories might not show it so far this year, but it seems an understatement to say the audio technologist hit the ground running in 2016. Interestingly, though, much of Dolby's latest news doesn't revolve around its core audio competencies, but rather increased traction for some of its most promising emerging technologies.
A (Dolby) Vision for the future
First on Tuesday, Dolby announced new commitments from both Metro-Goldwyn-Mayer (MGM) Studios and Comcast Universal Pictures' Home Entertainment to deliver titles mastered in Dolby Vision to their respective home entertainment distribution platforms.
Dolby Vision just secured several new agreements, Source: Dolby Laboratories.
Though Dolby didn't specifically reveal which titles are involved, these appear to be wide-reaching agreements. According to Curt Behlmer, Dolby senior VP of Content Solutions and Industry Relations, the collaboration will incorporate Dolby Vision into both companies' "extensive libraries and compelling new release slates."
"These partnerships will ensure a robust Dolby Vision content pipeline and unique visual experience for viewers," he continued.
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Dolby pitches Dolby Vision as a complementary technology to HD and Ultra-HD video signals, primarily as it works to improve the pixels on screen to more closely simulate how our eyes actually see the same objects in real life.
But it's also not as though the pipeline of Dolby Vision titles would have been empty without these two new agreements.
In fact, Dolby secured a similar dealalmost exactly one year ago with Time Warner's Warner Bros. Home Entertainment. That deal started with a few early 2015 releases such as Into the Storm and The Lego Movie, and then expanded later in the year to what Warner Bros. management similarly described as a "steady pipeline of Dolby Vision titles."
Then in mid-April, Dolby struck agreements with AMC Entertainment to build 100 "Dolby Cinema at AMC Prime" locations featuring Dolby Vision and Dolby Atmos sound in the coming years, and with Disney to bring the first Dolby Vision titles to Dolby Cinema locations around the globe. AMC Entertainment, for its part, was so impressed by the early response to Dolby Cinema at AMC Prime that it accelerated the build-out of new theaters by several years as of Dolby's most recent quarterly report. And Disney's Dolby Vision effort so far has included titles such as Tomorrowland, Pixar's Inside Out, and most recently the record-shatteringStar Wars: The Force Awakens.
And more hardware, too
Also on Tuesday, Dolby announced LG Electronics' 2016 line of premium OLED TVs, and its Super UHC TVs will all feature Dolby Vision. At the same time, Dolby noted that consumers will be able to use these televisions to stream ultra-HD Dolby Vision content through Netflix, which first began streaming Dolby Vision titles this past fall.
As it stands, this fulfills Dolby management's promise early last year that -- after Vizio announced the very first Dolby Vision-enabled TV in January 2015 -- more TV design wins were on the way.
Sounding off with Sony
Finally, on Wednesday, Dolby capped off its busy week by announcing an agreement with Sony Pictures Home Entertainment to release its first 4K Ultra HD Blu-ray titles with Dolby Atmos soundtracks, starting early this year withThe Amazing Spider-Man 2, Salt, Hancock, Chappie, Pineapple Express,and The Smurfs 2.
While the majority of Dolby Atmos' early progress came as it found its way into movie theaters across the country, this deal is notable in that it should accelerate adoption of Dolby Atmos in the home.
An investor's dilemma
At the same time, it remains unclear whether these new design wins will collectively be enough to reignite growth, as revenue from Dolby's former core Consumer Electronics segment (think optical disk drives and Blu-ray players) has waned.
Last quarter Dolbysuffered revenue declinesin all but two segments of its business, and management placed the primary blame on "near-term weakness in consumer markets." Combined with Dolby stock's extended underperformance relative to the broader market, that was enough to make me close the long-standing "outperform" call I'd held for several years on Dolby in my CAPS portfolio.
However,Dolbycouldpersuade me to reopen that call if it proves that new tech such as Dolby Vision and Dolby Atmos can fill the void and return the company to sustained, profitable growth. For now,these deals show that Dolby is making impressive strides to ensure that its latest audio and video technology will remain at the heart of consumers' entertainment experiences. But I need to see the fruit of Dolby's labor fall to its top and bottom lines before I'm willing to step in again as an investor.
The article Dolby's Latest Tech Keeps Piling On New Wins originally appeared on Fool.com.
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