Seriously Ineligible
Dolby Laboratories is going public. Inquiring minds want to know: what are the future fortunes of Ray Dolby’s namesake enterprise after his retirement?
Dolby earned his place on the consumer electronics map taking the “ss” out of cassette. Way back when everything was still analog. The enterprise grew with unexpected agility as all components made the transition to transistors except the speaker (and Henry Kloss is another story). Audio giants like Sony, Pioneer, or Philips could have ignored him or bought him out or Microsofted him, but they didn’t. Dolby technology and professionalism has secured for the company a big fish position in the small and dwindling pool of American consumer electronics patent owners.
Digital changed everything. Noise reduction had no place in the CD era because there is no noise created by friction like tape scraping heads. No Dolby button on a CD player in my studio anyway. But Dolby, who was no one-trick Pony, reinvented the meaning of his own brand name. Dolby Digital, the 5.1 multichannel audio codec also known as AC3, carried Dolby into the digital television era piggybacked on the ample coat tails of DVD and digital pay TV as a full-fledged audio codec.
3 Out of 4 Ain’t Bad
To make it as a mass market consumer electronics technology today, it helps to be horizontal, strong in 3 out of the 4 main content market segments, games, information, music and video, and Dolby is. But we’re talking legacy here. Dolby’s assignment, if he chooses to accept it, could be to reinvent audio technology (with a royalty for himself built in).
Shawn Fanning, founder of the original Napster, did not choose Dolby Headphone, if it were even offered, but rather a license-free audio codec called MPEG-1, layer 3, also known as MP3. And it was successful because you don’t need 16-bit PCM audio at 44 kHz in ear buds and you don’t need to wait for it to download when a small file will do the job. Dolby doesn’t get a royalty here.
Unfortunately, Dolby’s elegant technology for DVD-Audio, MLP Lossless, six channel 96 kHz 24-bit, was too much too late. The DVD Forum got around to DVD-Audio in 1999, 3 years after launching DVD-Video, and released it in mid-2000. By then, there was already on the order of a 50 million worldwide installed base all in, and millions more in the channel, of DVD devices that did NOT have the DVD-Audio codec (and still to this day a great many do not). There was no Warren Lieberfarb to champion the technology and rally the content owners for DVD-Audio.
By then, the market attention had shifted to downloading singles over the internet using a low bit-rate codec (helped enormously by the negative publicity of the industry’s own trade associations). By then, Sony had sent out an SACD decoy (which was one hit short of a one-hit wonder, and has not achieved more than to throw a monkey wrench into the DVD Forum machine). By then the record industry was paralyzed with fear over the loss of the CD catalog revenues, and had begun to cut back on albums released.
When I began to become interested in learning to fly, my friend Len whose plane I train in told me something his trainer told him. When conditions change and you need to get down in a hurry, people often panic, are paralyzed, and crash when they could have kept on flying the plane and survived. Fly The Plane, a simple yet non-intuitive piece of advice for all leaders of all things when conditions change unexpectedly and unfavorably.
Sadly, touting the codec as “bit for bit” equal to studio masters probably was not a comforting point by that time with the record label execs who had just fired a lawsuit across the bow of the consumer electronics manufacture who had first dared to make a mobile MP3 player. Technophobia among label execs is dominant genetically, and not only was DVD-Audio a new music format that didn’t play in the new DVD-Video format machines, but the output could not even be managed by the existing digital optical and coaxial connectors and required upgrading to Firewire. Like broadcasters after the HDTV ruling who complained about having to pay for upgrading content and equipment in return for their free spectrum, record execs complain about paying to fill up those big bit buckets in return for reselling the catalog.
Sales of CD and cassette singles never approached the 45 record of the Baby Boom Generation, so Generations X and Y filled the singles medium vacuum with Napster and its predecessors. The industry misinterpreted this as a preference for stealing over buying music, even though there was no (and arguably there is still no) ideal music downloading service (e.g. with a complete catalog, open standard, no strings transaction). The industry misinterpreted the fall-off in sales as a general downturn in the market, even though sales had been down just a few years before and had come back up. The industry misinterpreted the fact that the market was enthusiastic about downloading music because it was free, when it was about the music all along, and the music was never really “free” given the cost of downloading platforms, burning CDs, and the time involved in searching among the uneven quality offers.
“I think the lesson to be learned is stop worrying about trying to stop the Napsters of the world. What you have to do from a marketing standpoint is combat it with marketing, not with lawyers and the RIAA suing somebody. Give the public what they want. The public seems to want single songs at a reasonable price. They have to pay for the downloading onto the blank CD and so forth, but you’re locking out a lot of the marketplace . . . The answer to the whole thing is not the RIAA, and it’s not the copyright tribunal, and it’s not Napster as a matter of fact. The answer is creative freedom. Music and the public are always ahead of the record companies. Always.”
– Warner Music Inc. 34-year-veteran Stan Cornyn, in a Q&A interview with Tech Live’s Lindsey Arendt, July 1, 2002
Dolby is not participating in any patent pool for MP3 player decoding or post-production encoding. It does share (with a dozen firms) in the MPEG-4 AAC license to such firms as Apple, Real, Sony Ericsson, Pioneer, LG, et al. AAC has a shot a winning a place in 3G cell phones, the next generation standard for broadband wireless streaming of video and audio. The use of Dolby Digital over the native PCM format in DVD-Video is optional, although this does not affect the inclusion of Dolby’s MLP Lossless codec in every encoder and decoder. Set-top boxes for DVB include Dolby, DTS and Microsoft audio codecs, as do the next generation blue laser discs. Videogame consoles may pass through Dolby Pro Logic encoding from the disc to a preamp or multichannel receiver while DVD-ROM drives would do the same to the PC surround sound card. Video game developers totally get the power of music and sound effects integrated with imagery.
So everything is firing on the prerecorded side except the one thing you’d think Dolby should be firing on - prerecorded music - for the last 20 years.
The record labels killed DAT in the 1970’s. The CD era has entered obsolescence after a remarkable 23 year start to peak time period. The music execs failed to grasp the business potential of developing the higher fidelity formats of DVD and SACD (read: selling the entire catalog all over again and making obscene amounts of money doing it) with higher resolution audio and music video and…album art with liner notes!
They ate their young for helping themselves to the product the industry could not commercially provide - singles downloaded over the Internet. Now they are facing widespread anarchy as their sales decline with no viable prospect of replacing it except music videos using the regular DVD-Video audio, if they saw the potential, and DualDisc, the combo CD and DVD-Audio sandwich on the upgrade, and streaming or downloading tunes over broadband on the low end.
Can Ray Dolby (or anyone) teach the labels (or anyone) how to use technology to anticipate audio trends like he has these last 20 years? The music catalog will soon be a beached whale bearing an uncanny resemblance to the Bettman Archives when quietly bought by Bill Gates in 1995. Today between Gates and Mark Getty, most of the world’s photos, including fine art, have been bought up by one of them. They proclaim they did it “to save the visual history of mankind from extinction”, for a royalty fee, of course.
“Anyone who thinks Baroque is pronounced like Barbeque is seriously ineligible to touch this recording.” - Stan Cornyn, liner notes for Anita Kerr’s Slightly Baroque.
posted by julia b schwerin