Dolby Bets Atmos Theater Sound System Fills Theater Seats

Dolby Laboratories Inc. (DLB), the sound and video pioneer, is introducing audio technology designed to transform moviegoers’ listening experience the way 3-D and Imax have altered what they see.

Dolby’s Atmos cinema sound system, which makes its debut tomorrow at the CinemaCon trade show in Las Vegas, employs dozens of speakers, some in the ceiling, and sound-mixing technology to create a more immersive experience, Stuart Bowling, a senior technical marketing manager for cinema at the San Francisco-based company, said in an interview. For instance the sound of a bird chirp can actually come from overhead.

“It’s a radical shift from anything we’ve ever done before,” Bowling said.

The system, costing more than $10,000 in some cases, uses as many as 64 speakers, compared with the typical theater’s five to seven, plus subwoofers for bass, Bowling said. Getting exhibitors to shell out will be a challenge following a costly conversion to digital projection that is only now being completed, said Michael Karagosian, president of MPKE Consulting, a film-industry consultant.

“People go to the theater to see movies, and not to hear sound systems or see projectors,” Karagosian said. “What Dolby’s introducing is quite exciting, but it’s a tool that could take a while to get used.”

Director Brad Bird, shown remastered audio from his 2004 film “The Incredibles,” came away so impressed he wrote on Twitter that Dolby’s treatment of his movies was “killer.”

In demonstrations this week, Dolby will show scenes from the Pixar movie and other pictures, with sounds of buzz-saw machines flying overhead, birds chirping and rain encircling audience-goers.

Upgrade Cost

Depending on the number of speakers required by a room’s geometry, an upgrade could cost “tens of thousands of dollars,” per screen, Bowling said.

Atmos, which can automatically adjust sounds to the number of speakers placed in a room, may test the fortitude of theater chains that since 2009 have spent about $70,000 per screen to upgrade to digital cinema, says Paul Dergarabedian, president of Hollywood.com’s box-office tracking division.

“Theater attendance is way up but after having spent all this money on digital projection and 3-D projection, is there money left on the table for sound technology?” Dergarabedian said.

Dolby added 0.9 percent to $38.06 on April 20 in New York. The shares have gained 25 percent this year.

The company stands to benefit as exhibitors emerge from a prolonged slump in ticket sales, Dergarabedian said.

Attendance Jumps

As of yesterday, U.S. box-office sales had risen 17 percent to $3.14 billion, while attendance was up 19 percent, according to Hollywood.com

Upgrading to digital projectors has allowed theater owners to reduce distribution costs, offer hyper-realistic films in three dimensions and at double the resolution available on a television at home -- incentives for customers to keep coming.

By comparison, few exhibitors have upgraded to the Dolby Surround 7.1 standard that lets movies deliver sounds through seven speakers plus one subwoofer, which handles bass.

Dolby will focus on installing Atmos in theaters that charge a premium for upgraded screens and sound systems in the U.S., Europe, China and Japan, with a target of 500 to 1,000 screens installed by the end of 2013, said Matt Cuson, a senior director at the company.

The first movie created with Atmos sound mixing will debut this summer, Cuson said, without naming the movie.

“The exhibitors aren’t going to invest in anything unless they know they can put butts in seats,” Cuson said. “This is something we think that’s going to go into every movie.”

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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