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Topic: Dolby acquires Doremi

Sam D. Chavez
Film God

Posts: 2153
From: Martinez, CA USA
Registered: Aug 2003

posted 02-24-2014 10:05 AM

Saw this on the wire just a few minutes ago. I guess this should be on industry news but it won't let me start a new topic.

Interesting development, maybe a little late in the game.

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Antti Nayha
Master Film Handler

Posts: 268
From: Helsinki, Finland
Registered: Oct 2008

posted 02-24-2014 10:13 AM

RTT News article:

quote:
Dolby To Buy Doremi For $92.5 Mln Cash

2/24/2014 9:31 AM ET
Dolby Laboratories, Inc. (DLB: Quote) Monday announced a definitive agreement to acquire Doremi labs, a provider of digital cinema video playback solutions, for $92.5 million cash, with an additional $20 million in contingent consideration that may be earned over a period of 4 years.

Kevin Yeaman, CEO of Dolby, said, "Dolby and Doremi Labs have complementary technology expertise and solutions. Together we'll be able to advance the pace of innovation and create the kind of cinematic experiences that drive movie attendance for our exhibitor partners."

Dolby does not the expect the transaction to have a material impact on 2014 revenue and adjusted results. The acquisition is expected to close by the end of 2014.

Click here to receive FREE breaking news email alerts for Dolby Laboratories and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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Marco Giustini
Film God

Posts: 2713
From: Reading, UK
Registered: Nov 2007

posted 02-24-2014 10:18 AM

wow

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 02-24-2014 10:48 AM

I'm not sure how acquiring Doremi will help or even possibly hurt Dolby (such as loading them down with debt). Does Doremi have some key patents and unique technology Dolby wants? Or could this be about harmonizing server designs and making certain features more standardized?

Doremi has a really large install base and that could translate to a larger customer base for Dolby. However, if a theater has to replace an existing Doremi server what's going to stop them from buying new servers from one of Dolby's competitors?

In the broad sense this deal looks to me as little more than Dolby buying out a competitor. I don't know enough about the specifics to really understand it.

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999

posted 02-24-2014 11:11 AM

It seems to me that it makes Dolby the #1 installed base of DCinema servers world wide. While there is nothing to stop one from going to a competitor if you dislike the Dolby brand but your options, at the moment, are pretty slim. In the USA...that gets you GDC and to a much lesser extent Christie, Qube, USL and, of course, Sony. However Sony and Christie are pretty tied to the projector.

I'm sure there will be lots to talk about at CinemaCon.

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Sam D. Chavez
Film God

Posts: 2153
From: Martinez, CA USA
Registered: Aug 2003

posted 02-24-2014 11:22 AM

Maybe there another shoe that has not yet dropped.

As to debt, I'm surprised to see the seemingly low sale price. Don't think this will strain Dolby's bank account.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 02-24-2014 11:49 AM

quote: Sam D. Chavez
I guess this should be on industry news but it won't let me start a new topic.

The industry news forum might as well be deleted since all the "news" gets posted into one of the regular forums anyway these days.

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Mark Gulbrandsen
Resident Trollmaster

Posts: 16657
From: Music City
Registered: Jun 99

posted 02-24-2014 12:08 PM

Sad that they had to buy their way into that spot. In the old days when Sam worked there they were #1 without having to resort to buying out other companies.

Mark

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Sam D. Chavez
Film God

Posts: 2153
From: Martinez, CA USA
Registered: Aug 2003

posted 02-24-2014 03:44 PM

Oh stop!

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Terry Lynn-Stevens
Phenomenal Film Handler

Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012

posted 02-24-2014 05:25 PM

quote:
Sad that they had to buy their way into that spot. I

quote: Marco Giustini
wow

I am not too surprised, the Dolby of the future will be significantly different than the Dolby experienced by those in the 1970's, 80s, 90s, etc.

Eventually Dolby will transition into a "Sight and Sound" company, Dolby is already on record stating that future growth in the mobile market is critical for Dolby. It is interesting that, Dolby Digital and Dolby Digital Plus technologies are not mandated as an industry standard for mobile devices.

I have to say, it is a good move for Dolby.

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Lyle Romer
Phenomenal Film Handler

Posts: 1400
From: Davie, FL, USA
Registered: May 2002

posted 02-24-2014 08:53 PM

Maybe they think that access to the installed base of Doremi servers will help with getting Atmos into more locations? Otherwise, I don't really see the value in this after most of the changeover to digital cinema has already happened, i.e. there isn't much growth in the DC server market.

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999

posted 02-25-2014 05:42 AM

What is the life-cycle of the DCinema server? That will be the gift that keeps on giving...providing they innovate enough they don't lose what they have.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 02-25-2014 12:12 PM

Considering these servers have a lot of the same kinds of components that go into personal computer types of devices I think a theater would be doing great to get 10 years of life out of a server.

So many things in a server or other kind of computing device can fail after so many years. Companies like Dolby don't make all the individual chips, hard discs and other stuff that go into these things. They're going to be able to provide replacement parts for only so many years before the device is obsolete. The companies who make the chips and other pieces of hardware make those specific pieces for only so many years. Then they move onto entirely different product lines.

D-cinema servers fall into a fairly "mission critical" category. They have to be operational otherwise shows will be lost. So it would probably be wise to replace an aging server after such an amount of time where it's still running but starting to become a liability. If a theater intends to run servers years past their appropriate retirement age they had better have some spares with lots of working parts laying around.

We deal with this same issue when it comes to maintaining old LED-based electronic variable message centers. After about 7 or 8 years the display is pretty much done. If you or the company who made the display don't have a lot of spare parts available the unit will simply have to be replaced. Lots of people who went cheap buying no-name brand Chinese LED signs have had time bite them hard in the ass. We're able to get more life out of LED signs by going with American companies who've been around for a long time (like Daktronics and Time-O-Matic).

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David Buckley
Jedi Master Film Handler

Posts: 525
From: Oxford, N. Canterbury, New Zealand
Registered: Aug 2004

posted 02-25-2014 01:45 PM

quote: Sam D. Chavez
I'm surprised to see the seemingly low sale price.

I suspect that Doremi were more keen to be bought than anyone was to buy them. Further, I suspect the original investors need a way to get their money out of Doremi, and the choices are go public, IPO etc, or get bought. For a company of Doremi's size, the latter is more cost effective, listing isn't cheap.

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Carsten Kurz
Film God

Posts: 4340
From: Cologne, NRW, Germany
Registered: Aug 2009

posted 02-25-2014 02:10 PM

quote: Lyle Romer
Maybe they think that access to the installed base of Doremi servers will help with getting Atmos into more locations?

ATMOS support for Doremis is already working (same as in Christies IMB). Wether that was accomplished isolated from this deal, or wether it was part of this deals preparation talks...

In order to gain market, Dolby would have been completely braindamaged to make ATMOS an exclusive option on their own servers only. Once they had a solid ATMOS API, they sure did support other manufacturers freely.

Given the nature of ATMOS, basically every server manufacturer should be keen to implement ATMOS streaming.

That said - Doremis IMBs so far have been the only option to decode Auro 3D. Now will 'Dolby's Doremis' support Auro 3D in the future?
Was this buy, among other intentions, a cheap trick to finish with Auro 3D as well?
Dolby did the same to immSound just after their ATMOS launch...

Entirely possible that Dolby's proprietary and monopolistic object based audio system vs. competition could become a problem as well when this deal will be checked by market/financial supervision before finalization. Probably few will care, but NATO will not be amused as well...

BTW - does the Dolby IMB support stacked dual IMB and dual IMB HFR configurations?

- Carsten

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