M+E Daily

Dolby Execs: Dolby Cinema, Voice Among Growth Drivers in First Quarter

Dolby’s growing Dolby Cinema premium movie theater offering and Dolby Voice business communications solutions were among several bright spots for the company in its second quarter (ended March 30), according to company executives.

Dolby Cinema and Dolby Voice were among the growth drivers for Dolby’s products and services business segments in the quarter, helping revenue in those segments rise to a combined $28.2 million from $25.9 million a year ago, CFO Lewis Chew said April 24 on an earnings call.

Broken out, products revenue grew to $22.7 million from $20.7 million, while services revenue increased to $5.5 million from $5.1 million. Licensing revenue – the largest part of Dolby’s business – jumped to $273.1 million from $241.6 million.

The company expects product revenue will grow this year, “driven by higher volume from Cinema products and from Dolby Voice,” Chew said.

Q1 was “another great quarter for Dolby Cinema content,” CEO and president Kevin Yeaman said, pointing to the hit theatrical releases “Black Panther” and “Ready Player One” as examples of recent movie releases that used Dolby’s premium theater experience.

The “overall content pipeline continues to grow” for Dolby Cinema, “with over 165 titles” announced or released incorporating Dolby Vision High Dynamic Range (HDR) and Dolby Atmos immersive sound technology to date, he said, referring to two of Dolby Cinema’s key components.

“We continue to see support from all major studios and last week Disney announced 20 titles in Dolby Atmos and Dolby Vision, adding to a growing slate of movies to be shown” at Dolby Cinema theaters, including two upcoming “Star Wars” titles and two “Avengers” films, he said.

Dolby also recently announced two new Dolby Cinema theater partners, he noted. Jinyi, one of the largest cinema chains in China, will be rolling out 20 Dolby Cinema screens. “This adds to our presence in the growing Chinese market, where we now have seven Dolby Cinema partners,” Yeaman said. Shochiku Multiplex Theaters, meanwhile, announced its plans to roll out the first Dolby Cinema in Japan.

The number of Dolby Cinema locations has “grown rapidly over the past year, with 143 now open compared to about 90 a year ago,” Yeaman said, adding: In total, we have over 380 Dolby Cinema locations open or committed around the world.”

The company introduced Dolby Voice in 2013, a move that marked its entrance into the business communications sector. Dolby, on March 8, announced a camera product that serves as a companion device to its earlier Dolby Voice conference phone. The combined products are the Dolby Voice Room video conferencing solution.

“In addition to all of the benefits of the Dolby Voice audio experience, Dolby Voice Room introduces new innovations to the video experience,” Yeaman said, adding: “This combination creates an experience that more closely resembles an in-person meeting. The Dolby Voice Room is easy to set up and the initial reaction from the market has been very positive.”

Dolby’s initial “go-to-market partners” on Dolby Voice Room are cloud-based video conferencing service provider BlueJeans and video conferencing hardware and software company HighFive, he pointed out. “We think this product will address a broader set of customers in the growing huddle space,” he said.

As Dolby stressed at the NAB Show earlier this month, it also continued to gain momentum with Dolby Atmos and Dolby Vision, Yeaman also said on the call.

Dolby expects to “double revenue from new initiatives this year,” which would “put it at around $120 million,” he said, adding: “We are getting contribution from all three of the initiatives — including Voice, Dolby Cinema and consumer imaging, which … includes both Dolby Vision and our imaging patent licensing programs. I talked about a number of the wins on the call today, but we’re seeing good contribution from all of them.”

Total Dolby Q1 revenue grew to $301.4 million from $267.5 million a year ago. Profit grew to $70.6 million (66 cents a share) from $50.6 million (49 cents a share).