When Dolby Laboratories (NYSE:DLB) first announced Dolby Vision almost exactly three years ago, it represented an exciting potential expansion of the company’s reach. Of course, Dolby still strives to ensure its core audio technologies play a central role fulfilling the world’s entertainment needs. But Dolby Vision promises to supplement its solutions by delivering arguably the most compelling true-to-life visual experience ever by closely mimicking the way our eyes see the world.
But even though Dolby Vision has secured a handful of solid design wins since then from content creators and TV manufacturers, 2017 may prove to be the long-awaited inflection point for the company to achieve broad industry adoption.
A bright start to 2017
Dolby issued several press releases on Wednesday detailing a trio of encouraging Dolby Vision developments. First, Dolby revealed that Lionsgate, Universal Pictures Home Entertainment, and Warner Bros. Home Entertainment have each announced plans to release content mastered in Dolby Vision for their respective Ultra HD Blu-ray titles this year. Dolby senior VP Curt Behlmer lauded the commitments from all three companies as a “major milestone for expanded choice and accessibility for consumers,” noting that its availability on Ultra HD Blu-ray allows Dolby “to scale faster to meet the growing demand for Dolby Vision content globally.”
But Dolby Vision content is of little use if hardware manufacturers aren’t on board. To that end, Dolby also announced that Sony‘s (NYSE: SNE) newly unveiled premium 4K high-dynamic-range (HDR) TV line will feature Dolby Vision HDR technology. This development builds on Sony’s dedication to Dolby’s newest technology: Around this time last year, Dolby announced a similar content agreement with Sony Pictures Home Entertainment to release the industry’s first 4K Ultra HD Blu-ray titles mastered in its Dolby Atmos audio standard.
Sony Visual Products deputy president Kazuo Kii stated that his company is “thrilled” to incorporate Dolby Vision in its latest premium TVs, explaining, “Dolby Vision enables dramatic imaging, incredible brightness, breathtaking contrast, and a fuller range of colors that preserve artistic intent.”
Finally, Dolby and LG Electronics (NASDAQOTH:LGEAF) announced that LG’s 2017 line of OLED TVs will be the first to support both Dolby Vision HDR technology and Dolby Atmos audio. This is naturally a great win for Dolby Vision, even if unsurprising, as it marks an extension of LG’s initial adoption of the technology in its high-end OLED TVs last year. LG’s acceptance of Dolby Atmos — a technology to which Dolby has increasingly looked to drive growth in recent months — along with the fact that affiliate LG Display recently confirmed plans to roughly double its OLED TV manufacturing capacity to 2 million units in 2017 — indicates that this partnership is perhaps the most promising among Dolby Vision proponents to date.
More work to do
That doesn’t mean you’ll find Dolby resting on its laurels now. Dolby still has plenty of work to do in its quest to re-accelerate growth given the ongoing declines of its legacy consumer-electronics licensing business.
But every little bit of progress to that end helps. And if newer technologies like Dolby Vision continue to do their part, I suspect Dolby stock will continue to deliver market-beating returns for investors going forward — even with shares up an impressive 43% over the past year as of this writing.
Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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