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Dolby Inks Deal with Microsoft

By Andy Sim - on 4 May 2012, 3:00pm

Dolby Inks Deal with Microsoft

Image credit: Dolby Labs Inc

From stereo to surround sound, and from real-time encoding to discrete channel codecs, Dolby Labs Inc has probably done them all. More recently, Reuters reported that Dolby Labs has just signed an agreement with Microsoft. This deal would enable Microsoft to integrate Dolby's products into their upcoming Windows 8 operating system. More precisely, Microsoft will include two-channel encoding and Dolby Digital Plus 5.1-channel decoding in Windows 8. However, it won't be a free ride though. Original equipment manufacturers and PC makers will have to pay a base royalty fee to Dolby for use of its products, according to John Coulings, Dolby's VP of marketing. The firm will receive one royalty payment per device containing related Dolby technologies.

Speculators have also been wondering about the state of Dolby's stocks as well ever since the company hinted that they weren't going to be part of Windows 8 last year. And not surprisingly, Dolby's shares took a bump of 19 percent (to US$44.60) after the partnership with Microsoft was announced, and closing at US$37.63 on Thursday on the New York Stock Exchange. Dolby's CEO, Kevin Yeaman, also added that each licensed copy of Windows 8 will be enabled to play all online content with Dolby encoding. However, OEMs will have to fork out more for playback of media found on optical discs. Actual royalty figures weren't disclosed, unfortunately. Lastly, the audio firm also mentioned that all video clips recorded with Dolby Digital Plus will be fully compatible with Windows 8 on tablets and personal computers.

Source: Reuters and Forbes