Dolby Targets the Conference Call; Company to Add Speakerphone to Its Effort

Dolby Targets the Conference Call

Company to Add Speakerphone to Its Effort

DON CLARK

March 13, 2014 5:30 p.m. ET

Dolby Laboratories Inc. DLB -1.05% built a brand by enhancing sound in recorded music, movies and television shows. Now it’s targeting a fixture of the business world—the conference call.

The San Francisco-based company, facing pressures to diversify, has been working to improve sound fidelity and isolate individual speakers’ voices during meetings conducted over the phone. Dolby last fall disclosed its technology, along with a conferencing service offered through BT Group BT.A.LN -1.09% PLC, and on Friday is unveiling updates that include a speakerphone that Dolby hopes to deliver later this year.

Dolby has joined a crowd of companies that are trying to profit from the continued growth of conference calls despite the rise of video-based alternatives. Some also are exploiting Web-based technologies and the related shift of callers to personal computers and smartphones.

Mike Hollier, an auditory science expert who joined Dolby as chief technology officer of its new communications division, said face-to-face meetings are more intelligible because of visual cues and people’s two ears, which help distinguish where sounds are coming from. He said most traditional conferencing offerings compress the sound of voices in ways that strip out useful clues such as who is talking.

Dolby developed new conferencing software, some of which runs on BT’s servers; accompanying software is installed on PCs or other devices equipped for audio calls. Dolby and BT on Friday also plan to unveil smartphone apps to work with the new service.

In a demonstration at Dolby’s offices, the company showed off a prototype of its speakerphone, a circular device with a touch screen and microphones that help distinguish the direction of people talking. A person calling in on a smartphone can also notice the sense of movement as a speaker stood up and walked across the room.

In user tests, the company asked people to perform sets of tasks that were easy in face-to-face meetings, but declined to about 30% efficiency in a conventional conference call, Mr. Hollier said. Their efficiency rose to the “high 60s” after using Dolby Voice, he said.

“It is so clear. It picks up everything,” said Rich Lappenbusch, president of StratusCore, a Seattle-based digital-media services company that tested the Dolby-based BT MeetMe service and is now a Dolby Voice customer. “It reminds me of the first time I saw HDTV.”

The conferencing-technology business has many players, including Cisco Systems Inc.CSCO -1.37% and Polycom Inc., PLCM -2.00% and competition among free and paid service providers keep pushing per-minute charges down.

Analysts at Wainhouse Research estimate the number of conference-call minutes offered by service providers will reach 114 billion this year, up more than 50% since 2010. But world-wide revenue has been close to flat since 2010 at about $4.1 billion, the firm said.

Some rivals have also been pushing their own improvements in sound quality, questioning whether customers that test the alternatives will prefer the new Dolby Voice offering.

“Time will tell, but I think they face a pretty strong headwind,” said Jeff Rodman, a Polycom co-founder who holds the title of fellow and chief technology evangelist.

Dolby, whose founder Ray Dolby died last year, has faced pressures to move into new markets as licensing revenue has slowed from products such as DVDs and PC software. The company, founded in 1965, has sold hardware to studio professionals but more often licenses technology to others.

In the case of its new conference phone, expected to be priced at around $1,600, Dolby executives said they wanted at least initially to control all of the audio experience.

“We think we’re bringing tremendous differentiation to an industry that has heard about nothing but price per minute,” said Kevin Yeaman, Dolby’s president and CEO. “This business could be as big as any of our existing businesses.”