For decades, Dolby Labs has been the undisputed leader in audio and video formats. Even when people can’t necessarily describe why a movie sounds better in Dolby Atmos or looks better on their TV when it’s presented in Dolby Vision, they know that these are the labels to look for when buying a new TV or soundbar, or when signing up for a streaming service like Netflix. Dolby’s near ubiquity is a testament to its technological innovation and masterful marketing. It’s hard to find another example of a company that makes no physical products, yet commands such instant brand recognition.
But Dolby’s days as the audio/video format king look increasingly numbered as companies ramp up their adoption of free alternatives.
Royalties must be paid
The lion’s share of Dolby Labs’ profits comes from licensing its technologies to manufacturers and service providers. The sale of every TV, streaming device, or soundbar compatible with content created using a Dolby format results in a small payment to the company. The exact amount per unit is known only to Dolby and its licensees, but cumulatively it’s worth hundreds of millions.
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Since the majority of the consumer electronics industry is built on razor-thin margins, every penny counts. This has created incentives for players to band together to develop royalty-free alternatives to Dolby’s formats.
The video format death match
In the world of video, Dolby Vision is the most popular flavor of dynamic HDR — a version of high dynamic range technology that allows for more brightness than standard HDR, in addition to scene-by-scene grading of color and contrast.
It’s widely used on 4K UltraHD Blu-ray discs, and virtually every HDR-compatible streaming service includes titles presented in Dolby Vision.
However, not long after Dolby Vision debuted, a consortium led by Samsung developed HDR10+, an open-source and royalty-free alternative. Adoption of HDR10+ was slow at first, but with Netflix’s recent announcement that it intends to offer HDR10+ for all HDR titles by the end of 2025, Dolby Vision’s dominance is coming to an end.
It’s an especially important victory for Samsung. Not only did the Korean juggernaut spearhead the creation of HDR10+, it also steadfastly refused to license Dolby Vision for any of its TVs.
Atmos under attack
Dolby Atmos is Dolby’s other key content technology. Atmos is a spatial audio format that enjoys massive adoption across movies, TV shows, and most recently, music recordings under the Dolby Atmos Music brand.
Since audio content, devices, and services far outnumber their video counterparts, and since Atmos has thoroughly beaten its main rivals (DTS:X and Sony 360 Reality Audio) in the adoption race, Dolby Atmos has become synonymous with spatial audio.
A few years ago, Samsung decided to take aim at Dolby Atmos, hoping to repeat its HDR10+ success.
This time, Samsung enlisted the support of Google and the Alliance for Open Media, whose members include tech heavyweights like Apple, Amazon, Microsoft, THX, and Nvidia. The result is a new open-source spatial audio format known formally as IAMF. But since that’s a terrible label, IAMF was given a catchy new brand name at CES 2025. Going forward, it will be known as Eclipsa Audio.
Eclipsa Audio, according to Samsung and Google, lets anyone create spatial audio for free. If you’re a professional who uses industry-standard software like AVID Pro Tools DAW, there will soon be free Eclipsa plugins. But perhaps more importantly, any manufacturer can support Eclipsa royalty-free on their audio products.
As with HDR10+, you can expect Eclipsa adoption to be slow at first. And, once again, Samsung is leading the charge on the hardware front. Its latest flagship soundbar, the HW-Q990F, is the first with Eclipsa compatibility.
A free future?
Despite these threats to Dolby’s dominance, don’t expect to see Dolby Vision or Dolby Atmos disappear anytime soon. These formats have a big head start, and as I indicated earlier, public awareness of Dolby’s brands can’t be underestimated. The presence of those brands on a product’s box (or the product itself) is now seen as a promise of audio or video quality, even when buyers don’t have access to the content needed to experience the benefits those technologies offer. That’s a big reason for companies to continue licensing Dolby’s tech.
It will be years before folks associate that same level of quality with HRD10+ and Eclipsa, if in fact they ever do. And for that to happen, some serious marketing firepower will need to be employed. If Apple, for instance, were to back these technologies the way it has done so far with Dolby Vision and Dolby Atmos, it could be a game changer.
Dolby is also a savvy player. Even as free alternatives threaten to erode its market share, it’s continuing to innovate. One of those innovations is Dolby Atmos Flex Connect, a new way for TV manufacturers to provide wireless speakers that can be placed anywhere in a room — without the need for a connected soundbar — and still provide an immersive experience.
The good news is that competition appears to be doing what it’s supposed to do: increase choice for buyers while acting as both a carrot and a stick to drive the next set of technical achievements — even if you may have to learn a few new tech terms before you buy your next TV.