A scientist in Hollywood? That鈥檚 Californian Ray Dolby, possibly the only researcher ever to win an Academy Award and an Emmy. Dolby is a household name thanks to the hiss-free sound system in your living room and in 20,000 cinemas worldwide. Before that he was part of the team at US company Ampex which demonstrated the first practical video recorder in 1956. For more than 30 years, Dolby Laboratories has led the field in sound systems. But at 67, there are rumours that Dolby is thinking of selling up and calling it a day. Barry Fox, who鈥檚 known him since he drove from India to start his first company in London, talked to him at his San Francisco HQ.
What took you to India?
I had spent 12 years in academia, in the US at San Jose State and Stanford, and here I was, somewhere around 30, a Fellow of Pembroke College, Cambridge, with a PhD in physics, and in a very favourable situation academically if I wanted to make that my future life. But I wanted to do other things. I have this love of travel and sense of adventure. I also had a little do-gooding streak in me. In the Sunday papers at that time-we are talking about 1962-there would be big display adverts for development projects in places like Egypt, India and South America. One of them caught my eye. It was put there by UNESCO, to work on a project in India.
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What did you do there?
I was to become a so-called UN expert to help the Indian government. My task was to study their electronic scientific instrument industry. Indian industry did not trust Indian instruments. So they wanted the US, the UK and the UN to give them money to buy American, British and Swiss instruments. The task of the new institute would be to give potential customers more trust in Indian instruments by improving them where necessary. On reflection, I realise I was involved in a socialist endeavour-the idea that central planning could make things better, when in fact small companies wanted freedom from bureaucracy, red tape and import restrictions.
So how did you become interested in sound quality?
I was making tape recordings of music and noise was a burning issue-it was the only unsolved problem. People had been working on noise reduction systems since the mid-30s and I was constantly thinking about how to overcome this problem. I took my recording equipment to India and did more recordings there. In my spare time I鈥檇 go to the library and research what had been done before. It suddenly hit me that all of these previous workers had been barking up the wrong tree. They were trying to solve a problem of getting rid of an irritating noise that was an order of 100 or even 1000 times smaller than the maximum size of the signal that they wanted to record. Their approach was to compress the signal during recording by squashing down the high levels, and then during playback expand them again. But an unfortunate by-product of manipulating these loud signals was that you introduced distortions. So, I said, if the noise you are trying to get rid of is so small and the signals related to that noise are so small, why not have a separate path for those small signals and let the loud sound go straight on through? I was still in India when I figured it out.
Instead of charging a royalty on the music, or on the chips, you opted to license your technology to manufacturers of tape decks and insisted they must use the Dolby name on any product that uses Dolby technology. Why did you do this?
It was very difficult to get companies making integrated circuits to pay royalties. First of all, they had never paid a royalty in their lives. And also the integrated circuit cannot exist on its own. It has to have external components to make it useful. So we came up with the concept of considering an integrated circuit as a glorified collection of discrete components. The licensee is the party that creates the final working embodiment. So that would be the tape deck manufacturer. We have used that concept ever since then. We also had the issue of pre-recorded tapes. Would it make sense to extract a royalty on the cassette or count on the sale of cassette decks to bring us our income? I decided to go that latter route. I knew it would be difficult to collect royalties from the cassette manufacturers both in concept and in practice. There are so many in such a lot of places around the world. How are you going to get at them? How can you count them? It鈥檚 just not practical.
You believe that companies shouldn鈥檛 be pressured by shareholders into commercialising technologies before their time. You鈥檝e vowed never to touch other people鈥檚 money-especially Silicon Valley鈥檚 and Wall Street鈥檚. Why?
The licensees figure that we can be trusted to treat them fairly and to keep their secrets. So we have stayed independent of other electronics companies, financial institutions, motion picture companies, record companies, and all the consumer equipment manufacturers. This is why we can license. That鈥檚 why I had to think of ways of keeping the company independent while still taking it to the next stage; not to sell out to anybody else, but to go public at a time when the company is strong enough not to fall victim to powerful outside influences, like investment bankers and that kind of thing.
What made you feel that way?
I had early experience of how these people try to manipulate you. I had got my fledgling licensing programme off the ground in the beginning of 1967. I went to the Bank of New York and said I needed to borrow some money. They invited me to lunch in the directors鈥� dining room and treated me very well. One of the bankers next to me leaned over and said, 鈥淵ou know we have discussed the whole thing. We have it all figured out, we will give you the money but you鈥檝e got to drop your licensing activities.鈥� I thought, wow, these guys don鈥檛 understand a thing. I tried to explain to them what I was doing and what the potential might be. But in the end I said, let鈥檚 forget about it, I鈥檒l figure out how to deal without you. And I did-by tightening my belt and taking things more slowly.
Why are you thinking of taking your company public now?
One goes through a sort of life cycle. I have had my years of education, I have been in the army, I have started my company, taken it through various phases, seen it flourish and do useful things. I have to finish this process and think about the future because of US tax laws, death taxes and so on. I am almost 68 years old and I don鈥檛 think I am going to die very soon. I try and take care of myself and I may have another 20 or 25 years to go, but I don鈥檛 want to take a chance on that. If I disappeared now it would be tough for the company to go on. There would be a lot of disorganisation and things like that. So I am just trying to care for the future. We will still be independent and continue to operate in much the same mode. There will be shareholders who will hold us accountable but they won鈥檛 have the same influence that, say, an investment bank would have, with a significant stake in the company. We shall do it when the economic conditions are right. Certainly not now. We seem to be going into some kind of a recession and I have been surprised it hasn鈥檛 come sooner.
Is there any point in being in the sound innovation business any more? The overall quality is so good that consumers are unlikely to detect any improvements.
Sound can now be recorded so well that the human ear cannot hear any difference between the original signal and the reproduction. So I feel it is almost the end of the line in terms of improving quality. The only thing remaining now is adding versatility, utility, providing convenience, accessibility, getting the price down and things like that. Those are worthwhile endeavours, but for me it鈥檚 not as exciting as solving a basic problem like recording a picture on tape or solving the noise problem of magnetic recording.
Is there anything you wished you could have invented?
I have often thought I would have made a great 19th century engineer because I love machinery. I would like to have made a better steam engine or invent the first internal combustion engine, or work on the first car. All my life I have loved everything that goes-bicycles, motor cycles, cars, jeeps, boats, sail or power, airplanes. I just regret that I was born in a time when most of these mechanical problems had already been solved.
Talking of neat inventions, why do you think the audio cassette has lasted so long? And does it have a future in the digital world?
I think one reason the analogue audio cassette is still going strong is that people perceive that it鈥檚 good and useful so don鈥檛 want any change because change is disruptive. They have to read a new instruction manual for one thing. I鈥檝e been studying German in the past four years just for fun and I鈥檝e been using CDs and cassettes. The cassette is very useful. It remembers where you left off, so you can start up again. With a CD you have to skip through, figure out where you were and it鈥檚 a pain.
Will any of the new audio/video formats last as long? Which has the longest staying power?
DVD seems like a winner. MiniDisc had a harder time because it seemed to be something that did pretty much the same thing as what we had already and nobody could detect a perceptible advantage.
You won an Oscar in 1989 for your personal contribution to motion picture sound.What was it like?
I was very proud. The Oscar has a very long tradition in the motion picture industry. To be part of that tradition is very satisfying.
Scores of films using Dolby technology have won Oscars for best achievement in sound. But I鈥檝e heard you鈥檙e not much into movies or pop songs. Is that true?
I prefer classical music, chamber music, opera, but I have enjoyed some `60s and `70s rock. The heavy metal kind of thing is just not my cup of tea. So-called modern music has a lot of dissonance-I don鈥檛 like that because I think it goes against the laws of physics. Many Hollywood movies are made for teenagers. That鈥檚 the target audience and sometimes it鈥檚 just a little too violent, loud and just a little nonsensical to be satisfying to me. I prefer movies that have more of a focus on human relationships and things like that. But I also like a good adventure movie. I now fly aeroplanes and helicopters. That鈥檚 part of the adventure streak in me.
But would you trade your Oscar for a Nobel?
Certainly my life would have been different. I worked in the field of X-rays for five and a half years and you are dealing with very bright specialists when you give papers at conferences and write papers for review. But after a while you realise that there are only a handful of people in the world who are really interested in what you are doing, and even though it is very satisfying to go to these conferences and interact with these people, there really are very few of them. So I suppose I would probably prefer the Oscar to the Nobel.