Dolby Laboratories, Inc. (DLB)’s First Quarter 2015 Earnings Conference Call Transcript

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Jim Goss, Barrington Research

Okay, and would it incorporate or obviate the need for 3D? I know you’ve had a position in 3D, it’s really sort of taken a back seat I think lately. And once you got the subtleties that Dolby Vision can create, does it create the depth perception that you might need without going to 3D and therefore that would change that dynamic?

Lewis Chew, Executive Vice President and Chief Financial Officer

So it is as I said earlier; it is a complementary dimension to depth. I will say that when done really well with high contrast ratios and wider color gamuts you begin to proceed depth and it’s not 3D per se but the brain response to the higher contrast details and the higher color range by beginning to perceive more depth in the picture. So that said, it’s complementary but I think that we believe that this is a real wow factor as people think about the next generation of theatrical and consumer delivered content.

Jim Goss, Barrington Research

Okay, finally when you mentioned the rev share mode, do you envision the premium price for Dolby Vision-enabled films or Dolby Cinema with that plus Atmos? Or do you think it just sort of works into the model over time and that you think the theater owners would be happy enough to have this imaging that they would share some of the tech price.

Lewis Chew, Executive Vice President and Chief Financial Officer

Well we do see this as being an offering in what’s known as the premium large format market and that market is characterized by higher prices than your standard screens. In the case where somebody is converting an existing PLF to a Dolby Cinema, I can’t really speculate on whether they would further increase the price or not, and I think in the case with our converting, creating a new PLF we would expect that would be at a premium price. That is part of the value proposition is to create a highly differentiated experience and that moviegoers will take notice of and want to experience, want to come back to and creators are going to be excited about taking advantage of.

Jim Goss, Barrington Research

Alright, thanks very much.

Operator

And we’ll take follow up question from Paul Coster with JPMorgan.

Paul Coster, JPMorgan

Hey thanks so much. The guidance for the year and the quarter suggests to me that we’re seeing over the last few quarters the year-on-year revenue growth decline and the rate of growth decline. But it looks to me like the guidance sort of looks for a re-acceleration in the second half of the fiscal year. Is that correct? And if so what you think the drivers of that re-acceleration are?

Lewis Chew, Executive Vice President and Chief Financial Officer

I think that’s a fair question Paul, the level of precision you’re referring to is a little tricky, because the number didn’t move around that much. Our guidance that we’re giving this quarter for the full year the same as we gave last quarter recognizing of course that this quarter we fell slightly short of that. So I don’t know that there is a big change, I think I had an earlier question about what was causing us to feel more optimistic and what areas were going up and I said that broadcast continue to be a strong area, that mobile is a little bit stronger for us this year as we sit here right now than we thought at the beginning of last quarter. It’s really hard for me to characterize anything as re-acceleration, I do think as we work our way through the year, there is more opportunity for some of these things that we’ve already talked about, that Kevin alluded to, to start showing revenue.

In fact I had that specific question on voice and it’s really hard for me right now to give a lot of specifics on voice because it is lumped into other. But clearly we see voice as being something going forward as fundamentally only a growth story. There is really nothing to come down from, it’s a secular positive in every little shape for us. And product is something right now that it’s a little bit lumpy, because we just acquired another company. We’re very optimistic going forward about what we can sell, but in the near-term here we’ve actually throttled back a little bit for the year our product expectations until we work our way for the transition. Maybe if we get further down into the year Paul, maybe easier for me to address that as we see more of the year play itself out.

Paul Coster, JPMorgan

Thank you. Thank you very much.

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