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

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Operator

And we’ll take our next question from Ralph Schackart with William Blair.

Ralph Schackart, William Blair

Good afternoon. Just looking at the licensing guide up for the year, just curious what the factors were behind that? Was it mainly broadcast driven? And then maybe just sort of bolting on to that question, Lewis you called out Voice and the other category just curious is that sort of contributing on a measurable basis now to the financial results? Thanks.

Lewis Chew, Executive Vice President and Chief Financial Officer

Hi Ralph. Yes so in the quarter if I look at all of our different markets, the two that actually ended being on the positive side as I reported was broadcast and mobile and then on the minus PC and net net what we’re seeing for the full year is that the net positive wins over the negative. Yes broadcast is clearly our most steady growing business right now. We actually have a slight uptick in the year versus our original expectations on mobile. And then second half, what was second half of your question again Ralph?

Ralph Schackart, William Blair

On Voice, is that at a point now where — yes.

Lewis Chew, Executive Vice President and Chief Financial Officer

Yes so Voice, we did see revenue in the other category this quarter and as I said probably before, we’ll keep that in other until it becomes big enough to breakout, similar to what we did with mobile when it got to a significant enough percentage, we broke that out. A chunk of that revenue came from contractual licensing arrangements we had with our customer and I think it will be further down the road when we see more revenue coming purely from the revenue share model that we have.

Ralph Schackart, William Blair

Okay, thank you.

Operator

And we’ll take our next question from Jim Goss with Barrington Research.

Jim Goss, Barrington Research

I’ve got a few about Dolby Vision and the Dolby Cinema. First, with Dolby Vision, does it complement or compete with 4K and 8K advancements and my understanding is its broader color palette, more subtleties. So does it just basically make greater use of the greater resolution and that’s how this form works?

Lewis Chew, Executive Vice President and Chief Financial Officer

Great question. It is complementary to resolution. It could be complementary to 2K, 4K, 8K. It’s not dependent on a particular display type. The way to think about it is that in for many years now, the industry has been capturing more dynamic range — more contrast, wider color gamut, than consumers have been able to see on their displays at home or in the cinema. And so most of that information — the higher dynamic range was getting left on the cutting room floor to fit it into the formats for delivery that were developed in many cases decades ago. So what Dolby Vision does, is it allows one to master the content, to take advantage of the full dynamic range of the color gamut, it allows one to deliver that content through OTT, through broadcast, through the cinema delivery chain. And then it allows you to play it back on the other side, bring it to full life including for TV displays being able to do the display management, to take that signal and optimize it for the capabilities of that display. I think it opens up a really exciting area of innovation for TVs because it is absolutely complementary to resolution, 3D, all the other features that we’ve talked about. And we’ve been working on this for really over five years, probably about seven years now. That’s when our team first really focused on the area of HDR and contrast as the dimension that could have the single biggest impact on the quality of viewing experience. And that’s what we are so far seeing in our interactions with the creative community and with the initial what we’re seeing on displays.

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