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Agoura Hills, Calif. %u2014 Surround sound technologies developer DTS said it has received the approval of its board of directors to sell its professional cinema and digital images business in order to focus exclusively on electronic components, including licensing branded entertainment technology to the large and evolving audio, game console, PC, portable and broadcast markets.

The cinema and digital images business, which is now known as %u201CDTS Digital Cinema,%u201D will be located in Burbank, Calif., where it will %u201Cfocus on the potentially large and emerging market for digital cinema products and services,%u201D the company said.

DTS stated that it expects the sales process to be completed %u201Clater in 2007.%u201D

At the same time, the company released its fourth-quarter and fiscal year financial results for the period that ended Dec. 31, 2006.

The company reported a $5 million net loss on revenues of $12.7 million for the fourth quarter, resulting primarily from restructuring costs and stock based compensation expenses. That is a drop from the net profit of $1.4 million on revenues of $13 million for the fourth quarter of 2005.

The quarter included $1 million in stock-based compensation expenses, and $3.8 million in restructuring costs.

For the full year, the company reported that net income dropped 61 percent to $3 million on revenues of $59 million, from $7.9 million on revenues of $57 million for the 2005 fiscal year.

The company said full-year results were affected by $3.6 million in stock-based compensation expenses, $3 million in restructuring costs to buy out a commission agreement for licensing intellectual property in the China market, and $1.1 million in non-deductible costs related to the separation of the DTS Digital Cinema business.

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Posted by Chad M Calpito (Member # 3736) on 02-23-2007, 10:34 AM:
 
Good question. I wonder what will happen as well since I, too, use DTS at my location.
 

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Posted by Gordon McLeod (Member # 33) on 02-23-2007, 10:37 AM:
 
I doubt they are going to disappear any time soon
 

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Posted by Dustin Mitchell (Member # 372) on 02-23-2007, 01:42 PM:
 
Yet more fallout from digital cinema. The XD10 can be used with digital installs since it is an all in one, but all other DTS units are pretty much relegated to boat ancchor status now.

[ 02-23-2007, 03:29 PM: Message edited by: Dustin Mitchell ]
 

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Posted by Monte L Fullmer (Member # 2797) on 02-23-2007, 02:24 PM:
 
Agree ... with SCSI drives in the ancient bin area now and getting rather hard to find let alone being pricer that the more common IDE drives.

There is this Service center in New York that might just be now our only venue to service our older 6 and 6D units..esp. with you folks back east with DTS issues..
 

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Posted by Alex Grueneberg (Member # 2652) on 02-23-2007, 02:35 PM:
 
Does this mean the various units will still be supported in the future by just some other company, and we'll still be able to get trailer discs and whatnot?
 

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Posted by Steve Guttag (Member # 268) on 02-23-2007, 02:59 PM:
 
Carl Greenberg (owner of Quality Presentations) has been a factory authorized service center for DTS for some time now...this is not a new change.

I do think that some questions are in order for ShoWest though to see what this new direction means.
 

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Posted by Richard Fowler (Member # 893) on 02-23-2007, 05:44 PM:
 
Even as a stand alone business it will be a large company within the industry with additional new product and services tailored to the market......

Steven Spielburg is a billionare, not from movies, but from video games Perception may be one thing, reality another.
 

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Posted by Mark Gulbrandsen (Member # 72) on 02-23-2007, 06:54 PM:
 
There is a DTS breakfast at Showorst on Tuesday am. I will be there as far as I know.

Mark
 

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Posted by Bobby Henderson (Member # 840) on 02-24-2007, 02:22 PM:
 
Is there a glut of used DTS cinema players on the market? I have to wonder about that with things like Carmike's D-Cinema conversion taking a lot of DTS players out of service.
 

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Posted by Dustin Mitchell (Member # 372) on 02-24-2007, 07:04 PM:
 
To be perfectly honest Bobby the decomissioned players will probably sit at the theatres until doomsday gathering dust.
 

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Posted by Mark J. Marshall (Member # 1409) on 02-26-2007, 11:52 AM:
 
Judging from the Carmike "DTS presentations" that I have experienced... "gathering dust" was the only thing the players were doing anyway.
 

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Posted by Jon Miller (Member # 163) on 02-26-2007, 08:08 PM:
 
Dustin, do you mean to say we won't see DTS-6Ds on eBay for $500 a pop, as with DFP-2000 SDDS systems a few years ago?
 

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Posted by Dustin Mitchell (Member # 372) on 02-26-2007, 09:23 PM:
 
Carmike hoards things. If things are well organized they will end up in Carmike's warehouse in Georgia, where presumably they have a great deal of old equipment. More likely they will sit at the theatres in limbo.

When 6 more screen were added to my theatre in 1997 (making it 12 total) the original 6 auditoriums were upgraded to Smart Mod IIC processors with DTS-6D's. The original sound racks-processors, amps, and all, are still sitting on the floor in the booth. Well, three of them are, the other three were presumabely sent somewhere, proof I guess that some of the old equipment gets used. But I think they were sent off right away, the other three have been sitting there for 10 years. In the other booth we have a whole wall full of surround speakers and stage speakers that came from a closed theatre during the bankruptcy in 2000. We have had several offers from local people (musicians/etc) to buy some of them. All have been refused. In the 6 1/2 years those speakers have been here we have shipped a total of two to other theatres.

There is much more, I could go on. I have three DTS players still in service, with three just sitting around. I did part out one of the spare units back in July and it is now missing all of its drives, but otherwise it works just fine.
 

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Posted by Phil Hill (Member # 371) on 02-26-2007, 11:14 PM:
 
Even if they discontinue the players, I think the players will still command a good price (on eBay?) from all the private film collectors that have a shitload of films w/DTS discs.

It seems like DTS is moving from a hardware company to a paper-pushing (licensing) company... sad...but I guess that's where they figure the $$$ are for the stockholders. I just love accountants...
 

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Posted by Joel N. Weber II (Member # 3530) on 02-26-2007, 11:45 PM:
 
Patents typically expire after about 17 years, which ought to make the DTS patents expire sometime around 2010, after which there might be legal players made by someone other than DTS. Possibly even mostly as generic software that runs on a generic PC with a nice soundcard, although there also needs to be some way for that generic PC to read the timecode.

17 years is a huge amount of time when Moore's Law says that the cost of processing power typically drops in half every 18 months.
 

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Posted by Bobby Henderson (Member # 840) on 02-27-2007, 04:01 PM:
 
I'm not so sure about the 17 year mark, at least here in the United States. Duration of patent protection also tends to vary from one industry to the next. The time span could be longer or shorter. For example, some drugs lose patent protection in as little as 5 years.

If the 17 year mark is correct, that would only apply to the APT-X100 codec used to encode DTS theatrical audio tracks. The DTS CAC codec was developed years later and has been revised a number of times. The DTS-HD audio formats are pretty new. They do have a backward compatible DTS-CAC core subset to allow use of existing DTS decoders, but the "HD" portions are new.

The real problem with APT-X100 and the DTS Theatrical format is the growing irrelevance of it. Who's going to care once the patent expires? It, and other low bitrate, lossy compressed surround formats are becoming obsolescent in both theatrical movie presentation and home theater applications.

Higher bitrate audio, either lossless compressed or uncompressed, is beginning to take over the field. Both Dolby and DTS see the big threat. They're trying to maintain relevance with their Dolby TrueHD and DTS-HD formats. However, little can be done to stop a studio from just using "plain" LPCM 5.1 instead. I don't think any digital cinema releases have been encoded in any specific Dolby or DTS flavored format. I think they've all been LPCM.
 

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Posted by Dustin Mitchell (Member # 372) on 02-27-2007, 07:27 PM:
 
Question, wouldn't the encoding/decoding software that DTS uses be covered by copyright law and not patent law?
 

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Posted by Mike Blakesley (Member # 26) on 02-27-2007, 07:28 PM:
 
University of Washington Q&A page on patents

How long does a patent last?
Utility patents have a life span of 20 years from the earliest filing date of a non-provisional application. Plant and design patents have a life span of 14 years. With the exception of some pharmaceutical patents, only a special act of Congress can extend a patent beyond its term. Utility patents may expire before their term if their owners do not pay the maintenance fees due 3.5, 7.5, and 11.5 years into the term.

Definition: Utility patents cover new processes, machines, manufactured articles, and chemical compositions.

Copyright provides writers, artists, and other creators of expressive works the right to control how their works are used. This right covers the expression of these works, and not the ideas they contain. A work is protected by copyright the moment it is set down in tangible form. Copyrights can be registered with the Library of Congress's Copyright Office, but there is no requirement to register any copyright.
 

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Posted by Dustin Mitchell (Member # 372) on 02-27-2007, 08:18 PM:
 
*fires up Microsoft Word to double check*

Yeah, I thought I heard it in a computer class before but software is copyrighted, not patented, since technically speaking it is 'written'.
 

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Posted by Mike Blakesley (Member # 26) on 02-27-2007, 08:32 PM:
 
So the DTS process would be patented, but the actual code is copyrighted, eh?
 

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Posted by Dustin Mitchell (Member # 372) on 02-27-2007, 08:48 PM:
 
If I understand it correctly, yes.
 

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Posted by Joel N. Weber II (Member # 3530) on 02-27-2007, 09:16 PM:
 
The patent(s) presumably cover the concept of decoding an audio stream in the DTS format, whereas the copyright would cover the exact contents of the ROM chips in a DTS-6 player.

So if someone who understood the generalities of how the DTS encoding works were to write a new piece of software which decodes the same format, that could infringe on the patents if they're still in force, but it wouldn't infringe on the copyright (assuming the author of this new software hadn't been reading DTS's software).

Copyright presumably has the effect that it will be many, many decades before someone other than DTS can legally make copies of DTS's ROM chips without getting DTS's permission first.

In theory, the patent system was supposed to require that the patent disclose enough information that someone could read the patent to find out everything they'd need to know to write new software that would decode the soundtracks, but in practice, the government employees who approve the patent applications are encouraged to approve as many applications as possible, and patent lawyers tend to minimize how much information they disclose.
 

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Posted by Steve Guttag (Member # 268) on 02-28-2007, 09:09 AM:
 
The purpose of a patent is to give the inventor a legal monopoly of their idea/design for a period of time such that it encourages profitability in invention. The 17-year (and I guess it has been upped to 20-years) was designed such that after that period of time, it would become stale technology.

Having an indefinate amount of patent protection could actually stiffle invention since one would be constantly trying to avoid stepping on an ancient patent while trying to improve and bring about changes to old ideas.

In our industry look at Dolby-A and Dolby-SR...they fit the time frame really well...Dolby-A's patent held them until really something better was going to come out anyway....Dolby-SR....now with digital audio...Dolby-SR has been rendered just about completely obsolete right about the 17-20-year mark.

As to writing software...yes it falls into copyright protection.

A piece of software can not infringe on a patent...that is, if DTS has patents on their hardware designs...one could write software to work on DTS' hardware and there is not patent issue. Now if one were to use DTS' code to do it, it would violate their copyright. As anyone that has coded knows...there are many ways to accomplish the same thing...some ways are better than others.

In fact, when I was in college, we had to write software that would mimick the BIOS and DOS interrupts of a PC. All the documentation you were provided is what the DOS (or BIOS) command was supposed to do and what is supposed to be returned to the registers/stack when done. I assure you, we had no access to Microsoft's source code! We wrote in Assembly language and they worked well though I doubt any were written identically though all did the (or were supposed to do) exactly the same thing.
 

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Posted by Robert Minichino (Member # 3495) on 02-28-2007, 10:39 AM:
 
Unfortunately (IMO) software and algorithms (along with business methods!) can now be patented and it is possible for software to infringe on patents. If DTS's decompression method is patent-encumbered then any software that decodes DTS discs is infringing.
 

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Posted by Steve Guttag (Member # 268) on 02-28-2007, 11:53 AM:
 
It may be your HO but software that works with patented equipment, including those that require software to fully function, is NOT patent infringement. Software is software, it is not patentable...it is copyrightable...which is MUCH stronger...that is Life of the author or owning entity plus some ungodly amount of time.

If you've got better code go for it. Since DTS and other hardware manufacturers rarely charge for their software, there is going to be little market for profit. When is the last time you paid for DTS or Dolby software to operate their products? Their goal is to proliferate their products.
 

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Posted by Robert Minichino (Member # 3495) on 02-28-2007, 01:58 PM:
 
While software that works with patented equipment isn't infringing in itself, methods and algorithms used in the software itself could be patented (separately from the equipment) and thus protected.

Patents are a much stronger, but more time-limited protection of an idea, and cover any implementation of that idea. Copyrights only pertain to a specific implementation.

Here's some information on software patents:

http://en.wikipedia.org/wiki/Software_patent
http://lpf.ai.mit.edu/Patents/patents.html
http://www.bitlaw.com/software-patent/history.html

EDIT: Hardware is also copyrightable, especially printed-circuit layouts, IC masks, schematics, etc.
 

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Posted by Steve Guttag (Member # 268) on 02-28-2007, 08:11 PM:
 
Hardware is not in and of itself copyrighted...it is the LAYOUT that is copyrighted. The circuit itself can be patented. The layout is considered artwork and thus copyrightable just like a painting.
 

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Posted by Gordon McLeod (Member # 33) on 02-28-2007, 08:14 PM:
 
And change the layout changes the artwork and is such a new artwork
 

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Posted by David Stambaugh (Member # 1102) on 02-28-2007, 08:25 PM:
 
Wikipedia on the subject of software patents

EDIT: Steve retracted his challenge just about the time I posted this.
 

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Posted by Andy Frodsham (Member # 4061) on 03-17-2007, 08:17 AM:
 
On a more simple level, guys, does this mean that DTS as a professional soundtrack system is going to bite the dust?

I know that all existing digital and analogue systems will ultimately be phased-out as digital film media take-over, but what about the short term? Will be start to see an end to DTS encoded 35mm prints?
 

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Posted by Mark J. Marshall (Member # 1409) on 03-17-2007, 09:13 AM:
 
I think you'll start to see an end to 35mm prints before that happens. Look how long SDDS has managed to hang on.
 

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Posted by Richard Fowler (Member # 893) on 03-17-2007, 05:37 PM:
 
Licensing is not that expensive with DTS and in multi-linqual / short film run markets very cost effective and flexible. The new corporation set-up to handle DTS has image / sound origination and restoration, booking, advertising, digital cinema via Avica, to handle now and future.
 

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Posted by Phil Hill (Member # 371) on 03-17-2007, 05:50 PM:
 
Well Mark(G)!!!!! We're ALL waiting anxiously for your report from the DTS breakfast!

You know, when you were publicly going to ask the DTS paper-pushers some REAL questions about their latest dumbass move to put the stockholders above the low-life theatre operators... you know, sorta like SONY and SDDS when they left the theatre owners to hold the expensive hardware (douche) bag.

I'm ALL ears!
 

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Posted by Mark Gulbrandsen (Member # 72) on 03-18-2007, 09:34 AM:
 
Ok, The fluffy scrambled eggs were great... fluffy as adverstised... the sausage links and bacon and other sweet goodies were also very good... super coffee as is usually the case at Bally's . Richard Fowler who sat at our table accepted his "Dealer Of The Year" award. The free briefcase gift was well liked by all. You shoulda been there!! The rest is on the DTS web site but it looks like they should be around for some time to come.

Mark
 

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Posted by Richard Fowler (Member # 893) on 03-18-2007, 12:49 PM:
 
Mark was on his best behaviour since is sweet girlfriend / future wife was sitting next to him
 

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Posted by Gordon McLeod (Member # 33) on 03-18-2007, 01:18 PM:
 
Does that explain why he didn't show up at quarks dinner and at the filmtech drink
 

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Posted by Phil Hill (Member # 371) on 03-18-2007, 03:28 PM:
 
Mark! I enjoyed your reply (to my smartass post)...it made me laugh! Thanks bub!
 

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Posted by Mark Gulbrandsen (Member # 72) on 03-18-2007, 05:26 PM:
 
Well... the breakfast WAS pretty darn good. We were not at the Quarks thing because we were having car problems which we didn't resolve till late Friday and $1200.00 later . Bad fuel pump module AND pump/ignition relay module.... both failed together... Apparently Ford has a recall on the gas tank and the repair shop we were referd to couldn't take care of that... they got the car running again... barely... so we could drive it to Friendly Ford Friday morning to get the "not covered under warranty" recall taken care of... because some asshole filed a class action lawsuit against Ford about the gas tank problem. Yea... its a good thing the service writer WAS Friendly or I'd a crawled up his asshole and back out his mouth when he told me how much it was costing me. Now Ford is in the wait and see mode to see if they are ruled to pay the consumer or not. So we have to wait in line for our check like the 15" monitor debacle a few years back.

FWIW: new cars now have a one way fuel system... no return line... and the pumps are now pulse width modulated to keep the fuel pressure constant with driving speed.

Mark
 

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Posted by Monte L Fullmer (Member # 2797) on 03-18-2007, 08:09 PM:
 
Yea, the dinner (prime rib, et.al.) at Quarks was great, just the bummer that no costumed Frengi served us, but still was great to see who was there at the dinner and had a wonderful time with the visits.

(Yes Mark, you got a great little woman there..my congrats to you. Just sorry that you had vehicle problems crossing the Nevada desert....)

Wonder what DTS has up their sleeve to surprise us with then in the future since they're planning on staying alive..?
 

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