DTS Prepares to Turn Its Ear to Sony Challenge : Technology: The two makers of digital sound systems hope to become the provider of choice for movie theaters.

Digital Theater Systems is close to resolving a legal dispute with a French rival, a step that will free the company to turn its attention to Sony Corp., its latest major challenger in the competition to bring digital sound to movie theaters.

DTS, based in Westlake Village, will purchase worldwide rights to the digital sound patent of L.C. Concept of Paris under an agreement expected to be signed within a week. DTS and its part-owner, Universal Studios, will agree to drop several lawsuits they filed against L.C. in recent months.

Digital movie sound is similar in quality to that of compact discs used in home stereo systems. Through computer technology, it offers tones that are free of the hisses and pops that sometimes plague traditional movie soundtracks. DTS’ hardware is now in more than 2,000 theaters worldwide, giving it a leg up on competitor Dolby Laboratories of San Francisco.

But Sony is likely to pose as big a challenge. After several delays, it plans to introduce its Sony Dynamic Digital Sound system in 150 of its 900 Sony Theatres (formerly Loews Theatres) by the end of the year, said Jim Fiedler, SDDS president.

Officials said the company also has firm commitments from other exhibitors and expects to see its sound format on non-Sony Pictures Entertainment movies soon.

Bill Neighbors, DTS vice president and general manager, said the company is not fazed by Sony’s entry. “We’re just selling units and making movies,” he said. But he added of Sony, “I take them very seriously.”

Sony is arriving late in a business that received its first big push last summer with Universal’s release of Steven Spielberg’s “Jurassic Park” in DTS sound. Spielberg, along with Universal, is an investor in DTS.

DTS is used in several big summer films, such as Spielberg’s “The Flintstones,” MGM’s “Blown Away” and New Line Cinema’s “The Mask,” which opens Friday.

But the studios are splitting their bets on digital sound formats. Twentieth Century Fox’s “Speed” and the Arnold Schwarzenegger hit “True Lies” are out in both DTS and Dolby digital sound formats, as is Paramount Pictures’ “Forrest Gump” and the upcoming “Clear and Present Danger.”

Meanwhile, Disney’s blockbuster “The Lion King” is a top box office draw in Dolby sound.

Despite Sony’s delay in getting its system to market, most acknowledge that the Japanese firm, with its vast resources, will be a significant force. Its pitch to exhibitors is that its system offers better sound quality and durability than those of its rivals. Sony’s is also the only system to offer a digital track backup.

“Sony is the 800-pound gorilla in this thing,” said Bill Mead, vice president of film marketing at Dolby.

All motion pictures from Sony Pictures Entertainment--Columbia Pictures, TriStar, Sony Pictures Classics and Triumph Releasing--will feature SDDS. Columbia’s “The Next Karate Kid,” opening Aug. 5, will be the first film in major release using the system.

Exhibitors have been reluctant to adopt one audio format over another, convinced that eventually the industry will embrace one standard. But at the moment, some cinemas are investing in more than one digital sound system.