COMPANY TOWN : Three Companies Wage Battle for the Hearts--and Ears--of U.S. Moviegoers : Technology: Theater owners face a quandary in choosing which of the new digital sound formats to install.

There’s been a quiet battle raging in movie theaters for the past three years.

Three companies--Sony Corp., Dolby and DTS (Digital Theatre Systems)--have been in intense ear-to-ear competition for the exhibitor and studio dollar for upgrading sound quality to digital standards.

Since the dawn of movie sound in the late 1920s, theatrical sound enhancements have generally lagged behind improvements in music recording and presentation. The first major step forward did not come until the 1950s, with the introduction of magnetically recorded multiple-track stereo accompanying the new wide-screen formats such as CinemaScope and Todd-AO 70mm. Save for the 3,000 or so U.S. theaters equipped to take advantage of that enhancement, theater sound was not truly modernized until the 1970s, when Dolby introduced a widely accepted system of stereo sound and reduced the background hissing on tape recordings.

“Star Wars” (1977) introduced the full Dolby stereo soundtrack. Slowly, over the next two decades, most of the nation’s 20,000 or so exhibitors upgraded their theaters with that system.

Digital theatrical presentation is the next quantum leap--similar to the change from tape cassettes to CDs in music.

The three systems competing now have one thing in common: Each can perfectly reproduce the range and variety of sound captured by sophisticated digital multitrack film recording. They differ in that both Sony and Dolby’s digital formats are on-film systems, encoded on the actual movie soundtrack itself, whereas DTS is a dual-media system, synchronized with the movie’s visual track and played on CD-ROM. This presents a quandary for theater owners.

“It’s a nightmare for exhibitors,” says Howard Lichtman, executive vice president of marketing and communications for the Toronto-based Cineplex-Odeon chain. Without an industry standard, it is difficult to commit 1,000 screens in a large chain to one format. “What if three years later, the studios all decide on another technology?”

Dolby, which over the past 20 years has become a brand name in theater stereo sound, arrived on the scene first in the summer of 1992, on the soundtrack of “Batman Returns.” Few theaters then were equipped to take advantage of Dolby’s digital delivery system. But as the number of films in Dolby Digital has increased (it will reach 200 by the end of the year), so has the number of U.S. theaters buying the system, with some 800 theaters now carrying it today.

DTS, owned by a limited partnership that includes Steven Spielberg and MCA Inc., made its debut in 1993, in “Jurassic Park.” Despite the extra cost to studios to license the system, it costs much less for theater owners, which perhaps explains why DTS has been installed in 3,700 screens in the United States, and more than 80 titles will be released in that format this year.

Sony Dynamic Digital Sound (SDDS) is the newest kid on the block, introduced just a year ago. But it is catching up, having been installed for 1,065 screens domestically in the past 12 months and with a commitment from AMC Theaters for installation in each of the chain’s 1,700 screens.

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Because SDDS is a division of Sony, all Columbia and TriStar films use the SDDS system, just as Universal releases are primarily in the DTS format. Dolby, an independent company, has been used by several studios including Walt Disney Co., Paramount Pictures Corp. and Warner Bros.

Each company boasts of commitments from various studios for some or all releases. Some films are being released with more than one sound format. Twentieth Century Fox Corp.’s “Die Hard With a Vengeance” was released in all three formats this summer, and Paramount’s “Congo” was released with both Dolby and DTS digital tracks.

The reason is so that the movie can play the maximum number of houses equipped for digital. With more than 6,000 digital audio screens--usually the top first-run houses as well as new theaters--distributors are spending a little more to ensure their movies will be booked into a theater with up-to-date sound. All films feature an alternative Dolby Stereo analog track, however.

Though Cineplex-Odeon is partly owned by MCA/Universal, DTS is not the only format it has installed in 300 of its screens to date. “We’re putting in some SDDS units too,” Lichtman says.

Similarly, Sony’s theater chain features mostly SDDS, but it also has some Dolby houses. “It’s not our policy to go out and buy massive amounts of our competitors’ product,” Richardson says, “but we have to play Universal and Paramount movies too.”

It may sound contradictory for Lichtman to ask studios to commit to one format when Cineplex-Odeon itself has not, but, he explains, “a certain percentage of the audience is sound-sophisticated. And we’re out to enhance the moviegoing experience.”

The competition has set off a bit of a war, says DTS Vice President and General Manager Bill Neighbors--or, as he puts it “a disinformation campaign.”

“There have been unsigned faxes out in the field about failures [in DTS] that never occurred and articles in the trade publications that a competitor has signed exclusively with another studio, which also turn out to be false.

“There were also rumors that MCA was pulling out of the limited partnership, also not true.”

Spokeswomen from both Dolby and Sony deny any attempts to sabotage DTS.

The reason for the contentiousness is clear: There are still almost 20,000 U.S. screens to update. Eileen Tuuri, marketing services manager for Dolby, expects the conversion to happen within a decade. Beyond the United States, there is the almost limitless world market. Except in Western Europe, theatrical sound presentation lags far behind the United States. Neighbors says that DTS’s U.S. growth has flattened out somewhat, but “we’ve hit the first tier of theaters in Europe, and Japan is probably a year away.” DTS is now in about 1,100 theaters overseas, a 100% increase from a year ago. Dolby is in about 1,400 foreign sites, and Sony in 187, with commitments from AMC theaters in Mexico, Europe and Japan, according to the companies.

Dolby, meanwhile, is trying to take the lead in home theater exhibition. Tuuri says the videodisc version of “Species” will be in Dolby even though the film was released in DTS. Pioneer will be introducing top-end equipment this year that will have Dolby’s AC-3 digital format; within the next couple of years, it will be available in less-expensive models.

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Sound Wars

DOLBY

* Cost: $10,000 per theater to install; $10,000 per film to the studio.

* Advantages: Information is encoded between sprocket holes, making the sound less vulnerable to wear and tear. Because it it a six-track system, theaters don’t need to install extra speakers, as they do to fully take advantage of Sony eight-track digital. Dolby has brand-name recognition in sound. (Some of Dolby’s patented technologies are also used by SDDS, for which Dolby receives royalties.)

* Disadvantages: No firm commitments from any studio or theater chain as DTS and SDDS have.

SDDS (SONY DIGITAL)

* Cost: $10,000 to $11,000 per theater; $10,000 per film to the studio.

* Advantages: Eight tracks of sound compared to six for its competitors. Information is encoded twice on either edge of the film, each 15 frames behind the other in case of film breakage or splices. (Digital will not play over a splice.)

* Disadvantages: Additional cost of installing new speakers to fully take advantage of the system. Dolby contends that putting the sound on either side of the film makes SDDS more vulnerable to distortion and deterioration.

DTS (DIGITAL THEATER SYSTEM)

* Cost: $5,900 per theater; $40,000 per film to license to the studio.

* Advantages: The discs cannot be compromised by constant play as on-film soundtracks might be. Offers alternate tracks for the visually impaired. Lower price to theater owners.

* Disadvantages: Potential of the synchronized code, which is on the film, to be compromised. Higher cost to studios. (DTS argues it can save the studios from striking new prints, at roughly $1,500 a print, for overseas release. Instead, studios pay about $200 for foreign-language discs.)

THX

Now that you know all about DTS, SDDS and Dolby Digital, what, you may ask, is THX?

THX, developed by George Lucas’ Skywalker Sound, is a certification system, not a sound delivery system. “We’re a program that considers all aspects of a theater’s visual and sound performance--acoustics, architecture and equipment,” says Monica Dashwood, THX general manager. The program was begun in the early ‘80s by Lucas, who hired sound engineer Tomlinson Holman to help improve film presentation.

THX (for Tomlinson Holman’s experiment) takes the acoustical specifications of a sound mixing room and applies them to theaters. THX concentrates on sound isolation (no bleeding from theater to theater); background noise (air conditioners, underground subways), and reverberation (echoes and faulty speakers). Sound engineers make recommendations to theater owners, and once the movie house has met certain specifications, it is certified a THX theater.