Dolby will further innovate cooperation model to expand the Chinese market

Ye Kewen joined Dolby Laboratories in 2005 as Dolby’s Chief Financial Officer. In 2009, he served as president and CEO of Dolby Laboratories. Kevin Ye has excellent leadership, extensive industry experience, and the ability to lead the company in a complex and ever-changing environment.

During his time as Dolby's Chief Financial Officer, Ye Kewen helped Dolby successfully transition from a private company to a public company and helped complete and integrate several important mergers and acquisitions. These mergers and acquisitions are crucial for Dolby's expansion into the wider field of audio technology and its opportunities in the video field. Ye Kewen established a sound financial framework that paved the way for the future development of Dolby.

Controlling Costs and Implementing Steady Financial Policies

â–¡ Like many companies, Dolby places great emphasis on cost control in a down economy.

â–¡ Dolby has entered different market segments over the past 40 years, and diversity has brought many advantages to Dolby.

Liu Dong: Due to the impact of the international financial crisis, the revenue and profit growth rate of many multinational companies has declined, and some companies have even suffered serious losses. We know that you were Dolby's CFO (Chief Financial Officer) before you were CEO of Dolby. Please tell us about Dolby's operations. You have been the CEO for just two or three months to visit China. What is the main purpose of your visit?

Ye Kewen: The international financial crisis has affected most companies, but Dolby's financial performance is very stable. Dolby not only has no debt, but also has sufficient cash flow.

Based on a solid financial position, Dolby can focus more on what can be controlled. What Dolby can control is to continue to help customers and partners seek out excellent entertainment technology solutions to provide a better entertainment experience.

China is a very important market for Dolby. I also visited China before Dolby’s global president and CEO. After I’ve been a Dolby CEO, my visit to China will continue to increase.

The main purposes of my visit to China are twofold: one is to better understand the needs of government organizations, customers, partners, and other stakeholders; the other is to meet and communicate with our Chinese employees and listen to their views on the company.

Liu Dong: As you mentioned just now, Dolby’s financial situation is still stable under the background of the international financial crisis. What do you think is the main reason for maintaining this situation?

Ye Kewen: Founded in 1965, Dolby Laboratories has accumulated more than 40 years of experience in entertainment technology. We have always been well-managed and strategic in management.

In corporate strategy, Dolby has entered different market segments in the past 40 years, so our diversity is very high. Whether in different regional markets or in different types of technology markets, Dolby can help customers improve their competitiveness through their own innovations. Today, Dolby is able to provide end-users with a high-quality digital entertainment experience on the cinema platform, home platform and mobile entertainment platform. Therefore, diversification brings many advantages to Dolby.

Liu Dong: In response to the international financial crisis, many companies have adjusted their product strategy, market strategy, organizational structure, and personnel arrangements. Some companies have also reduced their expenses and even made layoffs. What did Dolby do to deal with the international financial crisis?

Ye Kewen: Like many companies, Dolby is very focused on cost control in an economic downturn, but our fundamental strategy has not changed. Our fundamental strategy is to provide customers with innovative entertainment solutions and the best entertainment experience. Many of the world’s best-selling disc content and playback devices are now using Dolby’s audio and video technology.

Diversified layout, industrial chain, coordinated development

â–¡ Dolby has extensive cooperation with all aspects of the content production and distribution industry chain, which is Dolby's main competitive advantage.

â–¡ In the future, Dolby will focus on new areas such as digital broadcasting and mobile platforms.

Liu Dong: You just mentioned that Dolby's fundamental strategy has not changed. When you were a Dolby CFO, you had led some mergers and acquisitions, such as the acquisition of Canada's Brightside company, trying to make Dolby change from an audio technology provider to an audio and video integrated entertainment service provider. For more than 40 years, Dolby has always had an advantage in audio technology. What has Dolby achieved in transitioning to audio and video integrated entertainment service providers?

Ye Kewen: Dolby Surround is our most prestigious technology. At present, 50% of our R&D efforts are invested in audio technology research. But video has always been an important part of our business. Dolby has been working closely with the film industry and we have a strong R&D team for video technology.

By mid-June, sales of Dolby Digital Cinema Systems and Dolby 3D Theater Systems have reached 2,750 units and 1,250 units respectively. In China, Dolby Digital Cinema equipment is used in the China Film Group, the Shanghai Film Group and the Lianzhong Cinema Line.

Liu Dong: Dolby is leading and relying on the entire audio and video industry chain to develop and grow. As an important company with key technologies and patents in the industry chain, how does Dolby strive to maximize the interests of the company while strengthening industrial chain collaboration?

Ye Kewen: In order to promote the development of the entire industry, we spent a lot of time and energy. Dolby worked closely with content providers, content distributors, broadcast equipment manufacturers, governments and industry associations. We hope to achieve the common development of the entire industry chain and value chain.

We have been paying close attention to market demand, solving entertainment technology issues globally, and providing customers with solutions that meet new needs.

At present, many countries are striving to achieve the transition from analog to digital, from standard definition to high definition. In this process of transformation, many of our technologies and products have solved problems or created value for our customers. For example, Dolby provided Dolby Digital Plus for France’s TNT HD channel, enabling more efficient delivery of audio signals, solving the problem of insufficient HDTV channel transmission space and ensuring that there is more capacity to transmit higher-quality pictures.

In addition, we also provide new audio technology solutions for many PC manufacturers such as Lenovo, Acer, etc., so that consumers can use the PC as an entertainment center to experience cinematic sound enjoyment. At the same time, we also provide audio technology solutions for the game industry, such as 3D (3D) voice technology. Currently, Dolby has cooperated with Jinshan, a well-known Chinese game software company. Kingsoft's "Anti-Terrorism Action" game, through the application of Dolby Axon technology, has increased the effects of 3D voice calls and surround sound for online games. In short, we are committed to enhancing the entertainment experience of consumers and creating more value for our customers through our technology.

Liu Dong: As a listed company, Dolby must guarantee the interests of companies, employees, and shareholders. We have noticed that Dolby’s profit model is mainly technical licensing. Under this profit model, how does Dolby ensure the continuous expansion of industry scale and sustainable growth of profits? Will Dolby’s profit model change in the future?

Ye Kewen: Our revenue is derived not only from technical certification but also from products and services.

In the future, Dolby will further create more value for a wider range of products and focus on new areas. For example, in the field of digital broadcasting, some countries have not yet opened digital broadcasting, and we will help them to open digital broadcasting. In the field of mobile platforms, for example, Dolby applies a cinematic sound experience to mobile devices and people can use it on mobile phones. Enjoy high-quality movies. The above new areas will become an important source of Dolby's future profit growth.

Liu Dong: We know that the core audio and video technologies and standards are mainly concentrated in the hands of a few multinational companies. Will this situation constrain the development of the entire industry? What are the advantages of Dolby as compared to its competitors?

Ye Kewen: I think the audio and video industry is developing healthily, which is beneficial to the market environment and ecosystem of this industry. Just now we also mentioned that Dolby has spent a lot of time and energy cooperating with industry partners and partners in the value chain to meet the challenges. If Dolby can continue to succeed, it is because customers think that Dolby has brought value. There are still many companies that want to enter the audio and video field, indicating that the audio and video industry still has a lot of room for growth. I think the main reason why customers choose Dolby is that Dolby has more than 40 years of professional experience and the high quality represented by the Dolby brand.

With regard to Dolby’s competitive advantage, I think it is mainly embodied in three aspects. First, Dolby has extensive cooperation with all aspects of the content chain, such as content production and distribution. This is Dolby’s most important competitive advantage and is also Dolby’s. The uniqueness. Second, the Dolby brand is a symbol of a high-quality entertainment experience. As of the end of March this year, more than 3.6 billion units (units, sets) of Dolby technology-certified products have been sold. A survey of global consumers revealed that Dolby’s brand awareness reached 85%. Consumers will mention Dolby as a brand without mention and list Dolby as one of the world’s top ten entertainment brands. It is worth mentioning that Dolby is the only company in the world's top ten entertainment brands that does not directly sell consumer products. In China, Dolby has been using its own brand and technology to help Chinese partners expand into the international market. Third, Dolby's technology, products and services are forward-looking and innovative. We help customers lead the entertainment trend and bring high quality entertainment experiences to consumers.

Emphasis on the new application of new technology in the Chinese market in China

â–¡ China is a very important market for Dolby.

â–¡ Dolby will pay close attention to the latest needs of Chinese partners, work with them to find solutions, and promote the development of the entire industry.

Liu Dong: You came to visit China two or three months later. So where is the Chinese market in Dolby's global market? What new strategic deployments have you made in the expansion of the Chinese market since you became the CEO of Dolby?

Ye Kewen: China is a very important market for Dolby. Dolby has started cooperation with Chinese manufacturers more than 20 years ago.

At present, our business in China covers broadcasting, film, PC, games and consumer electronics. Dolby has many long-term or close partners in China. In addition to the aforementioned Lenovo, Acer and several big movie groups, there are TCL, Haier, Hisense, and many television stations. Dolby helps these companies and organizations obtain Success, and promote the development of the industry.

Dolby has recently cooperated with Asian companies, such as Dolby and some digital entertainment companies, signed a cooperation agreement to authorize them to produce Blu-ray players using Dolby Digital Plus and Dolby TrueHD. In the broadcast field, Dolby and Heilongjiang TV stations have begun Close cooperation has enabled Heilongjiang TV Station to achieve 5.1-channel live capture of large-scale events; in the field of cinema, digital cinemas and 3D cinemas are being promoted in China, and Dolby provides products and technical support for its promotion in the Chinese market; in the field of games, Du Compared with Kingsoft, it has realized the realistic and realistic feeling of online games.

Dolby has provided strong technical support for Chinese companies. Dolby has set up an Asian testing center in Shanghai. In addition, Dolby’s Asia Pacific head office is based in China, which helps management to communicate with Chinese customers in close quarters and understand their needs in a timely manner.

Liu Dong: China recently issued the "Electronic Information Industry Adjustment and Revitalization Plan" and actively promoted the development of digital television, digital cinema, 3G and other industries. What will Dolby take to seize this market opportunity?

Ye Kewen: China is indeed a very important market. We see that China's film, broadcast, and multimedia industries are growing rapidly. Consumers also want to get the best entertainment experience anytime, anywhere. The plan launched by the Chinese government is a very good measure. It can bring more value to businesses and consumers. Dolby will pay close attention to the latest needs of Chinese partners, work with them to find solutions, and promote the development of the entire industry.

Liu Dong: It seems that you still have confidence in Dolby's performance in the Chinese market. China is vigorously promoting its own audio and video standards, such as DRA (China's own digital audio technology standards with independent intellectual property rights) and AVS (China's second-generation source coding standard with independent intellectual property rights). From Dolby's point of view, what are the prospects for the promotion of these standards in China? What impact will these standards have on Dolby after being promoted in China?

Ye Kewen: We believe that the audio and video market in China will surely continue to grow and expand. At the same time, the demand of Chinese consumers for the quality of entertainment experience will continue to increase. We see that some companies hope to participate in the formulation of industry standards, indicating that the industry is growing very healthy. The Chinese government is continuing to provide consumers with the ultimate consumer entertainment experience in some ways. This is what we are very much willing to see. The Chinese government is setting standards for the industry. Dolby is very willing to use our technology to support these standards.

The unique Chinese market continues to innovate in cooperation models

â–¡ Dolby's success in the past 40 years is based on the establishment of long-term partnerships.

□ Dolby is applying a new business model in China’s game market—the revenue sharing model.

Liu Dong: Dolby has extensive cooperation with Chinese companies, but the Chinese market has its own unique features. Dolby cooperates with Chinese companies, what are the innovations and breakthroughs in market strategies, business models, etc.?

Ye Kewen: Indeed, the Chinese market has its unique features. For example, in China, online gaming is a growing market. We are applying new business models in the Chinese game market. For example, in cooperation with Kingsoft, Dolby uses the revenue sharing model instead of the previous model based on shipments and charging royalties. However, the Chinese market also has many similarities with other global markets. For example, Chinese consumers' demand for high-quality entertainment experience is definitely not lower than that of consumers in other global markets. Therefore, we hope to gain some experience in other markets around the world. Applied to the Chinese market.

Dolby has always been committed to bringing value to customers, and once our partners see this value, they will establish long-term relationships with us. The success of Dolby over the past 40 years is based on the establishment of this long-term partnership, which is very important.

Liu Dong: China's 3G market has started on a large scale. Dolby has joined the TD-SCDMA (Time Division Synchronous Code Division Multiple Access) technical forum and provided some technical support for the development of the TD-SCDMA industry. China is the world’s largest mobile phone producer and consumer market. What are Dolby’s expectations for the mobile phone market?

Kevin Yeh: In terms of mobile platforms, the Dolby Mo-bile technology provides a cinematic experience. In June of this year, Dolby Mobile Entertainment Experience won the Best Entertainment Experience Quality Award at the annual International Mobile Entertainment Forum (MEF). In Japan, more and more Sharp mobile phones will incorporate Dolby's technology, and LG is also offering Dolby technology mobile phones worldwide. Therefore, we are also very willing to bring the Dolby mobile entertainment experience technology to Chinese consumers.

Liu Dong: Dolby has already carried out extensive cooperation with a group of Chinese companies. How will you make this cooperation reach a higher level and achieve a broader scope?

Ye Kewen: The Chinese market is a very important market for Dolby's new technology promotion. The application of Dolby's latest technology that we mentioned just now is cooperation with Kingsoft. China's online game market is very developed, and in other markets around the world, people play games more non-online, and users play through game consoles. Therefore, the application of Dolby technology in the game field will be an area in which Dolby and Chinese companies will further develop their cooperation. In addition, we will also cooperate with more Chinese companies in the promotion of Dolby's mobile entertainment experience technology.