For forty years, Ray Dolby's company made money every time someone else built a tape deck, a film projector or a DVD player. Dolby built some studio and cinema gear, but most of its money came from ideas. It licensed the methods that cut hiss from tapes and filled movie theaters with surround sound, and it collected a fee on each machine. When it went public in February 2005, the name was printed on hundreds of millions of devices, and its founder still controlled the company.

A Lab in London

Ray Dolby, an American engineer, started Dolby Laboratories in London in 1965. His first product cut the background hiss from recording studio tape. He later moved the company to San Francisco. Dolby noise reduction spread to cassette decks in homes and cars. Then came film: Dolby Stereo changed how movies sounded, and Dolby Digital became a standard for DVDs and home theater. The bet was that licensing an idea to every manufacturer beat building one product yourself.

Pricing Above the Range

Dolby had planned to sell shares at $13.50 to $15.50. Demand pushed the price to $18, and the stock began trading on the New York Stock Exchange under DLB on February 17, 2005. Ray Dolby sold shares in the deal too, yet he kept control through a second class of stock. He died in 2013. Dolby moved into streaming and phones with Dolby Atmos and Dolby Vision, and it still trades on the NYSE under DLB.

Cover: At the Concert, Henri de Toulouse-Lautrec. Art Institute of Chicago, public domain. Chosen for an evening at the concert (sound, heard clearly).