Quadraphonic sound for music was failing big during the 1970’s, but Dolby created a niche for itself by applying it to cinema sound. It was at this time that Dolby began its long tradition of support for sound mixers, and training programs for those aligning sound systems. But Dolby’s product domain ended at the output of the cinema audio processor. To get good sound in cinemas, it still took good amplifiers and speakers – none of which Dolby made, nor did Dolby specify.
It was this gap in bringing good sound to cinemas that caused then Lucasfilm chief engineer Tom Holman to create a program that would complement Dolby’s effort in bringing good sound to the cinema. The big difference between the THX program, as it was named, and Dolby’s program, is that THX only made an active crossover for loudspeakers. The rest of the THX program relied on specifications, and of course, the power of the brand. It was very nearly a pure licensing play. Of course, it didn’t hurt that George Lucas would give special screening rights for his movies to THX-certified cinemas.
In those days, the gap between an average cinema and a great cinema was big. THX rooms stood out. Fast forward 30 years, and the gap between an average cinema and a great cinema is small. The value brought by THX is no longer.
But this is a great brand. One industry exec recently pointed out that, while at a trade show, a THX-marked folder sat on top of a checkout counter. A young woman looked at it, saying “THX – cool.” What company wouldn’t die to have its name still recognized by the younger generation 30 years after launch?
The old cinema program may be outdated, but THX hasn’t been sitting on its laurels. In recent years, the company has been developing the Media Director program, a metadata-driven technology for maintaining image and sound quality across a wide spectrum of consumer playout devices. It’s a pure licensing play, a perfect technology for a company such as THX to pursue. It looked like THX had a future.
But this month, that bright future slipped away. A few months back, the company let go its long time leader, and one of the patent holders for Media Director, SVP Rick Dean. His departure was all the more significant as they’ve been operating without a CEO for a while. This month, the development team behind Media Director was also let go. What could drive this outcome?
The best hypothesis put forward is that this is all driven by George Lucas’ retirement in June. George Lucas hired Michelene Chau as President of Lucasfilm 20 years ago. Ms. Chau is from a wealthy Singaporean family. It is not coincidental that her brother, Kaling Lim, is a major stakeholder in the Lucasfilm animation studios in Singapore. It is also not coincidental that Mr. Lim is the majority shareholder of THX. But Mr. Lim, it would seem, is more fond of selling things, such as gadgets in boxes and tickets for cinemas, than in selling licenses for technology and the right to use a brand. Mr. Lim’s desire to exploit the brand is grand, it is said, but not so grand as to value a technology such as Media Director. He may have been held back, in fact, from realizing his grand plan by his sister and investment partners, who may not have been so keen on sprinkling the THX name on trinkets and ticket stubs.
But back to the chain of events. Mr. Lucas announced his retirement in June, and Ms. Chau announced her retirement this month. With neither sister nor Mr. Lucas directly involved in the brand management of Lucasfilm, Mr. Lim now has his road paved for him. All that’s left to do is to get rid of those pesky partners, including Creative Labs, that would rather not have a brand such as THX compete with theirs. Better for Mr. Lim to buy them out, and to buy them out cheap, by eliminating any possibility of a different future for the company.
Bye-bye the THX we knew and loved. One day, when clicking through Amazon, we’ll see a pair of lovely ear buds in bright colors and that name, THX, clearly marked on the packaging. And some of us will remember back when good sound was first promoted in the cinema.