The U.S. has pretty strict antitrust laws, which means movie production companies and theater chains can't merge.
In other words, Dunn Films can't own a theater chain—ever!
But here's the thing: IMAX theaters? Those belong to the theater chains, not the IMAX company itself.
IMAX just provides the tech support and branding, collecting a naming fee and a cut of the profits. That's it.
Same deal with Dolby theaters.
Both IMAX and Dolby are lean tech companies—they don't mess with heavy assets like owning theaters.
When Dunn laid it out like that, the current CEO of Dolby Labs, Little Dolby, caught on quick. "Mr. Walker, are you saying Dolby Labs should focus its future on movie theaters?"
Dunn nodded. "Dolby's a tech company—your core is innovation. The Dolby Atmos audio tech you're working on, the Dolby 5.1 digital surround sound—it's all solid stuff. But for a company, what's the real key? Branding! If Dolby wants to expand, partner with more big players, you've got to make the name pop."
"Here's the good news: Dunn Films can help with that—through movies! The internet's taking off, and it's killing off old-school stuff like tapes, VHS, discs, even Toshiba's overhyped HD-DVD. But there's one thing the internet can't touch in the film industry: the theater experience!"
"Watching a movie like A Beautiful Mind on a computer or TV? Eh, not much different from a theater. But something like Spider-Man or Star Wars? Night and day! Only in a theater do you get that rush from a blockbuster's explosive effects."
"The internet's gonna steamroll a lot of traditional industries, but movies can save themselves with killer effects. And theaters? They need cutting-edge tech to keep up—stuff that boosts the experience and pairs perfectly with those effects. IMAX's giant screens are one piece of that puzzle. And in my opinion, Dolby's sound systems are another big one!"
Little Dolby mulled it over. "Dolby's business has mostly been home entertainment up to now…"
Dunn grinned. "IMAX theaters have been around forever. Don't you guys want a piece of that action with Dolby theaters?"
"Dolby theaters?"
Father and son Dolby exchanged a look, barely containing their excitement.
IMAX's brand is huge because it's tied to movies—those IMAX theaters are famous!
Disney's value skyrocketed thanks to animated films.
Movies are the real deal!
If the "Dolby" name could take off, Dolby audio could spread like wildfire—into mobile tech, the internet, entertainment, video games, you name it.
It'd crush competitors like DTS in no time.
"Dolby theaters"—it was a brilliant idea, turning brand value into something tangible.
In that moment, the Dolby duo felt a surge of inspiration.
They finally saw the charisma of this young boss.
A business genius, no doubt!
Of course, this wasn't Dunn's original brainstorm.
In his past life, Dolby's peak market value came when they rolled out Dolby Vision and Dolby Atmos, then launched Dolby theaters with a big splash.
Dr. Dolby chimed in, "Our Dolby Pro Logic surround sound uses left, center, right, and surround channels to boost sound positioning, direction, movement, and recreate the soundfield. It brought a 'theater' vibe to homes. If we take that approach…"
Dunn cut in with a wave. "Four channels? Too weak for theaters. You need at least 12—maybe 22! Theater sound systems are outdated. If Dolby theaters are gonna make waves, you need next-level audio—game-changing stuff! Integrate the speakers with the theater design, the seating layout. Add more speakers, go full 3D sound placement, and sync it with the movie for dynamic effects."
Little Dolby gave Dunn a long look. "So… IMAX theaters are all about visuals, and Dolby theaters focus on sound?"
Dunn smiled. "IMAX tech is pretty straightforward and has been around a while. But Dolby theaters? To pull off something jaw-dropping, you'll need top-tier talent. No rush—take it slow. Step one: roll out Dolby theaters with my vision."
"Step two?"
"3D."
"And step three?"
Dunn's lips curled into a sly grin. "Once 3D, IMAX screens, and Dolby sound are all locked in, I'll get IMAX and Dolby to team up and create the ultimate super cinema!"
In his past life, IMAX and Dolby theaters were rivals.
Film IMAX, digital IMAX—they had issues and couldn't compete well. The only real contender against Dolby theaters was the high-end RGB laser IMAX with massive screens.
Dolby Vision and laser IMAX matched up on brightness and clarity; the difference was screen size.
Bigger screens, bigger impact—obvious stuff.
But Dolby theaters had Atmos—a 3D sound system that was unbeatable.
That evened the score.
Both had strengths and flaws.
Now, imagine blending IMAX's visual chops with Dolby's audio mastery—say, an IMAX Vision screen or a laser IMAX giant, paired with Dolby Atmos. A super cinema like that would take the world by storm!
Dunn Films can't own theater chains.
But this? This could sway every theater chain on the planet!
---
On a trip to Silicon Valley, Dunn also checked in on two other companies: Pixar and Netflix.
Netflix, especially.
It's not a Dunn Films subsidiary—80% of its shares sit with Dunn Capital, and 20% are with the management team.
Reed Hastings is a rockstar manager. After snagging Dunn's investment, he pulled Netflix out of the gutter fast, turning their "DVD-by-mail plus streaming" model into a goldmine.
Now, Netflix is in the black!
But the profits are still slim—too small to satisfy the team. A while back, Reed asked Dunn about taking Netflix public.
A lot of the founding crew are still renting apartments, after all.
Dunn's visit was to talk him out of it.
Going public now? Bad timing!
If push came to shove, Dunn Films could just acquire Netflix outright—stock plus cash. Those short on funds could take the money; those who wanted in could grab shares.
Dunn Films going public wasn't far off anyway.
Three years, tops!
These days, Dunn's playing the game like a pro.
His clout in Hollywood's inner circles is one thing, but his sway with the government? That's shot up too.
Word is, the highly anticipated U.S. National Security Strategy Report is about to drop. Right now, the feds are pulling together departments for detailed research and talks.
And Dunn, the movie guy? He's just scored invites from the White House and the Department of Defense…