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The Company is a provider of entertainment technology, products and services to the audio and image entertainment markets worldwide.
I got interested in DTSI as a consumer. After getting a new surround system over a year ago I ended up choosing DTS as the sound option on DVDs over Dolby since it simply provides better surround sound. Then I got interested in the company behind DTS and researched its financials. Its financials look decent, especially in comparison with Dolby, which has higher forward P/E ratio than DTS.Then I took a field trip to few consumer electronics stores to see how many home cinema and A/V receiver devices carry the DTS logo. I was surprised to see that over 99% of them license DTS. Looking next through the DVD isles, however, I was disappointed that only 30-40% of DVDs carry the DTS logo.This disappointment turns out to be an opportunity. DTS has the opportunity to increase its penetration of the DVD market and hence increase its license revenues from movie studios. DTS could for example start advertising its superior surround system directly to end consumers to increase its traction in that space. Management’s focus on the consumer electronics market is the right move. Especially keeping in mind the expected growth in the home entertainment space.
With lots of national chains and smaller ones closing up shop, do you think DTSI will take market share and move more fully into consumer electronics?
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