THE HOME THEATER BOOM Is this the future of your living room? With lower prices and more choices, home theater is hitting the mainstream.
By Alison L. Sprout REPORTER ASSOCIATES Ani Hadjian, Rajiv M. Rao

(FORTUNE Magazine) – IT'S AN ORDINARY Sunday night, and you've rented Jurassic Park again to keep the kids entertained while you pay bills. As the opening credits roll on your large-screen TV, quiet jungle sounds fill the living room and cicadas seem to buzz from under the couch. Suddenly a drum beats, and the rising notes of a flute evoke an eerie feeling of suspense. You decide to stay for a few minutes, just to see how the movie looks on your new home-theater system. An hour and a half later you are still there. The air vibrates as a herd of dinosaurs appears from behind a ridge and heads straight for your seat. You almost flinch as the noise of their pounding claws passes by and disappears into the back wall. The bills will have to wait until tomorrow. A growing number of people are realizing that this kind of home entertainment system is available today -- and that you don't have to be Steven Spielberg to afford one. For a few thousand dollars, you can forget standing in line for movie tickets or having to turn around and go home when the show you want to see is sold out. You can even pause the action to refill your bowl of low-fat popcorn. The urge to stay home cocooning in the company of loved ones is merging inexorably with the desire to experience at least some of the big-picture excitement and riveting sound effects found in a theater. The result, home theater, is one of the fastest-selling categories in consumer electronics. Until fairly recently the cost of home-theater equipment scared away anyone but movie moguls and serious hobbyists. High-end equipment plus custom installation can still run as high as $100,000. But while the outsize TVs that are part of a topnotch system are still expensive (52-inch rear-projection models sell for around $2,400), prices on most other components have fallen considerably. Audio-video receivers equipped with Dolby Pro Logic surround- sound decoding circuits -- the brains behind any home-theater setup -- now cost as little as $200, down from more than $400 in 1991. Using a 27-inch TV instead of a larger projection model, you can put together a basic home theater for about $3,000 -- around what you'd pay for a really good PC plus a laser printer. Falling prices and the success of the rental-video market have boosted home- theater-system sales to an annual growth rate of 20%. Some components are flying off the shelves even faster. Sales of subwoofers, speakers used to reproduce the rumbling bass in a soundtrack, are up 155% over 1993. Such growth has helped move home-theater equipment into retail chains like Circuit City and Sears.

EVEN WITH LOWER PRICES and wider availability, however, big obstacles still stand between the average consumer and his or her home-theater fantasy. First, there's the paralyzing confusion over components and standards. Just what is a home theater anyway? How big a TV do you need? What do Pro Logic, THX, and DSP mean? Then there's the challenge of buying a system without feeling ripped off and setting it up properly without fighting with your spouse because it takes over a whole room. Here are some answers -- and hints to get you started. The basic home-theater setup, 1994-style, consists of the following elements: a large-screen TV, either a direct-view model with a conventional picture tube or a larger front- or rear-projection model; an audio-video receiver with Dolby surround-sound decoding circuitry; a stereo VCR or laser disk player; four or five speakers. Some manufacturers and retailers will argue that you don't need this much equipment (or will try to sell you more), but these are the minimum requirements for experiencing the suspension of disbelief that draws you into a movie and keeps you going back to theaters in spite of sticky floors and rising ticket prices. An important part of the illusion relies on accurately reproducing the movie soundtrack and making sure the sound comes at you from all sides. In a theater a large center speaker is positioned directly behind the screen, with additional speakers on each side. The center speaker carries most of the dialogue, and sometimes music and other sounds. This ensures that no matter where you sit in the theater, you will interpret the sounds as coming from sources you see onscreen -- such as the characters -- and not from the left or right speaker. The effect is called sound localization. Another group of 15 to 20 speakers, the "surrounds," line the theater's side and back walls. These carry ambient sounds that give the moviegoer cues about the environment in which the action occurs, such as the sound of wind or rain, or noises from off-screen sources, such as those cicadas in Jurassic Park. While the front left and right speakers carry music, sound effects, and some dialogue, it's the center speaker and the surrounds that keep a movie theater from having any "cheap seats" as far as sound is concerned. How can you duplicate this setup at home? Connecting two ordinary speakers to your TV (which must be equipped with stereo) is a start, but there's still the problem of sound localization. With speakers on the left and right, a listener must sit exactly in the center to maintain the illusion that dialogue and other sounds are coming from the screen. This characteristic is what makes Floyd Toole, vice president of engineering at Harman International and a pioneer in sound reproduction, call stereo "a spatially deprived, solitary experience." Fine for one person listening to music, perhaps, but not for a family watching a movie. A correctly installed home-theater system has a center speaker above the TV screen (or as close to it as possible), right and left speakers on the sides, and at least two surround speakers positioned above and to either side of the main listening area. Adding speakers does little good unless there are channels of sound to play through them. That's where the audio-video receiver comes in. While stereo music is recorded in two tracks, movie sound is recorded in at least four. Early versions of movie surround sound required up to six channels imprinted on separate magnetic strips on the film. Recording the soundtrack and playing it back in the theater required expensive and cumbersome equipment. In 1976, Dolby Laboratories devised an economical way to encode four channels of sound -- right, left, center, and surround -- and compress them on just two tracks. Depending on the equipment in the theater, the resulting soundtrack, called Dolby Stereo, can be played in mono or stereo, or can be "unlocked" by a decoder for full four-channel surround sound.

BY THE TIME the market for rental movies took off in the early Eighties, some 500 films were available in Dolby Stereo. The surround-sound encoding survived intact when these were transferred to VHS tape, so that a built-in software base awaited the arrival of Dolby decoders for the home. The first, introduced in 1982, was called Dolby Surround. It was expensive and required separate pieces of equipment to decode the soundtrack and power the extra speakers. Although it had a separate channel for the surround speakers, it still relied on the left and right speakers to create the effect of a center channel, like ordinary stereo. Sales were slow and largely limited to audiophiles and hobbyists until 1987, when Pioneer introduced a $650 audio-video receiver with ( the decoder and amplifiers built in. That was also the year Dolby introduced Pro Logic, a more sophisticated decoding system that provides a separate channel for the center speaker. While basic Dolby Surround is still on the market, 88% of the receivers sold today use Pro Logic. Finding an audio-video receiver with Dolby decoding is easy. Because the company licenses its technology to many manufacturers, you'll see the Pro Logic or Surround trademark on dozens of components in every price range. (If you've purchased a stereo receiver recently, you may already own a Pro Logic receiver without realizing it.) Many receivers also incorporate a form of digital processing for recorded music, called DSP. To play movies in surround sound you'll also need either a laser disk player or a stereo VCR. (A mono VCR plays only part of the information on the soundtrack.) At about $300, stereo VCRs are at least $100 cheaper than laser disk players and have the added benefit of being able to tape movies, but the picture they produce is of much poorer quality. True movie enthusiasts opt for laser disk players, which offer resolution of 400 or more lines, vs. the VCR's 250. Keep in mind that the larger your TV screen, the more obvious this difference becomes. No matter which type of player you choose, it's hard to make a mistake as long as you buy a well-known brand from a reputable dealer. More difficult decisions come into play when picking a TV and speakers that are right for your listening and viewing preferences, your budget, and the room you'll be using. The best place to start is by finding a good demonstration of a system in your price range. Bring along movies you are familiar with so that you can see how the equipment compares with what you have at home. Words, including this story, can go only so far toward describing the home-theater experience. Says John Kellogg, a vice president of CurtCo Publishing, which publishes Home Theater Technology magazine: "Trying to sell somebody a home theater by talking about the technology is like trying to sell a luxury car without a test drive."

GETTING a good test drive has been difficult in the past, especially at large retail chains. The consumer could walk past a dazzling array of hundreds of televisions, receivers, and VCRs, only to find few, if any, in a working home- theater setup. Manufacturers have been helping retailers find a solution. Last year Sony introduced a turnkey retail display called e3 with all the necessary components set up just as they would be in a home. At the touch of a button, a laser disk player kicks in with a presentation that explains home- theater basics and shows clips from films like Cliffhanger and In the Line of Fire in large- and small-picture format, with and without surround sound. Some 100 retailers across the country have e3 in their stores, and another 150 have placed orders for it. Its popularity suggests that an effective demo can move components off the shelves that might otherwise sit gathering dust. Pioneer and Yamaha also provide retailers with demo disks, and speaker-maker JBL plans a similar approach for displaying its home-theater speaker systems in 1995. Independent retailers that specialize in home theaters sometimes have four or five working demos at various prices. At the Good Guys!, a California chain where each store now has three dedicated demo rooms, home-theater sales are up 25% over last year and account for 10% of consumer electronics purchases. Even Sears has demo systems in its stores and cross-trains employees to sell both audio and video gear. Wherever you opt to shop, you'll need a competent salesperson for a purchase this complex. Make sure he or she asks the right questions: What equipment do you own already? Does it make more sense to upgrade it or start from scratch? What kind of room will your home theater be in? What will you mainly use the system for -- movies, sports, music videos? Most retailers say it takes at least an hour to explain home theater to a novice and recommend a basic system. Bjorn Dybdahl, owner of Bjorn's Audio Video in San Antonio, advises, "If you walk in and say you're interested in home theater, and the salesperson says, 'I have one you can buy right over here,' turn around and walk out." When choosing a television and speakers, think carefully about how much space they'll take up and how they'll look in the room you have in mind. That includes consulting your spouse before making any final purchase decisions. Notes Larry Poor, head of technology marketing at Dolby: "The divorce factor of some equipment is pretty high." A front- or rear-projection TV may fit the bill if your budget and room are on the large side. Front-projection TVs use a projector that hangs from the ceiling behind the seating area, just like in a movie theater. Screen sizes start at 52 inches; the average cost for a projector and screen is $1,335. The more commonly used rear-projection televisions look like giant ordinary TVs and come with big prices to match. They range in screen size from 42 inches to 62 inches, and in price from $2,000 to $50,000. If you're interested in upscale speakers, there are more than 130 speaker manufacturers in the U.S. who'll be happy to oblige. Many of the more expensive models are part of a complete Home THX Audio System certified by Lucasfilm, the company that brought you Star Wars and three other films that have won Academy Awards for their soundtracks. Like Dolby Laboratories, Lucasfilm licenses its technology to manufacturers and does not build equipment itself.

THE AIM of THX licensing is to set a standard for the design and configuration of audio components so that when a movie plays, it will sound the way the director intended when the soundtrack was mixed. In practice, this means adding special circuitry, punching up the subwoofers, using surround speakers that bounce sound off walls to create a feeling of spaciousness, and making sure the speakers match properly so sounds don't change character as they move around the room. Not surprisingly, all this adds to the price -- complete THX audio systems start at about $3,500. If you can afford to spend this much on equipment, you can also probably afford to make it disappear. Professional installers will run wires behind walls, build custom cabinets for your components, and mount and paint speakers so they blend in with your wallpaper. The best custom installers belong to Cedia, the Custom Electronic Design & Installation Association. The effort involved in this type of installation explains why most are done in new houses where the home theater is planned before the foundation is laid. Dr. Jay Lawrence, a retired radiologist living in San Antonio, built a house just so he could have the media room of his dreams. Working with technicians from Bjorn's Audio Video, he designed a room around his $30,000 system, adding crossbeams in the ceiling and a bay window to provide lots of reflective angles for the best acoustics. Says Lawrence: "I use my system every day. The movie sound is spectacular, and you can't come to my house now without getting an introduction to my favorite opera singer." If you're confined to an apartment or one-story ranch house and have no plans to add a media wing, there are still plenty of options for equipment that will fit into your living room and budget. Thomson Consumer Electronics, ( maker of the RCA, GE, and ProScan brands, offers 27-inch TVs starting at a list price of $499. Many speaker manufacturers offer home-theater packages designed to fit smaller spaces. JBL's SoundEffects line uses compact satellite speakers for the center, sides, and surrounds, while one or two subwoofers supply the bass. A six-speaker set costs $1,168; adding a wireless radio transmitter for another $599 eliminates the headache of running wires from receiver to speakers. Installing all those speakers and components yourself is possible but daunting. If you can't even set the clock on your VCR, it might be better to ask your retailer for help. Most will hook up the components as part of the purchase or for a small fee. For intrepid do-it-yourselfers, here's a little free advice. Even if you fail to position your speakers exactly as the manufacturer prescribes, don't despair: Your system will still sound 100% better than what you were listening to on a TV with puny monaural speakers. For more information, Cambridge SoundWorks, the largest direct marketer of home-theater equipment, offers two free booklets, "Getting the Most From Your Dolby Surround System" and "How to Hook It Up"; Dolby Laboratories also has a free booklet called "A Listener's Guide to Dolby Surround." The best way to contain the risk of home-theater-induced marital strife is to choose appealing cabinetry. Until a few years ago, the options for housing mammoth TVs were limited to expensive custom-made cabinets and sterile-looking rack systems. Many a marriage was sorely tested by what people in the industry call the Wife Acceptance Factor (WAF), meaning the understandable reluctance of the spouse (historically the wife) to have the living room look like the control room of the Starship Enterprise. Lately furniture manufacturers have been coming up with ways to showcase -- or hide -- home-theater components attractively and economically. Home theater is the newest sales category at Pennsylvania House, a division of LADD Furniture in High Point, North Carolina. The company offers full-wall units in 15 styles, starting at $3,000. Each unit has space for an oversize TV, a center speaker, front speakers, components, and a collection of tapes or laser disks. Sony, Thomson, Matsushita, and other consumer electronics companies have formed partnerships with furniture makers. Some electronics dealers now sell furniture too. After you've bought your home theater and found an attractive way to store it, you're ready to pick something to play on it. Several thousand movies with surround sound are available on VHS tape, laser disk, or both. TV shows broadcast in surround are becoming numerous, with 30 currently running, including Melrose Place, Northern Exposure, and all of Fox's NFL football games. Music recorded in surround sound is still scarce, with only 200 or so titles, mostly from movies or Broadway shows. The next generation of Dolby surround, called AC-3, will use six discrete digital channels of sound and will be better suited to reproducing the subtleties of music than the current scheme. The first component with AC-3, a laser disk player from Pioneer, is due to go on sale in 1995. Programming options for home theater are sure to multiply. With its excellent picture and CD-quality sound, RCA's wildly successful new digital satellite system, DSS, is a natural for home theater. At least one hit videogame, The 7th Guest, is already available in surround sound, and more will follow. Experts expect some form of recordable videodisk to replace the VHS tape eventually; already Philips's Compact Disc-interactive (CD-i) game consoles play movies on standard-size compact disks called Video CDs. There will be 50 titles available in the format by the end of this year. Home theater is likely to evolve with computers and telecommunications equipment into some sort of info-entertainment supersystem. Harman Interactive Group, a new division of Harman International, is introducing software next year that will let you connect your PC to your VCR and use your home theater to play computer games. Bell Atlantic plans to incorporate Dolby AC-3 chips in the set-top boxes used in some of its future interactive TV trials, and the federal government is weighing AC-3 as a possible U.S. standard for high- definition TV sound. With all this innovation going on, home theater should be able to avoid the fate of the dinosaurs in Jurassic Park, if not for 150 million years, then at least for a long, long time.


JURASSIC PARK Sound effects lend terror to the almost-but-not-quite-real-looking dinos.

THE PIANO Surround sound sets off to perfection the lush musical score and the forest noises.

BRAM STOKER'S DRACULA Creaking gates, howling wolves: It's a radio horror show with images added.

ALWAYS Low-flying planes and roaring forest fires will have you running for shelter.

TERMINATOR 2 Gunplay and special effects make this the archetypal big-screen demo flick.