Dolby Digital is the name for audio compression technologies developed by dolby laboratories. Originally named Dolby Stereo Digital until 1994, except for Dolby TrueHD, the audio compression is lossy. The first use of Dolby Digital was to provide digital sound in cinemas from 35mm film prints; today, it is now also used for other applications such as TV broadcast, radio broadcast via satellite, digital video streaming, DVDs, Blu-ray discs and game consoles.
Dolby Digital audio is used on DVD-Video and other purely digital media, like home cinema. In this format, the AC-3 bitstream is interleaved with the video and control bitstreams.
The system is used in bandwidth-limited applications other than DVD-Video, such as digital TV. The AC-3 standard allows a maximum coded bit rate of 640 kbit/s. 35mm film prints use a fixed rate of 320 kbit/s, which is the same as the maximum bit rate for 2-channel MP3. DVD-Video discs are limited to 448 kbit/s, although many players can successfully play higher-rate bitstreams (which are non-compliant with the DVD specification). HD DVD limits AC-3 to 448 kbit/s. ATSC and digital cable standards limit AC-3 to 448 kbit/s. Blu-ray Disc, the PlayStation 3 and the Xbox game console can output an AC-3 signal at a full 640 kbit/s. Some sony PlayStation 2 console games are able to output AC-3 standard audio as well, primarily during pre-rendered cutscenes.
Dolby is part of a group of organizations involved in the development of AAC (Advanced Audio Coding), part of MPEG specifications, and considered the successor to MP3.
Dolby Digital Plus (DD-Plus) and TrueHD are supported in HD DVD, as mandatory codecs, and in Blu-ray Disc, as optional codecs.