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Dolby Digital is the trademark for Dolby Laboratories' AC-3 lossy audio compression (or data reduction) system. It is a system for coding and decoding (codec) digital audio sound so that it occupies less space on the recording medium. It is termed lossy because a lossy data compression as these frequencies are not restored on playback.
Its main application is for multichannel audio, but it supports anywhere from 1.0 channels (mono) to 5.1 channels (full surround) and also dual channel (1+1).
"5.1" surround sound consists of:
Dolby Digital 5.1 EX (often, incorrectly, referred to as 6.1) provides a rear centre channel, using a matrix decoder, for the rear surround speakers in a cinema; in a similar fashion to Dolby Pro Logic's extraction of a front centre channel from a 2 channel source. In a home theater application, the additional center rear information is reproduced by two rear surround speakers.
It should be noted that Dolby Digital EX is a second stage in the decoding chain: it is a "bolt on" to the core 5.1 audio compression standard, in order to provide a backward-compatible sixth channel that could not otherwise be accommodated.
These are all different names for the same codec.
Dolby Digital SR-D cinema soundtracks are optically recorded on a 35mm release print using sequential data blocks placed between every perforation hole on the sound track side of the film. A CCD scanner in the projector picks up a scanned video image of this area, and a processor correlates the image area and extracts the digital data as an AC-3 bitstream. These data are finally decoded into a 5.1 channel audio source.
Dolby Digital audio is also 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 many bandwidth-limited applications other than DVD Video, such as digital TV.
On DVD Video, the AC-3 compression algorithm is used on top of a 16 bit 48 kHz PCM bitstream. It supports bitrates between 64 to 448 kbit/s with 384 kbit/s being the normal rate for 5.1 channels and 192 kbit/s the normal rate for stereo.
According to the AC-3 standard, the maximum bit rate is 32 to 640 kbit/s.
Dolby is part of a group of organizations involved in the development of AAC (Advanced Audio Coding), part of MPEG specifications, and also considered the successor to MP3. AAC outperforms AC-3 at any bitrate, but is more complex. The advantages of AAC become clearly audible at less than 400 kbit/s for 5.1 channels, and at less than 180 kbit/s for 2.0 channels.