Sony to Install Digital Sound in AMC Theaters : Movies: $25-million deal could establish the firm as the leader in its battle against DTS and Dolby.

Sony Corp. scored a victory in the digital movie soundtrack wars Wednesday by signing an estimated $25-million deal to install its Sony Dynamic Digital Sound system in AMC Entertainment theaters.

The agreement calls for AMC to purchase 1,700 SDDS digital film playback units for exclusive use in its theaters. The Kansas City, Mo.-based chain has 1,618 screens, with roughly 400 more planned or under construction. Sony executives described the agreement as the largest commitment ever by a theatrical exhibitor to a digital cinema sound system.

The pact also has the potential to establish Sony as the leader in a battle against two key rivals: Digital Theater Systems of Westlake Village and Dolby Laboratories of San Francisco. Each is pushing to become the industry standard for digital movie sound. Most analysts are convinced that only one standard will prevail.

Digital movie sound quality is similar to that of compact discs. It offers crystal-clear tones free of the snaps and pops sometimes found on traditional movie soundtracks.

In addition to installing SDDS at AMC theaters, Sony will introduce the system in at least 150 of its 900 Sony (formerly Loews Theatres) by the end of the year, according to SDDS President Jim Fiedler.

So far, exhibitors have been reluctant to commit to one digital movie sound format over another, although a few have been investing in multiple formats because of the rising popularity of digital sound with audiences. Stanley H. Durwood, AMC’s chairman and chief executive, said his company felt the time was right for a commitment.

“There’s only room for one system, and this is it,” Durwood said. “This is a signal to all. They better get on the bandwagon.”

Sony has been talking to all the motion picture studios about SDDS, and it expects to see its format on non-Sony Pictures Entertainment movies soon. Despite delays in getting the system to market, Sony of America President Michael P. Schulhof said he is confident of its prospects.

“Studios follow the marketplace,” said Schulhof, a onetime physicist who helped introduce digital audio technology in the United States in the 1970s.

AMC’s Durwood said the chain will install 350 SDDS units before Christmas in key theaters around the country, including the AMC Century City multiplex, where “The Next Karate Kid” will open Aug. 5 as the first film in major release featuring SDDS.

Durwood said AMC decided to go with Sony’s system because of superior quality, despite its higher cost. “It’s pricey,” he said, “but the quality, consistency and dependability are with SDDS.” At $13,800 a theater, SDDS is more expensive than DTS and Dolby.

Bill Mead, Dolby’s vice president of film marketing, downplayed the significance of the announcement. “It’s business as usual. We’re going to proceed along,” he said. Dolby’s hardware has been installed in 700 to 800 theaters worldwide.

Mead said exhibitors should realize it’s in their best interest to do business with a company not under the influence of a major studio.