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ZDNET’s key takeaways

• 360 Reality Audio debuted at CES 2019, with Sony’s sights set on streaming services.
• Apple and Dolby’s partnership made spatial audio mainstream.
• Without a streaming service or significant market share in hardware, Sony’s format floundered.

Every year at the Consumer Electronics Show (CES), tech companies from around the world — household-name conglomerates to half-baked startups — gather in Las Vegas to showcase their upcoming innovations. During the 2019 show, Japanese tech giant Sony announced its 360 Reality Audio spatial audio format.

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The concept had big names behind it — musical royalty such as Pharrell Williams and Mark Ronson, powerful labels such as Universal Music Group and Warner Music Group, and growing music streaming services such as Tidal and Amazon Music.

What Sony did and did not see

Sony had all of the right ideas to innovate the market: leverage its personal audio business to integrate the technology into its headphones, earbuds, and speakers; court music streaming platforms to adopt the audio format; utilize its music recording arm to entice musicians to record albums in the audio format; license its audio format to audio manufacturers willing to pay.

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At the time, Sony dubbed its 360 Reality Audio the “future of music.” Indeed, Sony was spot on about immersive audio being at the core of digital music streaming habits at the turn of the decade; just seven years later, consumers seek immersive audio experiences in nearly all of the digital media they consume. 

What the company failed to foresee was that it wouldn’t be a key player in this future. Sony’s misstep wasn’t that its technology and consumer forecasting were wrong; the company simply wasn’t Apple. 

How spatial audio defined the mid-aughts media

Immersive audio refers to the listener’s experience of being surrounded by audio from all directions. Spatial audio refers to the technologies used to create these auditory experiences, but the terms are often used interchangeably. In the 2010s, spatial audio technologies were gaining popularity in the gaming and movie industries.

In 2012, Dolby Laboratories debuted its groundbreaking Dolby Atmos spatial audio technology at the premiere of Pixar’s “Brave.” Three years later, DTS, Inc. debuted its spatial audio format, DTS:X, at CES 2015. 

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In 2019, both Sony’s 360 Reality Audio and Dolby’s Atmos began appearing on music streaming services, with Tidal and Amazon Music being early adopters. At this time, Atmos was only available to Tidal subscribers with compatible home theater equipment and to Amazon Music subscribers with an Echo Studio speaker.

Though Sony and Dolby were competing for a fast-moving emerging market, Sony’s spatial audio business model could still work. Personalized spatial audio wasn’t a common feature in consumer headphones yet. Manufacturers weren’t yet investing in the hardware or digital signal processing. Plus, Sony was prioritizing optimizing its headphones for spatial personalization before creating a method for third-party manufacturers to join in. 

To enjoy a personalized rendition of 360 Reality Audio, users needed to complete an ear-mapping exercise in the Sony Headphones Connect (now Sound Connect) app. The personalized aspect was limited to Sony headphones, and the technology captured your ear shape to deliver the best possible immersive audio experience. 

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Because Sony’s WH-1000XM3 over-ear headphones and WF-1000XM3 earbuds didn’t have built-in spatial-awareness hardware, users needed to upload clear photos of their ears into the app for Sony to create a personalized spatial audio sound field.

Eventually, Sony’s 360 Reality Audio found its way into several home theater products from Denon, KEF, McIntosh, and Sennheiser, along with Sony’s own home theater speakers and AVRs on top of Tidal, Deezer, and Amazon Music platform support. The influence was spreading.

Control an ecosystem, control your destiny

In the summer of 2021, Apple announced that Apple Music and several generations of its AirPods, iPhones, Macs, iPads, and Beats headphones would support Dolby Atmos streaming and spatial audio with head-tracking. All at once, millions of spatial audio-enabled devices were in consumers’ hands — a novel music experience wrapped in a five-minute software update. The broad term “spatial audio” itself soon became Apple’s “thing.”

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Apple didn’t require a lengthy process of capturing your individual ear anatomy for a personalized experience. Apple opened up its head-tracking capabilities to several pairs of existing Apple hardware, a leg up over Sony, which could never capture a meaningful share of US smartphone, tablet, or laptop users. 

Also, Apple’s first-gen AirPods Pro and second-gen AirPods were nearly two years old, and both had the hardware for spatial awareness. Though Apple had its own spatial audio tech, licensing Dolby Atmos helped the company leverage an existing, proven spatial audio format to attract more users to its music streaming service. 

With Apple’s method, artists could create music in Dolby’s trusted, mature Atmos spatial audio format and upload it directly to Apple Music, without Apple having to create a spatial audio format from scratch. Apple’s Spatial Audio technology in its hardware only needed to handle head tracking for a personalized experience. Sony tried to do it all.  

On top of Sony’s tedious personalization process, it didn’t have Apple’s consolidated streaming audience. In the second quarter of 2021, Apple Music alone had nearly as many subscribers as Amazon Music, Deezer, and Tidal combined.  

Even more, songs on Apple Music encoded in Dolby Atmos can technically be reproduced on any headphones. As long as your smartphone and streaming platform support Atmos, you can use it. Apple’s proprietary spatial audio is what does the head-tracking magic.

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Apple won the way it always does: by controlling its own destiny. From the iPhone in your pocket to the platform you use to stream music, Apple calls the shots. By leveraging its existing hardware and software ecosystem and control over a growing music streaming service, Apple could market spatial audio as a byproduct of its ecosystem, while Sony positioned its spatial audio format as a high-end listening concept that users needed to seek out to experience. 

Though Sony’s 360 Reality Audio and Dolby’s Atmos launched on select music streaming services at the same time in 2019, the market wasn’t ready for them. In 2019, spatial audio music libraries were minuscule, and personal consumer audio hardware hadn’t yet hopped on the wave.

Finally, Sony was forthright about its format’s capabilities, noting that “speaker systems which project sound in all directions will be able to reproduce a 360 Reality Audio experience.” By contrast, Apple didn’t mention the huge difference between listening to Atmos on your phone’s tiny speakers and on a multi-speaker setup. Apple didn’t really explain how spatial audio with Dolby Atmos worked — only that it did, with little effort on the consumer’s end. 

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Apple capitalized on the market at just the right time by launching its spatial audio in 2021. AirPods were in everyone’s ears by then, and Dolby successfully integrated Atmos into several home theater products, blockbuster films, and video games, further establishing its technology as a household name.

360 Reality Audio today

Sony’s 360 Reality Audio is still kicking in 2026, found in Sony’s soundbars, high-end receivers, and more. Still, Atmos’s dominance can’t go unnoticed. Tidal, an early adopter of 360 Reality Audio, dropped support for Sony’s spatial audio format to consolidate its efforts to encode more of its catalog in Dolby Atmos.

Furthermore, Sony seems more concerned with fine-tuning its headphones’ digital signal processing to virtually upmix stereo tracks than pushing the 360 Reality Audio format to consumers. Sony still advertises its audio format on its consumer headphones’ webpages, but its virtual upmixing technologies take the spotlight first.

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The Sony WH-1000XM6 headphones were the company’s first headphones to feature Sony 360 Spatial Sound, the upmixing technology that’s not walled behind a streaming service. 360 Spatial Sound operates like JBL’s Spatial Sound and Bose’s Immersive Audio: the headphones’ processor runs an in-house-made spatial upmixing algorithm to simulate 3D audio.

Without a standardized format (like the one Sony tried to make popular), proprietary spatial upmixes are incredibly unreliable and often degrade audio quality. There’s no doubt that Dolby and Apple deliver the best spatial audio music streaming experience — good things happen inside a closed ecosystem.

I admire Sony’s early and fierce commitment to market innovation; it just couldn’t keep up with the format war that Dolby was destined to win, and Apple helped realize.