Ray Dolby was a pioneering engineer.
While many folks would recognize the name as associated with multi-channel home theater—Dolby Atmos for example—the beginnings of Dolby were an attempt to reduce noise in tape recorders.
Tape recorders have hiss. It's just part and parcel of their process of magnetizing the metal particles on plastic strips of tape.
What Ray Dolby did to reduce that tape hiss was pretty clever.
Dolby A (the first iteration of the Dolby noise reduction system) boosted the volume level of incoming audio when that audio signal was below a certain loudness threshold. On playback, the system reduced the level back again (signal plus noise), thus lowering noise. This system of pre-emphasis (as it was known) is quite similar to how more musical information is pressed into a vinyl record through the RIAA pre-equalization (though the RIAA curve is constant while Dolby is dynamic).
The reduction of tape hiss using Dolby was rather dramatic with up to 10dB of improvement.
The furor over sound quality was equally dramatic.
As with everything in the audio chain, when you manipulate the audio path as did Ray Dolby you change the sound quality. And according to many not for the better.
Soon there were battle lines drawn and the various camps gathered steam. One crowd did not wish their audio signal to be modified and were alright tolerating the tape hiss. The other camp either didn't/couldn't hear the differences or didn't care, preferring the quiet of music without hiss.
When digital came around there was no longer any hiss to eliminate. Dolby Labs (as it had become known) pivoted from noise reduction to promoting multi-channel audio and the rest, as they say, is history.
