It is best known for its Beatnik technology, which was used to provide sound in small file sizes on websites[1] and later in billions of phones during the 2000s to play polyphonic ringtones,[2] with its key clients being Nokia, Sony Ericsson, Samsung, and various other manufacturers.

[3] In 1993, Thomas Dolby co-founded the company with Mary Coller, as he was frustrated that there was a lack of tools available to develop interactive audio.

[4][5] Prior to this, Dolby had created an exhibition at Guggenheim Museum, New York[6] named the Virtual String Quartet, which was programmed by Eric Gullichsen.

[7] In 1996, Headspace announced its acquisition of music publishing company Power of Seven, founded by Psykosonik frontman Paul Sebastien.

[8] In addition to Dolby and Sebastien, Headspace also employed other composers including Brian Salter, Blake Leyh, and Kim Cascone.

This led to the development of the Rich Music Format (RMF), primarily utilized to play audio over the internet at small file sizes while allowing for the use of custom instrument samples.

[13] With this format being a software solution, Dolby considered this to be saving physical space within the devices, while satisfying the needs of television viewers wanting audio to accompany the internet.

[17] David Bowie's website also featured an RMF version of his song "Fame", where users could select what layers of the track they wanted to hear.

As a result, the sound quality was considered tinny, and Dolby and his team were privately embarrassed about it; he feared that people would blame him for the "global ringtone plague".