PCM vs Dolby Digital: Which Audio Output Should You Choose?

TVs, streaming boxes, game consoles and computers often ask you to pick an audio output format, usually PCM, Dolby Digital or a bitstream option. The choice decides which device decodes the sound and what your connection to a soundbar, receiver or headphones can carry. This guide covers that setting only. It does not rank every audio format or every device.

Define the alternatives

PCM (pulse-code modulation, often shown as LPCM) is uncompressed digital audio. When you choose PCM, the source device decodes the soundtrack itself and sends plain digital audio to the output device. The receiver or soundbar then only has to convert it to sound.

Dolby Digital (also called AC-3) is a compressed, lossy surround format. It supports up to 5.1 channels and is common on DVDs, broadcast TV and many streaming titles. When you choose Dolby Digital or bitstream output, the source passes the encoded stream along, and your receiver or soundbar must decode it. Some sources also re-encode other audio into Dolby Digital so it can travel over a connection that cannot carry multichannel PCM.

Dolby Digital Plus, Dolby TrueHD and Dolby Atmos are related but separate formats. If your menu lists them, the same basic question applies: should the source decode, or should the downstream device decode?

Compare meaningful differences

• Connection limits: optical and coaxial S/PDIF carry uncompressed PCM in stereo only, but they can carry 5.1 Dolby Digital. HDMI can carry multichannel PCM. With a TV, standard ARC usually carries stereo PCM plus compressed formats, while eARC adds multichannel PCM. Check the specifications of both devices.
• Where decoding happens: with PCM, the source decodes, so the source must support the soundtrack format. With Dolby Digital passthrough, the receiver or soundbar decodes, so that device must support it.
• Audio data: PCM sends the decoded audio without further compression. Dolby Digital is lossy by design. If a source re-encodes audio into Dolby Digital, that adds another lossy step.
• Controls and processing: with PCM, the receiver may not apply its own format-specific surround modes or dialogue features in the same way. With bitstream output, the receiver's processing and format indicator reflect the original stream.
• System sounds and mixing: in PCM mode, the source can mix menu sounds, notifications or voice chat into the main audio. Behavior in bitstream mode varies by device and software version.

These behaviors depend on firmware and app versions. A setting that works one way on one model may differ on another, or change after an update. Your receiver's format display is the most direct way to confirm what is actually arriving.

Practical trade-offs

Published specifications tell you what a connection or decoder supports. They do not tell you how a setup will sound, how much delay it adds, or whether lip sync stays aligned. Those depend on the specific devices and need a test in your own room.

• Soundbar on optical: PCM gives you stereo only. Dolby Digital lets 5.1 content reach a surround-capable soundbar, at the cost of lossy compression.
• Receiver on HDMI or eARC: multichannel PCM is available, so you can let the source decode or pass the stream through. Compare which option keeps the receiver features you use.
• Older receiver without a newer decoder: PCM lets the source handle formats the receiver cannot decode, so audio still plays.
• Game console: PCM keeps game audio, system sounds and chat in one decoded mix. Some consoles encode game audio to Dolby Digital in real time for optical or ARC links, which may add delay. Measure it with your own setup rather than assuming.
• Computer for video calls or recording: call apps and most desktop audio are stereo, so PCM at a standard sample rate is the simplest output. The format setting does not change your input device, input level or background noise. Configure the microphone separately.

Choose for the use case

• Choose PCM if your link is HDMI or eARC and the source supports your content's formats, or if you mainly listen in stereo.
• Choose PCM if your receiver or soundbar cannot decode a format the source can, or if you want system sounds and chat mixed reliably.
• Choose Dolby Digital or bitstream if you use optical, coaxial or standard ARC and want 5.1 surround from content that already carries Dolby Digital.
• Choose bitstream if you want the receiver to handle decoding and apply its own surround or dialogue processing.
• Avoid forced re-encoding to Dolby Digital for stereo-only listening, since it adds compression without a channel benefit.

After changing the setting, play a known surround clip and a stereo clip. Check the receiver's format indicator, confirm that all speakers respond, and watch for lip-sync problems. If something sounds wrong, switch back and compare. There is no universal winner. The right choice is the one your connection, decoder and content support together.