Imagine that you live in a world of VHS & Betamax video tape. You only see soft, slightly grainy pictures with drop-out problems all the time. Low quality sound with hissing background audio is common place.
Then, as if by magic, a big 12 inch disc arrives! You now have an opportunity for razor sharp video and Hi-Fi stereo audio in your home.
In its early form (known as LaserVision) the video and audio were encoded onto the disc as analogue signals. The later version (LaserDisc) used analogue for the video signal but, and this is the important bit, digital encoding for the audio tracks.
The LaserDisc format also allowed most users in Europe (including The UK) access to duel-system players, which allowed you to play both PAL and NTSC discs and gave you access to the huge American and Japanese catalogues.
The later NTSC discs could also carry Dolby Digital sound and some even had full-blown DTS available! PAL (european) discs were restricted to Dolby Surround because of limitations in the available bandwith for the video/audio carriers.
The LaserDisc format was going strong as a high-end and collectors format until the arrival of DVD. With the mass market appeal of the small CD sized discs which could be produced cheaply LaserDisc was doomed. LaserDisc is still popular, and collectors around the world still enjoy the format. In Japan, discs were in production until the year 2000.
If you want to play LaserDiscs today. You best option is a duel-system PAL & NTSC player, choose one that can handle analogue & digital soundtracks and if you go for a top-end player it should offer Dolby Digital output (only with NTSC discs of course).