A problem with analog tape arose when trying to record material that had a larger dynamic range than the tape did. So, engineers turned to noise reduction.
Noise reduction systems worked by companding the signal, meaning that the signal was dynamically compressed during recording, so that it would fit within the signal-to-noise ratio of the tape. On playback, the signal would be expanded to restore its original dynamic range.
There were two popular analog noise reduction systems, dbx and Dolby. Dbx was founded by David Blackmer, who formerly worked for a company that made medical testing equipment. That company had also had a signal-to-noise issue, in that when sticking medical probes inside a human body, the voltages had to be very low so as not to kill the patient. Blackmer's company had developed a companding system so that the measuring voltages could be low, but the data could still be usable. He saw that this technology could be adapted for audio, and stated his own company to do just that.
Ray Dolby of Dolby Labs had developed both Dolby A, and later Dolby SR noise reduction. Dolby also created and licensed both Dolby B and C noise reduction for cassettes.
Today noise reduction isn't necessary with digital gear, but for those analog tapes, it made a big difference.
