MQA going into administration

Streaming Audio
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Interesting i was getting more into MQA.

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There was an earlier thread which is either parked for moderation or has been removed.

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As has been observed many times, MQA was late to the market, a solution to a problem that had been superceded by improved data rates, and which then tried to hang its hat on somehow (fallaciously in most cases I believe) claiming to re-create something closer to the original recording than plain high resolution.

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interesting - and sad at the same time. This was a British technology that appears unfortunately just to have missed the mark commercially - I think they were 10 years too late. Their appeal would be when bandwidth was generally limited and expensive

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Suspect it will be bought by Tidal because Tidal has been the streaming company “pushing it” and lots of people have paid extra for MQA enabled DAC’s partly to listen to Tidal.

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I jumped after seeing Goldensound’s explanation of what MQA is and what it does.

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Boo hoo hoo

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Spot on. In the current context, it is what we call “a solution in search of a problem”.

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Possibly, however on my recent EP distribution, I certainly declined to pay extra (though it wasn’t much and simply involved selecting a tick box) to have my masters transcoded to MQA before being sent to the streaming outlets. It seemed unnecessary and mostly irrelevant now unfortunately, and I suspect as a creator I am not alone.

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Why a formal administration, and simply not sell it as as ‘going concern’? This might suggest a fractured relationship between shareholders and security rights holders.

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Well financially it might not be a viable ‘going concern’ … I am sure the administrator will salvage what parts it can that have a monetary / commercial value.

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Perhaps they lost the creative spark and drive when Allen Boothroyd died a couple of years ago?

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Indeed - but if you are a funder looking for an exit, it’s generally best to avoid any form of ‘insolvency process’, which can affect contractual matters, and (of course) it’s often the contracts which form the ‘value’ of a business, together with IP (hopefully ‘fireproofed’). Of course, one doesn’t know the intricacies of what’s involved here and what’s happened prior to this.

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Don’t disagree, it perhaps is an indication of how bad things are / have become as you surmise

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Seems they are betting on a new SCL6 codec, seemed promising but has also not gained traction or even launched, maybe that is the crux of the issue.

As mentioned certain Tidal will have to step in as MQA is all in for them.

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Tidal certainly went big on MQA, but I wonder how financially useful it is to them. Having split their tiers to effectively MQA/not-MQA with a quite significant cost premium for the MQA tier, do they have enough subscribers for the higher tier to make the MQA charge worthwhile? Probably, but that tariff split will have made it clear to them what the financial value of MQA is to them.

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Great news.

I try to avoid WHF by the way. It’s just a long list of Ads with here and there a snippet of ‘news’.

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The balancing questions they will need to consider are the cost of providing true, unbarstardised hi res, and whether they would lose too much market share if they simply went back to just CD quality.

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Indeed, it’s a tricky position for Tidal trying to find the right market position. The revenue split will also give them useful data in negotiating the unit cost with MQA.

Looking at Tidal’s financial position, their numbers are lumped in with other numbers in their parent’s report, but they’re the lion’s share of that segment apparently. A significant revenue drop from Q4 ‘21 to Q4 ‘22, they show a healthy Gross Operating Profit, but as a presumably capital intensive business (data centre builds) that may not reflect true profitability. The parent company annual report shows it is very cash-rich, so Tidal’s specific financial situation probably isn’t relevant if the Block group decide MQA is worth buying for Tidal’s future.

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I suspect that whether it’s worth anyone buying MQA out of administration depends on what if any ongoing costs a buyer would incur. Some of that will depend whether MQA owns the IPR or merely licences it from the inventor.

Buying MQA as a way to avoid licensing costs as you gradually disengage your future business strategy from MQA might make sense to someone like Tidal, but there is a real risk of throwing “good money after bad” here. I doubt that MQA has a future in itself though. But then I was never persuaded by the hyperbole, even if technically it is clever.

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