HOW WILL THE HI-RES MUSIC TECH FIRM’S WOES HIT TIDAL AND OTHERS?
The recent announcement that MQA Ltd has entered into administration has been one of the most significant news stories of the year so far within the world of audio tech. Things came to a head when the company’s main financial backer began looking for a way out of its investment, and now MQA is itself looking for a way out of what is unquestionably an unenviable financial situation.
The news has implications that reach far beyond the company itself and has raised important questions regarding the future of MQA, its software and the platforms and brands that currently use it. In order to understand the potential effect this restructuring could have on the industry, it’s important to look back at the events themselves, why they have occurred, and what the future holds for MQA and the industry at large.
What is MQA?
MQA stands for Master Quality Authenticated and, put simply, is a means of digitally capturing and storing original master recordings as files that are sufficiently small and convenient to be then streamed or downloaded without the usual loss in fidelity usually experienced with compressed audio files. MQA also paid particular attention to the time-domain behaviour of its files. This means using proprietary compression to essentially ‘fold’ sound to make it streamable and then, via MQA-certified hardware or software, ‘unfold’ it again so that it can be heard.
MQA’s tracks use a comparable bandwidth to that needed to stream CD-quality audio. Tidal, incidentally, is the only streaming service that features MQA and uses it for its high-resolution catalogue of Masters tracks, something that we’ll explore in more depth below.
What has happened, and why?
On 6th April, 2023, the company owning the MQA license, currently trading as MQA Ltd (we are using the term MQA interchangeably), announced via a statement that it was entering administration. This was brought about as “MQA’s main financial backer is seeking an exit”, meaning that the company is now left seeking a replacement to fill the void left after the loss of a major investor.
This, we should point out, is distinct from liquidation, in which a company’s assets are broken up and sold, usually as part of an end-of-life bid to raise capital. MQA Ltd, for now, is still a fully operational brand as it continues to trade and negotiate a route forward.
The big question, then, is why has this happened? The withdrawal of MQA’s key backer, Reinet Investments, has
