I thought it interesting that Danny Dulai, the founder and COO of Roon Labs, was recently rather candid in describing for the first time how he pays for MQA, and how thats changed somewhat recently in a way he never signed up for.
Taking a step back, it's worth noting that Danny has always supported the offering of MQA on Roon as meeting customer demand, and while he tolerates most MQA discussion on the Roon forum, he does draw the line when it comes to outright bashing or attacks. Fair enough on all accounts there.
Danny has also admitted at times that there are legitimate concerns for the consumer with regard to MQA's play to dominate the entire music streaming distribution chain, with licensing fees at every stop, and less consumer choice when combined with the record label's concurrent strategy of "one deliverable", that being a 44.1 or 48kHz MQA encoded file that gets upsampled. So Danny offers the MQA "1st unfold" on Roon while acknowledging there are legit concerns about what it potentially means to consumers.
But the MQA lock down of information by means of very heavy handed NDAs means very little has ever really been discussed previously about what kind of costs are involved and how those might get passed along to consumers, because of course they do, all costs are eventually borne by the end user in some way unless a particular business is feeling charitable enough to give something away, which is almost never the case, not long term anyway.
But the somewhat recent exchange I saw on the Roon forum was one of the more revealing in terms of costs, specifically Roon's cost to offer MQA. To me it signaled yet more cracks in the scheme, and this time one of MQA's champion integration partners (Roon) is sounding less than happy.
Danny revealed that MQA invoices Roon directly, not through TIDAL. So Roon somehow phones home the MQA streams accessed by its subscribers, and that information is used to build a monthly invoice. Danny revealed that Roon does not pay a flat licensing fee to offer MQA, they are billed on a per stream basis. I've never seen any other mention or disclosure of anything like that, and it got a lot more interesting from there.
Danny said that Warner Music Group's recent decision to remove all standard Redbook CD content in favor of MQA only, has had a profound and negative effect on what they pay MQA. In other words, with the removal of the consumer choice to access a Warner Music Group album as a standard Redbook stream, the number of MQA streams accessed by TIDAL subscribers naturally went up, way up, and so did MQA's invoice amount to Roon. Danny indicated that wasn't what he had originally signed up for, and he's right, though the devil will be in the details of his contracts with MQA and TIDAL.
So looking at Roon's end user subscription model, either their monthly rate or their lifetime flat rate, and there had been some previous cost attributed to offering those subscribers MQA and TIDAL integration. But now with the help of Warner Music Group, TIDAL has blown up that cost calculation. Whatever the baseline quantity of MQA streams that had been used in the calculation previously is now off the table, because Roon's TIDAL subscribers can only stream WMG 16-bit streams in MQA.
So what happens then if WMG goes all-in and removes their 24-bit PCM catalog from TIDAL as well, in keeping with their previously stated goal of "one deliverable"? Roon's invoice from MQA would skyrocket again. Moreover, what then if the rumor that Universal Music is next in this plot, and they take the first step in removing their standard 16-bit content in favor of MQA only streams? Another nice lift in revenue to MQA, and another hit to Roon's bottom line. Of course you'd then expect the labels and MQA to take that to the extreme and eliminate Universal's 24-bit PCM streams, all the while Sony Music steps into the on deck circle.
And yet I doubt it would ever reach that point, Roon Labs would of course have to drop TIDAL and MQA under such a circumstance, but it's interesting that WMG with their longstanding ties to MQA's CEO Mike Jbara would tag team a top integration partner of MQA in extracting revenue, looks like a desperate bite the hand that feeds from MQA, with their yearly £5 million losses stacking up, £28 million and growing at last count.
This also could be payback of sorts, the Roon Labs guys are former Sooloos employees that left after Sooloos was acquired by... Bob Stuart and the Compagnie Financière Richemont SA-owned Meridian Audio in 2008. Bob was at that time pushing yet another closed proprietary hardware strategy like that of his failed DVD-Audio/MLP foray, and the Sooloos guys rightly saw the future as software, so they walked and subsequently formed Roon Labs.
Taking a step back, it's worth noting that Danny has always supported the offering of MQA on Roon as meeting customer demand, and while he tolerates most MQA discussion on the Roon forum, he does draw the line when it comes to outright bashing or attacks. Fair enough on all accounts there.
Danny has also admitted at times that there are legitimate concerns for the consumer with regard to MQA's play to dominate the entire music streaming distribution chain, with licensing fees at every stop, and less consumer choice when combined with the record label's concurrent strategy of "one deliverable", that being a 44.1 or 48kHz MQA encoded file that gets upsampled. So Danny offers the MQA "1st unfold" on Roon while acknowledging there are legit concerns about what it potentially means to consumers.
But the MQA lock down of information by means of very heavy handed NDAs means very little has ever really been discussed previously about what kind of costs are involved and how those might get passed along to consumers, because of course they do, all costs are eventually borne by the end user in some way unless a particular business is feeling charitable enough to give something away, which is almost never the case, not long term anyway.
But the somewhat recent exchange I saw on the Roon forum was one of the more revealing in terms of costs, specifically Roon's cost to offer MQA. To me it signaled yet more cracks in the scheme, and this time one of MQA's champion integration partners (Roon) is sounding less than happy.
Danny revealed that MQA invoices Roon directly, not through TIDAL. So Roon somehow phones home the MQA streams accessed by its subscribers, and that information is used to build a monthly invoice. Danny revealed that Roon does not pay a flat licensing fee to offer MQA, they are billed on a per stream basis. I've never seen any other mention or disclosure of anything like that, and it got a lot more interesting from there.
Danny said that Warner Music Group's recent decision to remove all standard Redbook CD content in favor of MQA only, has had a profound and negative effect on what they pay MQA. In other words, with the removal of the consumer choice to access a Warner Music Group album as a standard Redbook stream, the number of MQA streams accessed by TIDAL subscribers naturally went up, way up, and so did MQA's invoice amount to Roon. Danny indicated that wasn't what he had originally signed up for, and he's right, though the devil will be in the details of his contracts with MQA and TIDAL.
So looking at Roon's end user subscription model, either their monthly rate or their lifetime flat rate, and there had been some previous cost attributed to offering those subscribers MQA and TIDAL integration. But now with the help of Warner Music Group, TIDAL has blown up that cost calculation. Whatever the baseline quantity of MQA streams that had been used in the calculation previously is now off the table, because Roon's TIDAL subscribers can only stream WMG 16-bit streams in MQA.
So what happens then if WMG goes all-in and removes their 24-bit PCM catalog from TIDAL as well, in keeping with their previously stated goal of "one deliverable"? Roon's invoice from MQA would skyrocket again. Moreover, what then if the rumor that Universal Music is next in this plot, and they take the first step in removing their standard 16-bit content in favor of MQA only streams? Another nice lift in revenue to MQA, and another hit to Roon's bottom line. Of course you'd then expect the labels and MQA to take that to the extreme and eliminate Universal's 24-bit PCM streams, all the while Sony Music steps into the on deck circle.
And yet I doubt it would ever reach that point, Roon Labs would of course have to drop TIDAL and MQA under such a circumstance, but it's interesting that WMG with their longstanding ties to MQA's CEO Mike Jbara would tag team a top integration partner of MQA in extracting revenue, looks like a desperate bite the hand that feeds from MQA, with their yearly £5 million losses stacking up, £28 million and growing at last count.
This also could be payback of sorts, the Roon Labs guys are former Sooloos employees that left after Sooloos was acquired by... Bob Stuart and the Compagnie Financière Richemont SA-owned Meridian Audio in 2008. Bob was at that time pushing yet another closed proprietary hardware strategy like that of his failed DVD-Audio/MLP foray, and the Sooloos guys rightly saw the future as software, so they walked and subsequently formed Roon Labs.
