MikeyFresh

Moderator
Staff member
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.
 

MikeyFresh

Moderator
Staff member
Amazon HD for me, $7.99. That's pretty compelling. Even if I liked MQA better, I know myself well enough that I won't pay the extra $.
Now depending on what Spotify does, I may consider them.
As discussed in that thread, that is going to be a tough one to beat, other than the current integration options won't suit everyone.

But tons of people already have Prime, and Amazon can afford to let Music HD be a loss leader indefinitely. I wasn't too surprised that Apple had a plan and strategy to one-up Spotify's announcement of CD-quality coming soon, they were obviously poised to unleash their own plan at the time of their choosing. What I did not anticipate, but in retrospect makes perfect sense, is that Amazon was also all set to pounce, and do so on a cost basis that can't be beaten, even Apple Music is going to come in just a tad higher.

Moot for me in that the integration options don't suit me, and while Spotify Connect would work for me, I doubt I'd drop Qobuz for it over a few bucks a month, I'd probably just convert my month-to-month Qobuz subscription to the yearly plan that drops me to the equivalent of $12.99/mo. and keep the hi-res catalog, at least until such time as Qobuz is no more. Sadly I think we are staring that inevitability in the face now, I'm not sure how either TIDAL or Qobuz is gonna make it once Spotify, Apple, and Amazon make their services available in all regions.
 

MikeyFresh

Moderator
Staff member
And I can definitely see a subjective case for it. It does sound different, though I think it’s less different sounding than both it fans and detractors and especially professional reviewers make it seem in these discussions.
So not the jaw-dropping birth of a whole new world, in which you need to rush out and buy an MQA compatible DAC, and subscribe to TIDAL Masters, and use software that does the 1st unfold, lest you are hopelessly missing out on the best thing since bread was first sliced?
 

JohnVF

Administrator
Staff member
I think a lot of this will end up being moot. MQA, despite its efforts, will never dominate streaming. Spotify won't pay them, and Apple? Yeah, right. It's had years to become more than a niche thing that certain people want/demand, and hasn't grown. The ship has sailed, and its increasingly more about whether or not it will continue to be a thing at all, rather than be a thing that takes over..especially as the big players move to lossless/ high-resolution.
 

JoeThePop

Known member
I'm not sure how either TIDAL or Qobuz is gonna make it once Spotify, Apple, and Amazon make their services available in all regions.
I wonder. I would venture to guess 99% of those that subscribe to these services are self-described audiophiles, and so their services are already a niche product. Will there be some loyalty there, coupled with not wanting to give the big boys their business? This pie chart of global subscribers (2020) shows that Tidal, Qobuz, and the like are fighting for 14% of the pie. There will be some defections from that slice to the big boys, but could at least one of the niche services possibly survive if others drop out?

1621612180353.png
 

MikeyFresh

Moderator
Staff member
I wonder. I would venture to guess 99% of those that subscribe to these services are self-described audiophiles, and so their services are already a niche product. Will there be some loyalty there, coupled with not wanting to give the big boys their business? This pie chart of global subscribers (2020) shows that Tidal, Qobuz, and the like are fighting for 14% of the pie. There will be some defections from that slice to the big boys, but could at least one of the niche services possibly survive if others drop out?

View attachment 36510
I guess that could be possible, though unlikely when you consider they all currently lose money every quarter and that's not going to be sustainable forever. But if what you describe comes to be, I'd certainly be rooting for Qobuz as that niche survivor.
 

JohnVF

Administrator
Staff member
Another thing to consider is that Tidal was somehow losing money hand over fist at $20 a month- how are they going to compete? They have to become something that's more different than just offering MQA as their unique selling proposition, as its not proven to be the siren call they've needed it to be.
 

JoeThePop

Known member
Another thing to consider is that Tidal was somehow losing money hand over fist at $20 a month- how are they going to compete? They have to become something that's more different than just offering MQA as their unique selling proposition, as its not proven to be the siren call they've needed it to be.
Yeah at the rate they are losing money, it makes me think that their business model was based on more than just the number of subscribers they felt they could pull away from other services, and any new streaming subscribers. Lends weight, I think, to the argument that they wanted to make the bulk of their money through licensing fees.
 

JohnVF

Administrator
Staff member
Yeah at the rate they are losing money, it makes me think that their business model was based on more than just the number of subscribers they felt they could pull away from other services, and any new streaming subscribers. Lends weight, I think, to the argument that they wanted to make the bulk of their money through licensing fees.
Being as they were recently bought, and for quite a bit of money, I have to assume that there's some kind of plan to become something more unique- that or Jay Z is just a really good salesman? I don't assume Jack Dorsey to be an idiot so am curious what's up, unless he was fed a big story about how he could "own digital music" through MQA. I get why its attractive- PCM is free. MQA can be licensed. But the reality is, since the difference hasn't proven to be in demand outside of a subset of audiophiles, they're trying to sell bottles of sand at the beach. So then, what does Tidal become? The recent moves by Apple and Amazon may push their hand.
 

MikeyFresh

Moderator
Staff member
Yeah at the rate they are losing money, it makes me think that their business model was based on more than just the number of subscribers they felt they could pull away from other services, and any new streaming subscribers. Lends weight, I think, to the argument that they wanted to make the bulk of their money through licensing fees.
Certainly remains to be seen exactly what Jack Dorsey saw in TIDAL that he valued at $201 million. It looks now like there is at least some aspect of marrying it up to payments processing technology and the sweet spot of Square for example. If true, that immediately makes them a record label foe, and thus probably unlikely to continue on with MQA past whatever contractual obligation they currently have.

Theories there involve a solving of the long standing problem of record label "shoddy accounting" (read: cheating) of artist royalty payments, and even the previously discussed potential future in which new artists don't sign with a big 3 record label at all, they sign directly with Spotify or TIDAL for example, and get paid by them directly, cutting the greedy cheater record labels out entirely.

But that rumor of Jack trying to turn the payments thing upside down via blockchain for the tracking and issuing of payments that are currently fraught with inaccuracy and downright fraud as proven in the courts many times in the past seems plausible, it it looks like Dorsey sees the possibility of easily disrupting the payments side of the music business. It's also interesting to note that TIDAL themselves have been in court over this same issue, after reporting absolutely impossible numbers of streams with only a certain select handful of artists including Beyonce, and Kanye West.
 

JohnVF

Administrator
Staff member
Certainly remains to be seen exactly what Jack Dorsey saw in TIDAL that he valued at $201 million. It looks now like there is at least some aspect of marrying it up to payments processing technology and the sweet spot of Square for example. If true, that immediately makes them a record label foe, and thus probably unlikely to continue on with MQA past whatever contractual obligation they currently have.

Theories there involve a solving of the long standing problem of record label "shoddy accounting" (read: cheating) of artist royalty payments, and even the previously discussed potential future in which new artists don't sign with a big 3 record label at all, they sign directly with Spotify or TIDAL for example, and get paid by them directly, cutting the greedy cheater record labels out entirely.

But that rumor of Jack trying to turn the payments thing upside down via blockchain for the tracking and issuing of payments that are currently fraught with inaccuracy and downright fraud as proven in the courts many times in the past seems plausible, it it looks like Dorsey sees the possibility of easily disrupting the payments side of the music business. It's also interesting to note that TIDAL themselves have been in court over this same issue, after reporting absolutely impossible numbers of streams with only a certain select handful of artists including Beyonce, and Kanye West.
I just don't know how Tidal would be the entity to shake things up. It just doesn't have the numbers and without the numbers, it doesn't have the influence.
 

MikeyFresh

Moderator
Staff member
I just don't know how Tidal would be the entity to shake things up. It just doesn't have the numbers and without the numbers, it doesn't have the influence.
There is the thought of those "artist exclusives" and the idea that with Jay-Z influence and a story of fair blockchain payments, they could sway artists to make their catalog exclusive to TIDAL which does change things, as content is of course king.

Far-fetched at this juncture? I'd say yes, especially since so many artists have a lousy existing deal with their label in which they don't have complete control anyway. Then again maybe the gig is up and a whole new wave of artists would sue to end their current record label contract based on allegation of fraud, I wouldn't be entirely surprised by such a thing, there is precedent there.
 

JohnVF

Administrator
Staff member
There is the thought of those "artist exclusives" and the idea that with Jay-Z influence and a story of fair blockchain payments, they could sway artists to make their catalog exclusive to TIDAL which does change things, as content is of course king.

Far-fetched at this juncture? I'd say yes, especially since so many artists have a lousy existing deal with their label in which they don't have complete control anyway. Then again maybe the gig is up and a whole new wave of artists would sue to end their current record label contract based on allegation of fraud, I wouldn't be entirely surprised by such a thing, there is precedent there.
Also from what I've seen, Jay-Zs influence is a generation removed from what really matters to a lot of listeners these days. I don't know that Billie Eilish and Dua Lipa fans care about Jay Zs take on music? Beyonce is about their biggest draw right now. Can you stream Beyonce on Spotify or does Tidal have a lock? Probably not the right crowd to ask.
 

JohnVF

Administrator
Staff member
Given how crudely this photo was manipulated to just have "artists" in focus, that's certainly a clue as to their plans. But what about the customers? Given how most people wrongly assume all music-makers to be wealthy, I'm not sure selling people on the upkeep of artists is going to be easy. I'm genuinely curious what they have planned, though. I'd love there to be a successful entity that really does give artists a fair shake. And I'd loooooooove for the major labels to be scared, and finally pay for how they've treated artists.


Evoydb1UUAUcF1j.jpg
 

JohnVF

Administrator
Staff member
This actually makes the most sense to me:

"So, what you’re really left with here is a deal that looks like a way for Jack Dorsey to move money from his publicly traded company to a company owned by a guy he likes to hang out with."

From this great article on the whole thing:


I didn't realize that Square had 3 billion in cash on hand. Maybe Jack Dorsey just wanted to throw his buddy a bone, and play with a company that had options for doing something seemed more fun to him? Whether it ever makes money or not...
 

JoeThePop

Known member
I didn't realize that Square had 3 billion in cash on hand. Maybe Jack Dorsey just wanted to throw his buddy a bone, and play with a company that had options for doing something seemed more fun to him? Whether it ever makes money or not...
Yep
"Which wouldn’t be the first time someone in a boring business has spent a lot of money to sidle up to an entertainment business. In fact, that dynamic is a core feature for Hollywood."

I totally forgot about Dorsey buying Tidal. And its interesting once you get outside our little world of audiophilia, the article does not mention MQA.
 

JohnVF

Administrator
Staff member
Yep
"Which wouldn’t be the first time someone in a boring business has spent a lot of money to sidle up to an entertainment business. In fact, that dynamic is a core feature for Hollywood."

I totally forgot about Dorsey buying Tidal. And its interesting once you get outside our little world of audiophilia, the article does not mention MQA.
I noticed that too...no mention of MQA at all. Which further suggests its not really that big of a deal (or threat).

I read a bit more on it, and could see that maybe Tidal does turn into more of a personalized (and personal feeling) musician/fan transaction site that helps cut out the labels. I'm all for the demise of (major) music labels. Even some of the minor ones are questionable. A friend of mine is on Cleopatra, an indie label but a larger one, and they don't do much of anything for him. Happy to take a cut, though.
 

prime minister

Site Owner
Staff member
You should get rid of the other pressings to save on clutter and just listen to the good one?
In the long term, definitely. But I wouldn't have gotten that one, incredible copy of I hadn't bought a bunch of them.

FWIW, the best sound one was the cheapest one. Great buy for $.99 at a recently closed Buffalo record store.
 

JP

Junior Member
How do you determine what accuracy to the source material actually is?

Assuming by source we mean the recording medium (file, CD, etc.) it's just matter of well engineered components with well engineered interfaces. The hard parts are the transducers at either end and their interaction with their environment.
 
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