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Dear Jim Austin,

You wondered a few years ago why some very small revenue numbers for MQA Ltd. were discussed. The answer is we found them on Companies House, the UK's registrar for companies. MQA Ltd., Meridian Audio, and Project Panther Bidco (Tidal) audited financial statements are all easily referenced on their website.

Other easily searched public information told us that Deezer had licensed MQA but never implemented it, Xiami Music a Chinese streaming company implemented MQA and went out of business.

Court records available to anyone with a PACER (Public Access to Court Electronic Records) account showed HDtracks sued 7Digital over failing to deliver a workable MQA streaming service.

Two streaming services failed and Deezer's decision left only Tidal Music as an MQA streaming option.

What does analyzing all this information tell us? Bob Stuart lost a large amount of money this century operating MQA Ltd and Meridian Audio. More than $100 million dollars. Meridian Audio was balance sheet insolvent when they launched MQA. So, they lacked the resources to support the launch. MQA never had a presence in the streaming market. My current estimate is about 300,000 users can decode an MQA file in a market of 600 million subscribers. In the current streaming market, a .05% market share might as well be zero.

Tidal doesn't have the revenue to be anything but a bit player in the streaming market. They recently posted their 2020 statements. Revenue was $192 million. The HiFi tiers are probably less than $40 million. With the HiFi tiers now split there aren't enough users to generate much revenue for MQA Ltd.

Tidal Music's Gross Profit averaged $10 million over the last five quarters, or 18%. Gross Profit averaged 29% from 2015 to 2020. This is significant margin erosion. Hardly the profitable operation you wrote about. The numbers reported by Block Inc. show revenue is flat when 2017 to 2020 growth averaged 17% a year.

Neither MQA Ltd nor Tidal Music can survive without outside investment. MQA was never a feature that could move hardware sales or streaming subscriptions without help. And Stereophile tried to help.

The timeline shows Stereophile published articles about MQA in late 2014 and early 2015. Before Meridian sold MQA IP to investors and investors funded MQA Ltd. Stereophile wrote more articles in 2015 and the first half of 2016 and Warner Music licensed MQA. A few more articles were written in the second half of 2016 and Sony and Universal Music licensed MQA near the end of 2016. Add all the reviews that mentioned MQA, and a pattern emerges, Stereophile tried to manipulate the high-end audio market.

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Topic - Dear Jim Austin, - rt66indierock 09:37:15 11/16/22 (56)
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