Company CEO Yves Riesel announced the news on the French site. If you can read French, here’s the link to the troubling news. On August 19, 2014, the popular French high-quality download site, was placed in “suavegarde”, a type of “safe guarded” procedure similar to Chapter 11 that will give the company several months to sort out its financial problems. According to the statement, a “suavegarde” is not a default and Qobuz will continue to service its international customers and function normally. The company has been seeking additional funding for several months…and has thus far been unsuccessful.
The statement explains that the company has invested quite heavily in their site, content licenses, a unique streaming technology, and personnel. They claimed that the site adheres to the credo: quality of sound and quality of documentation (I might quibble with their credo as I’ve found both to be suspect…you can read about some problematic downloads here.) and holds high regard for musicians and labels. The Qobuz site has championed European artists with special focus on French artists.
At the close of 2013, Qobuz announced that it would be launching its service in eight additional companies: England, Ireland, Benelux, Luxembourg, Germany, Netherlands, Austria, and Switzerland. The announcement also makes the dubious claim of being the “only service in the world to download ‘True CD Quality’ on the its entire catalog including tracks from the major labels and independents. They also extend that claim to tracks of 24-bits.”
Near the end of the statement, they state: “Comme toutes les Start Up, QOBUZ est en recherche constante de fonds”, which means, “Like all start ups, Qobuz is constantly looking for additional funds.
The business of making high-resolution audio available via downloads has always been challenging. It’s only going to get worse as more and more companies enter the fray with the same content. There are a limited number of music fans that will purchase downloaded music at premium prices…especially when most times they cannot appreciate any difference. Neil Young and Pono are in the same situation as evidenced by their raising over $14 million dollars (6.2 on the player and now over 8 million in equity) using non-traditional fundraising techniques…namely Kickstarter and now Crowdfunder. Maybe professional investors looking at Qobuz see something or rather don’t see the essential elements that make a start up flourish.
High-resolution digital download music companies don’t own any intellectual property. They are merely retail outlets for a niche product that doesn’t look to be expanding any time soon. HDtracks had the entire high-resolution download marketplace to itself for about 6 years. iTrax, the world’s first high-resolution digital music download site, didn’t make license deals for content that isn’t really high-resolution. If I had agreed to the deals at the major labels, I would be getting pretty nervous about sustaining a business that is increasingly fragile.
Qobuz has a beautiful site. It’s full of tracks and lots of information about the albums, the artists, and music. They’ve even gone into the streaming business, which will clearly be the future. But they’re selling music as something that it’s not. They claim 192 kHz recordings that turn out to be upconversions from DSD or analog originals. Unless mass-market consumers experience a dramatic improvement in their music downloads, there will be more companies following Qobuz into the equivalent of Chapter 11.