Dr. AIX's POSTS — 01 September 2014

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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.

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About Author

Dr. AIX

Mark Waldrep, aka Dr. AIX, has been producing and engineering music for over 40 years. He learned electronics as a teenager from his HAM radio father while learning to play the guitar. Mark received the first doctorate in music composition from UCLA in 1986 for a "binaural" electronic music composition. Other advanced degrees include an MS in computer science, an MFA/MA in music, BM in music and a BA in art. As an engineer and producer, Mark has worked on projects for the Rolling Stones, 311, Tool, KISS, Blink 182, Blues Traveler, Britney Spears, the San Francisco Symphony, The Dover Quartet, Willie Nelson, Paul Williams, The Allman Brothers, Bad Company and many more. Dr. Waldrep has been an innovator when it comes to multimedia and music. He created the first enhanced CDs in the 90s, the first DVD-Videos released in the U.S., the first web-connected DVD, the first DVD-Audio title, the first music Blu-ray disc and the first 3D Music Album. Additionally, he launched the first High Definition Music Download site in 2007 called iTrax.com. A frequency speaker at audio events, author of numerous articles, Dr. Waldrep is currently writing a book on the production and reproduction of high-end music called, "High-End Audio: A Practical Guide to Production and Playback". The book should be completed in the fall of 2013.

(7) Readers Comments

  1. I don’t have access to the data to back it up right now, but I recall seeing pie charts (perhaps at musicindustryblog) showing that there’s been a huge shift in where money is made in the music business, and I think affects prospects for the likes of Qobuz and studios. In decades past, most of the money in the music biz was made in content creation and distribution of that content, but now I believe live show revenue and merchandise exceed content revenue and/or profits. I don’t know where audio/home entertainment equipment sales and profits have done compared to the previously mentioned market segments – rightly or wrongly, equipment seems to be evaluated as a separate industry.

    Among the possibilities is that content becomes dominated by those strong in the more profitable parts of the money pie, using content as more of a loss leader and customer ownership and engagement weapon to get live show, merch and equipment sales. I think Apple’s been using their iTunes as a loss leader or similar for years to get folks familiar with Apple products and sell them ipods, iphones and imacs. This is among the reasons why I think considering audio and related equipment as part of the larger music industry makes sense.

    In short, I think those focused in the content creation segment will either need or find it advantageous to ally with one of the market pie segments that’s driving most music-related profits now and in the future, and why stand-alone efforts like Qobuz are in peril. Lastly, my gut says they’ll be acquired for all the reasons I just mentioned, provided they (or their creditors) don’t demand too outrageous a price.

  2. When a market becomes too crowded, consolidation often happens. This goes with refinancing, reorganization and even bankruptcy. The good news is that it creates opportunity for those who have made better business choices. Perhaps this is a chance for iTrax!

    • I would love to get iTrax into the mainstream. We were the world’s first and I stuck with my definition of high-resolution. I missed a big upside by not adopting the “everything is high-resolution” approach. We’ll see where things go.

  3. Upsampling as high res?
    Is that like shaping ground beef into a beautiful, thick, Porterhouse?
    They call that meatloaf where I come from.
    So often I am left to wonder when told that “I listened to the high resolution and the normal track, and did not hear a difference!” has to do with the great possibility that the person has not actually heard anything high resolution.
    This worries me, because how can a company like yours come to the fore if the comparisons are often flawed when trying to turn people on to the joy of greater dynamics, spatial imaging, reality?

    • This has been the difficulty since the early days of High-Resolution audio. The entire Meyer/Moran BAS Study missed this very fact and rendered their research utterly useless.

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