MQA Ltd. in financial difficulty

“MQA is going into administration”, this headline has been emblazoned on the websites of several English media for a few hours now, some of them from the hi-fi scene itself, although it was initially launched by business magazines. And this headline does not bode well, since it means nothing other than that MQA Ltd. has had to file for insolvency.

MQA Ltd. is the company that acts as the licensor of the MQA format and has wanted to establish it as the new standard in the field of hi-res audio for years. The format, which was significantly developed by Bob Stewart, was supposed to revolutionise music distribution, because apart from the lower data rate for streaming, it was supposed to give the buyer the certainty of having chosen the “best possible format”, the “original”. Thus, MQA stands for Master Quality Authenticated.

Restructuring at MQA Ltd.

According to the information currently available, it seems to be on the agenda of MQA Ltd. to be taken over by a new investor, as the previous main investor wants to withdraw. The current opportunity for this is considered particularly good, as MQA Ltd. recently presented a new technology, MQair or SCL6, which is once again considered groundbreaking, if not revolutionary. In the course of this presentation of SCL6, the international interest in taking over MQA Ltd. is immensely high, according to the English software company.

In order to be in the best position to pursue market opportunities and to accelerate this process, the company has carried out a restructuring initiative that includes the step of “going into administration”. Since this is actually equivalent to filing for insolvency, a rather drastic step we think….

Highly officially and in the full wording of the company it then reads like this:

“Following the recent positive reception to MQA’s latest technology (SCL6), there has been increased international interest in buying MQA Ltd. At the same time, MQA’s main financial backer is seeking an exit. In order to be in the best position to pursue market opportunities and expedite this process, the company has undergone a restructuring initiative, which includes entering into administration and is comparable to Chapter 11 in the US.

During this process, MQA continues to trade as usual alongside its partners. We won’t be commenting further while negotiations take place”.

Offizielles Statement der MQA Ltd.

Getting to the point

Actually, one should think that MQA Ltd. has cleverly understood to have found the licence to print money with a format that is ultimately no better than the existing one, that nobody needs, and that has nevertheless somehow established itself on the market. The only thing that MQA really brings with it are hefty licence fees to MQA Ltd, which the entire value chain has to pay.

Why the company is now in such turmoil is not really clear from the information currently available, because an orderly takeover of a healthy company does not require it to go bankrupt. So it remains to be seen whether and if so, who will take over MQA Ltd. and its technologies and licences, or whether this is ultimately the end of a format that has been hotly disputed from the very beginning.