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MQA streaming points to a brighter future for hi-res audio

  • “Well, we live in a trailer
    at the edge of town
    You never see us
    ’cause we don’t come around.” – Neil Young.

    Revolution Blues. Hi-res audio files are presently available for purchase as downloads from the likes of HDTracks, Pono and Qobuz. They serve the audiophile niche but, as argued in an earlier column, it’s a niche that shows no signs of mainstream aspirations. So how about a more positive take on the future of hi-res audio (HRA)? For that we must take the long way ’round.

    Before we dive in, here’s CEO and founder of HighResAudio.com Lothar Kerestedjian responding to last week’s op-ed on 12 reasons why hi-res audio will never go mainstream: “I do understand, that you are not into Downloads. Nevertheless, I don’t think you should as an open minded and competent journalist have a negative position and attitude towards HighRes-Downloads. We don’t sell the “cat in the sack“ nor music for bats! We cater for a certain individual and target group. We also convert a lot of customers, that are reaching out to purchase a better source. Considering that, our average album price is only a few Euros more than an iTunes or Amazon Download – I think we offer great value.”

    In saying “We cater for a certain individual and target group”, does our emailer not tacitly admit that his store’s contents appeals only to a niche market? A niche that can thrive, sure, but doing robust business doesn’t necessarily equate to mainstream take up.

    Consider the market for DSD downloads. Despite loud and ongoing shouting over the past five years about it being the ‘next big thing’ the catalogue remains wafer thin. Its appeal is therefore niche but by all accounts, doing nicely. Like hi-res PCM, DSD downloads cannot hope to match the catalogue width and breadth already available to CD collectors and lossless streamers.

    But Kerestedjian’s aspirations for mainstream market share face a more serious and immediate challenge: according to the RIAA’s 2015 revenue report, in the broader music market, streaming is trending toward being bigger business than downloads by end of year.

    us-digital-revenue

    This RTE post extends on the report’s findings:

    “Streaming music is officially a bigger business than download sales in the US for the first time according to new figures released today by the Recording Industry Association of America.”

    Of course, this isn’t new news.  Apple’s iTunes download store took a 13% hit to revenues in 2014 as Spotify, Deezer, Pandora and YouTube have emerged as the world’s biggest music suppliers.

    The IFPI’s mid-year report embraced the global trend: Joe Public’s attention is turning away from downloads and toward streaming:

    “Subscription services are now at the heart of the music industry’s portfolio of businesses, representing 23 per cent of the digital market and generating US$1.6 billion in trade revenues. The industry sees substantial further growth potential in the subscription sector, with new services advancing in 2015 led by three major global players: YouTube’s Music Key, Jay Z’s TIDAL and Apple’s expected subscription service.”

    Spotify claimed its 20 millionth paying subscriber in June 2015 – double that of twelve months ago – and Jay Z’s Tidal tipped 1 million paying subscribers in September of this year. Rhapsody now has over 3 million. However, it is Pandora that remains king of the hill with almost 80 million active users.

    The mainstream, the 99% who aren’t audiophiles, are many mbillions of people. In this context, any suggestion that a hi-res audio revolution is already underway in the mainstream looks laughably fragile where wishful thinking stands in for evidence.

    Consider this: Per Part-Time Audiophile’s interview with Neil Young last month, the number of Pono Players sold to date is 20,000 – a number that’s entirely consistent with the 18,000 units sold via Pono’s Kickstarter in 2014. A crowdfunding campaign that generated considerable mainstream press attention and which ultimately proved to be the third most successful Kickstarter in the company’s history.

    Young is more than just a celebrity backer of better portable audio hardware. His support for hi-res audio formats is tireless and ongoing and is to be applauded. But should we not also acknowledge that Young’s ‘sell’ is a tough one beyond the audiophile niche?

    Never mind that the 22,000 sales figure looks pitifully small against a backdrop of streamers that number tens of millions. Never mind that even if every Pono Player owner purchased five hi-res album downloads (at an approximate cost of US$100), album sales figures would only just tip 100,000.

    The problem isn’t hi-res per se. (Although its premium pricing doesn’t help). It’s that Pono, HD Tracks and Qobuz are selling downloads into a market that has since moved on. A download’s appeal is destined to become niche if it isn’t already.

    To the man in the street, a download’s image problem is two-fold: 1) pricing is a long way from being competitive with streaming and 2) they aren’t as convenient as streaming.

    We would do well to remember that mainstream music buyers are primarily motivated by convenience and always have been.

    In the late 1980s, the allure of 70+ minutes of music on a small, silver disc that (questionably) promised indestructibility had the CD usurp both vinyl and the cassette tape to become the dominant format of the 1990s.  By extrapolation, one could argue that without the CD, cassettes sales would have eventually over taken those of vinyl. You can’t spin a record in a car, on a portable player or on a boombox.

    KoC

    Similarly, the iPod’s success rode into town on the back of convenience. A thousand songs in your pocket is a far more compelling proposition than could ever be tainted by the (then necessary) lossy compression.

    Streaming services offer cloud access to a better stocked iPod. A minor hit to quality opens up the catalogue to almost any song of one’s choosing, all from one’s computer or handheld device with which we also make telephone calls. What could be more convenient?

    That doesn’t mean that the average streaming consumer doesn’t care about quality. S/he does. It’s just that better quality is often refused when it comes at the expense of convenience. Is it only audiophiles who buck this trend? Probably.

    MP3s sound better played back through a Pono Player than a smartphone. But carrying a second device? That’s inconvenient.

    Even on the smartphone itself, CD rips will sound better than any lossy streaming service. That’s of little interest to our mainstreamer though: ripping a CD and then loading the resulting files onto a smartphone’s internal memory puts the drag in the drag n’ drop.

    Similarly with downloads: why pay US$10 for a download and drag n’ drop when a month’s streaming access to the very same album – and millions of others – comes for the same price?

    I care about sound quality but why would I buy a 16bit FLAC of Slashing Cousin’s Fallen Gods EP from Bleep.com for US$11.99 when I can stream it from Tidal Hifi for not even twice that? Like the method actor seeking direction upon taking on a new role, “What’s my motivation here?”

    One might argue that streaming pricing as it stands is too cheap to be sustainable, that a subscription price hike is the only way for artists to enjoy proper remuneration. That may well be the case (and is beyond the scope of this article) but even if Tidal were to price their Hifi (lossless) service at $100/month, access to a catalogue of 35 million songs still looks like good value next to your average download site where a single album will run the buyer upwards of US$10 a pop.

    Imagine a lossy audio world where Spotify cancels its advertising-subsidised free access layer and charges US$50/month for Premium. Next to US$10 per iTunes store album download, Premium holds its value.

    fallen_gods

    Flipping this thinking on its head, how much do Tidal charge for (offline) downloads? Answer: NOTHING. They only last for the duration of the subscription but ten years of Tidal Hifi costs $2400. Assuming that a download store offered every album one desired, how many could one buy for the same coin? 200? 250?

    It’s not that streaming is too cheap, it’s that downloads are too bloody expensive.

    And if it’s tricky to get around the financial maths for lossy and CD-quality downloads, what hope for hi-res audio’s considerably smaller catalogue that simultaneously demands more dollars and more bandwidth?

    And then there’s the type of music coming to market in hi-res format: re-issues of old classics, jazz and classical, none of which speak with sufficient volume to catch the attention of the mainstream.

    And when new releases pop up on hi-res download sites, they’re often 24bit/48kHz at best.

    Back to Lothar Kerestedjian. Two key points emerged from our email exchange: his download site stocks 9000 native hi-res audio titles and currently sells to a customer base of 97,348 people whose age range runs from 27 to 70 years.

    My suggestion to him that the music he offers is predominantly of limited appeal solicited the following reply: “There is very little content prepared in our quality level for the mainstream market. The music industry still [sic] got to learn and understand, that there is a new channel. It all takes time.”

    In that one statement Kerestedjian nails the problem facing hi-res vendors: the largest chunk of the music market is driven by under 30s, a demographic that hi-res audio hardly talks to.

    Outside of the audiophile niche, hi-res or not, downloads are approaching EOL. Music consumption for >90% of the world is set to come via streaming. If it’s the music industry’s intent for hi-res titles to reach a broader market, they too must get on board with streaming provision. But with hi-res audio, bandwidth and download quotas come into play. A 24bit/96kHz take on Peter Gabriel’s ~40 minute second album II weighs in at 1Gb. Extended delays in playback startup or mid-track buffering just won’t do.

    What about reimagining Kerestedjian’s HighResAudio.com as a hi-res streaming service? 9000 titles streamed direct to home or smartphone for a monthly subscription fee. How much would/should he charge? On this, the sharp end of the issue, replies from our man in Europe dried up.

    Source: http://www.digitalmusicnews.com/2015/12/02/streaming-music-users-dont-care-about-audio-quality-study-finds/
    Source: http://www.digitalmusicnews.com/2015/12/02/streaming-music-users-dont-care-about-audio-quality-study-finds/

    Ask yourself: would you subscribe to a streaming service that offered 9000 titles? If so, how much would you be prepared to pay per month? If we’re to keep in line with the Spotifys and the Apple Musics and then correct for an uptick in quality, US$2/month might be the upper end of reasonable.

    What if Pono, HD Tracks and Qobuz pooled resources for a (generously estimated) catalogue size of 30,000 titles? US$3/month.

    It doesn’t take a professional business strategist to realise that our imagined hi-res streaming service would need to be supplemented by CD quality content, just as several hi-res download stores already do.

    The next logical leap might be to ask: what if the world’s hi-res catalogue could be added to something like Tidal’s lossless ‘Hifi’ service but with minimal subscription fee loading? Say, US$23/month all up?

    The missing piece of our puzzle here is MQA: file compression for hi-res audio developed by the UK’s Meridian Audio. MQA promises several benefits to the listener but the most relevant to streaming is its its ability to fold and pack all the information required by a hi-res file into a container that’s roughly twice the size of an equivalent non-MQA’d 16bit FLAC file.

    MQA encoded, a file’s ultra-sonic frequencies – aka the hi-res portion of the file – are folded under the noise floor so that 24bit/96kHz luggage can travel in a 24bit/48kHz-size suitcase. (Also, Redbook content zipped by MQA is smaller than the same encoded with FLAC.)

    An MQA-equipped DAC like the Meridian Explorer or the forthcoming Mytek Brooklyn is required to unpack the hi-res portion of the MQA-wrapped file, otherwise it is parsed by a non-MQA DAC at CD quality. (Specialist hardware is, ironically here, its own niche).

    The upshot is that MQA-encoded studio masters can be transported from studio to lounge room at the click of Tidal’s play button. MQA doesn’t spell out Master Quality Authenticated for nothing.

    I don’t have the inside tip from Tidal on the likelihood of MQA-powered hi-res streaming coming into being any time soon but over the last 12 months Meridian Audio’s founder Bob Stuart and Tidal’s Strategic Partnerships Manager, Pål Bråtelund have stood as a united front on numerous occasions. Channeling the gossipy tittle-tattle of Hello magazine, where MQA goes, Bråtelund goes too.

    Below we see Bråtelund interviewed by What Hifi at CES 2015. At the four minute mark, the conversation moves to HRA where the Norwegian discusses then ongoing development work with Meridan’s MQA. “It’s likely to happen,” he says of hi-res streaming.

    When I sat down nine months later with Stereophile’s Michael Lavorgna at RMAF 2015 to check out the MQA-loaded Brooklyn, it was Bråtelund who schooled the two of us on the benefits of MQA to a streaming service. As Lavorgna noted in his Audiostream coverage, “Pål demoed streaming an MQA-encoded 24-bit/384kHz file through Tidal over the hotel’s crappy WiFi. It worked.”

    Also at RMAF, Bråtelund and Stuart were the only two guests for Chris Connaker’s streaming audio panel discussion:

    Listen closely at the seven minute mark as Bråtelund outlines another advantage of MQA: a single MQA-encoded file hosted on Tidal servers will unpack as hi-res audio for those with MQA decoders but as Redbook audio for those that don’t.

    For the considerably larger portion of albums that only exist as Redbook masters comes MQA’s secondary benefit: their claim of better sounding 16bit/44.1kHz.

    Then there’s the new Pioneer XDP-100R, the world’s first MQA-compatible DAP. Sort of – MQA support will be added via a future firmware update. Bråtelund’s presence at its UK launch last week led to What Hifi ruminating on the possibility of Tidal offering hi-res streaming some time in 2016. That’s a wide window.

    With CES just ‘round the corner, manufacturers have been teasing promo for what will be launched in Las Vegas. AURALiC asked us to ‘STAY TUNED’ for this:

    MQA_auralic

    AURALiC also have close ties to Tidal. Hmmm.

    The time is ripe for Tidal to add MQA-fuelled hi-res files to their subscription service roster. In the above What Hifi interview, Bråtelund commented that Tidal Hifi “isn’t for everyone” and hi-res is unlikely to change that. Think of it as icing on an existing cake. Or cream in a coffee.

    Instead, the MQA encoding of Tidal streams is more likely to put web stores like HD Tracks, HighResAudio.com and Pono Music on notice: that hi-res audio’s future lies not so much in downloads as in streaming.

    Further information: MQA | Tidal

    Written by John Darko

    John currently lives in Berlin where creates videos and podcasts and pens written pieces for Darko.Audio. He has also contributed to 6moons, TONEAudio, AudioStream and Stereophile.

    Darko.Audio is a member of EISA.

    Follow John on YouTube or Instagram

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