High-Res Stream Provider MQA Loses Backing, Enters Administration
Written by djfrosty on April 12, 2023
MQA, the audio coding technology company that makes high-resolution streams for companies like Tidal, entered into administration after its founding financial backer stepped down from its board, according to company filings and media reports.
Anton Rupert, grandson of the billionaire South African tobacco tycoon of the same name, was terminated from the position of director of the board of MQA Limited on March 17, according to a filing. Rupert represented Reinet Investments S.C.A., MQA’s founding funder.
The London-based company specializes in making large music files small enough to be compatible on any service or playback device without losing any quality, it says. While it grew its brand presence through partnerships with major music compies like Xiami Music in China, Tidal and the independent music trade group Merlin, it has struggled to make a profit.
The company flagged its uncertain financial future in its most recent annual report, which was for the year ending Dec. 31, 2021. In a statement in the report, MQA chief executive Mike Jbara described the company as a “loss-making start-up” and said it is aware it faces competition for its employees from other U.K.-based technology companies offering certain financial incentives. The company also stated it had secured funding committments to maintain operations only through the first quarter 2023.
MQA’s business was built on driving demand for their tech by providing tools to content creators who would add to the catalog of music made using MQA’s technology. Those MQA files would make their way to consumers ears via distributors and broadcasters that have agreements with MQA.
For listeners, the proof would be in the quality of the stream. The company said it had 132 consumer product agreements as of Dec. 2021.
Last week, technology news website What HiFi? wrote MQA was going into administration, citing a statement from the company. What will happen to the services MQA provides to its partner companies is unclear, but going into adminstration does not always disrupt a companies’ core operations, at least not at first.
Similar to declaring bankruptcy in the U.S., entering into administration in the U.K. protects insolvent company from creditors. This breathing space gives the company time to pull itself out of its financial problems or the court-appointed administrator will advise taking steps — such as selling off assets — to help pay off the company’s debts.
MQA did not respond to a request for comment.
In their last annual report, the company said it is “confident that we will obtain additional funding commitments during those discussions in (the first quarter) 2023.”