Qobuz Enters the Equivalent of Chapter 11 Protection

As reported in LesEchos.fr, France-based Qobuz has entered procédure de sauvegarde which is roughly the equivalent of Chapter 11 protection. Qobuz President Yves Riesel explains that they were unsuccessful in raising a third round of financing which led to the filing. That said, my very limited understanding of procédure de sauvegarde suggests that a company must still be solvent, i.e. not in default, and they have 4 months in which to raise the funds needed to continue operating.

I'd like to thank reader Chris L. for the heads up on this unsettling news. As you probably know, I'm a big fan of the Qobuz lossless streaming service and it would be a real shame if they were unable to raise the funds necessary to continue operations. I will stay on top of this story and report any news as it comes in.

Here's a statement from Qobuz (in French).

COMMENTS
bobflood's picture

manufacturers need to form a vehicle of some type to invest in Qobuz so they have a market for the new products they are coming out with. They are not going to have much of a market for all the great new streaming products if all there is out there is MP3. Many of these products have been developed in anticipation of the widespread availability of Qobuz, WiMP and others like Orastream Classical HD and new entrants.

Maury's picture

In the article it was noted that Qobuz needed a mere 9 million Euros or about $14 million. They couldn't raise it. Here in the US PONO struggles to raise even less for downloads.

What we need to know is what is happening behind the curtain: are the major music labels putting a stranglehold on these ventures while publicly saying nothing? There was another bad report on digital album sales. The culprit as admitted by the labels is digital streaming. Are they trying to stifle it all? Or are they planning to come up with their own venture to freeze everyone else out of streaming? I really have trouble seeing a big market for unbundled streaming. I think bundled streaming is what will happen. It is also possible that the few remaining labels will go along the path of the previous thread and have their label specific streaming service.

remlab's picture

..and literally the next day I read this. Damn. Looks like I'm just gonna have to keep upsampling my streaming. Better than nothing, I guess.

ashutoshp's picture

My life as I know it will come to a halt... I'm keeping my fingers crossed. Gutting... Cheers for the update.

PDQ.Bach's picture

Qobuz co-founder Yves Riesel stated quite clearly in a recent interview that his problem is not caused by licensing difficulties with the major labels.

He blames free streaming à la Spotify and particularly Deezer, the quasi-monopolistic free streaming service marketed by mobile telephony provider Orange. Riesel has at least the merit of consistency in this: he warned almost a year ago in Les Echos that nobody yet in France was making any money out of streaming, and that “free” streaming subsidised by mobile phone companies would distort competition and ruin the quality streaming market.

I’m not yet convinced that the current streaming model is viable. Perhaps it’s not meant to be. Perhaps the name of the current game is the eradication of all serious competition, in the fashion of Amazon. Perhaps a quality niche player like Qobuz should stick to the HiRes download niche in order to survive. But imagine, just for a moment (and lay aside all licensing considerations), what the musical world would sound like if Apple had invested in Qobuz rather than Beats.

Maury's picture

Maybe Qobuz etc should issue vinyl instead? You can't stream that. The Amazon or Apple analogy seems relevant here, yes.

ashutoshp's picture

does this mean that the issue is more to do with being in France and the solution would be to move to another country, USA for example? Pardon my naivety as I'm not a business person.
I was got a bit worried by the marketing statement. In this madness we call home, I would have thought it to be critical.

baocrazy's picture

I was very sad to read this news and I hope they will make it through this difficult time.

It also make myself ask this question: what will happen to the music I bought since a few years using their platform. Indeed it is copied on a NAS but should something wrong happen to it, I would lost all the music.

I guess this is a question that is relevant for any kind of cloud based service but I never thought about it before today.

PDQ.Bach's picture

What will happen to the music you’ve bought and downloaded on Qobuz if worse comes to worst and Qobuz ends up a Blue Norwegian Parrot?

Nothing. The downloads are yours, happily free of DRM. As long as you maintain redundant backups of your downloads, periodically refreshed on different physical supports, you’re reasonably safe. At least not worse off than with an equivalent collection of CD. CDs can degrade to the point of unreadability. I had to safeguard many old CDs to hard disks: the failure rate among commercial optical media of a certain age should not be underestimated.

With hard disks at least, redundant backup is cheap, easy and fast.

Indeed, the mantra of digital media users should be “Thou shalt back up early and often. Thou shalt ever convert your data to the most current format to ensure their perennity.

ronalde's picture

There are more problems with DRM-free digital downloads than keeping track of your purchased 'goods'.

Because by definition they contain no proof of ownership what so ever, downloaded files can't be insured (as far as I know) and can't be sold on a second hand market, like CD's and LP's can.

Add to that the ongoing format war, I find it increasingly difficult to buy digital downloads (I currently have three different digital DRM-free versions of Kind of Blue, of which I only listen to the last one I bought).

I suppose the market (consumers and publishers/retailers) would have to come up with some solution for these ownership issues, especially when the catalogues keep expanding and the quality keeps increasing like they did the last few years.

Maybe somekind of "certificate of authenticity" like software companies used to supply alongside the (installation) files and media themselves?

Regards,
Ronald

bobflood's picture

shakeout begins. Wonder which one is next. MOG is gone and now Qobuz is in trouble. Spotify has never made a profit either. We need a well capitalized service that charges enough to be profitable or else the whole streaming model as it is currently envisioned falls apart. Music is not free but that is the message a whole generation has grown up with. We are now in the phase of internet development where services must be monetized and it is not just music. We are in for a rough ride for a while I fear.

Maury's picture

"Music is not free but that is the message a whole generation has grown up with."

To be fair it is not quite as broad as that. That whole generation thinks MP3 files of music should basically be free or have a minimal cost. I don't see them demanding free concerts, free band paraphernalia, free vinyl or even free lossless. Come to think of it they may have a point, not that anything should be stolen. Again I think this is going to separate into bundled "free" services with a premium service that comes not only with CD rate (or possibly higher rez streams) but all kinds of special deals and access. The only question is how lucrative the premium services can be.

PDQ.Bach's picture

« We are now in the phase of internet development where services must be monetized and it is not just music »

True. But the real question is, which services are monetised directly, and which are monetised surreptitiously.

The contention of Yves Reisel, co-founder of Qobuz, seems to be that “free” is not free, it’s just subsidised out of your own pocket via the revolving backdoor. You pay for the mobile phone, the fee includes streaming, whether you use it or not. And even if it costs your provider more than you pay for it, proportionally and unawares, the cost is billed as “acquisition of clients” i.e. marketing. If you’re as big as Amazon (or, in the case of Qobuz, Orange) this shpiel can go on and on, quarterly loss after quarterly loss.

I find Reisel’s contention that surreptitious monetisation eventually kills off specialised quality services rather plausible. Whether it is also the main cause of woes for Qobuz, I cannot tell.

remlab's picture

If you raise a streaming player's volume control all the way and control the volume from the dac, will it increase resolution? Can it overload the dac?

jim tavegia's picture

It really is no different when you want to cater to the 1%ers who make up those of us who want higher quality music. High end audio stores come and go as the market is small and the cost of doing business is great. Once Apple ruined the listening habits for millions it was a done deal. Who really knows if Pono is going to make it. Kids are happy with what ever is in their phone. I never see a students at my high school with any type of music player other than their phone.

I stopped listening to Spotify as the sound quality was just not there and it was to easy to play a cd or lp.

Sound_Doc's picture

So SAD. Too small of a market with too high of start up cost. I wonder if they would have been more viable had they begun with a version that operated in North America as well as France. Or, would Apple, Google, or Microsoft purchased them just to put them down or absorb portions of them as they have done with other bleeding-edge technologies?

segnornilsson's picture

Please, I love Qobuz! can't live without it!

alphorn's picture

I've just have heard the rumor that Sony will equip their streamer (HAP Z1 ES and others) with Qobuz access.

So let us all hope!!

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