Schiit Clarifies Position on a Proposed Audio Format

May 26th, 2016, Valencia, CA. Today, Schiit Audio announced that they would not be supporting MQA, a proprietary audio format claiming “studio quality sound you can stream or download.” Schiit Audio feels that it is important to support its customers—and potential customers—by clarifying the company’s position on MQA, so that they may choose another DAC provider that backs the format, if they feel it is important to them.

“Although there are still many questions to be answered about MQA, we feel we know enough to make a decision,” said Jason Stoddard, Schiit’s Co-Founder.

Stoddard outlined the primary reasons:

1. We believe that supporting MQA means handing over the entire recording industry to an external standards organization. MQA wants:

Licensing fees from the recording studios

Licensing fees from the digital audio product manufacturers

Hardware or software access/insight into the DAC or player

Subscription fees from every listener via Tidal, and/or royalties from purchases of re-releases by the recording industry

2. Our experience with standards-driven industries is sub-par. Consider the surround market. Companies making surround processors now have to support a dizzying array of different standards, none of which is a market differentiator, and the exclusion of any single standard can mean commercial failure. The result is a market in which competition is stifled and consumers are confused.

3. We don’t believe MQA is a differentiator for high-end DACs if it is available on phones. Consider SRS, the Sound Retrieval System, as an instructive example. Before being acquired by DTS, it claimed to be on “over a billion devices.” However, there is little evidence any consumers considered SRS a must-have, differentiating technology.

4. We consider MQA to be yet another “format distraction” that makes high-end audio more confusing and insular. This is a reflection of our position in the market—nearly 1/3 of our revenue is from $99 and under products, and we have one of the youngest customer bases in the industry. It is our experience that when someone starts getting into great audio, they just want a product that will make their current music sound better, rather than one that requires additional investment in streaming subscriptions or new releases.

5. We feel that, even from a market perspective, many questions need to be answered. When will we see MQA on Tidal? At what cost? What percentage of the library will be MQA? How many releases should we expect to see from Warner in the next 12 months? What will be the cost? Again, a historic example may be cautionary. Consider Sony and DSD. DSD is a Sony technology that they promoted, and yet they released very few recordings in DSD.

Mike Moffat concurred, saying, “In addition to the market questions outlined by my partner, there are many performance questions (about MQA) that cause great concern. Actual decoded bit depth for both MQA and non-MQA DACs, claims of ‘lossless,’ the need for MQA to tweak their decode algorithm for a specific DAC (and their ability to perform this optimization on-schedule for a DAC manufacturer who might be, well, a little smaller than HTC,) the impact on the DAC manufacturer’s own proprietary technology and product development, and the impact on the DAC manufacturer’s own competitiveness.”

Moffat further opined that Schiit Audio considers the further development of in support of the primary 16/44.1 PCM format to be of the most value to its customers, citing extremely strong sales of Schiit Audio’s multibit DAC products, and the positive reception to its “DACs for the music you have, not the music you have to buy,” message.

Asked if there was any chance Schiit Audio might support MQA if it became the dominant format in the market, Moffat answered, “If it becomes the dominant audio technology, or even a very popular second-place format, we would have to evaluate it in the same way we evaluate other lossy compression standards, such as home theater surround formats, Bluetooth codecs, and MP3 variants.”

About Schiit Audio

Founded in June 2010 by Jason Stoddard and Mike Moffat, Schiit has grown into a leader in the "personal audio" market, with a wide range of products spanning DACs, headphone amplifiers, and preamplifiers, from $49 to $2299. Schiit is also a leader in the direct sale of audio products.

Jason Stoddard was the former engineering lead at Sumo, designing power amps that included Polaris II, Polaris III, Andromeda III, Ulysses, Ulysses II, The Ten, The Five, as well as preamplifiers including Athena II, Diana, and Artemis, and Sumo’s first digital line: Axiom and Theorem.

Mike Moffat was the founder of Theta, Theta Digital, and Angstrom, and his audio history covers an impressive list of firsts, including the first standalone DAC, the Theta DSPre, the first use of digital signal processing and bit-perfect digital filter algorithms, the first DTS surround processor, and more.