Canada’s The Lenbrook Group announced today that it has spun off its digital media and content-related businesses as a separate unit, independent of its hardware brands. The new unit will be known as The Lenbrook Media Group and is to be headed by former MQA Ltd. CEO Mike Jbara.
See more on Lenbrook spinning off its media businesses
As most readers of Strata-gee likely know, Lenbrook Group is the parent company of some very well-respected audiophile brands, such as NAD Electronics, PSB speakers, Bluesound, and the BluOS hi-resolution multiroom digital distribution system. Recently, I reported that the company had acquired the assets of MQA Ltd, adding to its content distribution business.
Now the company says it will spin out the content side of its business from its hardware brands. The move to separate The Lenbrook Media Group from its other businesses will allow it to more effectively pursue the commercialization and development of its content management solutions as well as to pursue new opportunities resident in this non-hardware realm.
A Glimpse of How The Company will Integrate MQA & SCL6 into Its Portfolio
The announcement from the company also gives a glimpse of how it intends to include MQA and SCL6 technology in the greater Lenbrook ecosystem. “With BluOS content management platform at its core, this group will also oversee the growth of content encoding solutions MQA and SCL6 which Lenbrook acquired in the autumn of 2023.”
The acquisition of MQA’s assets complemented our existing BluOS platform and supports creators in the recording studio with capturing and delivering directly and in the highest quality, their art into the homes of music lovers. Creating the Lenbrook Media Group allows us to fully capitalize on this unique position by giving it focus, and putting the right strategies, structure, and resources in place,”
Gord Simmonds, President and CEO of The Lenbrook Group of Companies
Former MQA CEO Mike Jbarra to Head Lenbrook Media Group
As part of this new organization, the company also announced that former MQA CEO Mike Jbara was appointed as Vice-President and General Manager of this new Lenbrook Media Group division.
Once you combine Lenbrook’s vision for advancing choice and innovation in the performance audio industry with the assembly of some of the best minds in audio hardware and software engineering, it results in substantive opportunity to empower creators, distributors, fans, and broadcasters in addition to hardware manufacturers. It is an exciting list of possibilities that we believe will benefit both the music and the specialty audio industries
Mike Jbara, Vice-President and General Manager of Lenbrook Media Group
Not an Illogical Decision
This is not an illogical decision by Lenbrook. The fact is, the fundamentals between the drivers of its hardware side are completely different than the drivers of its content side. With the addition of MQA and SCL6 to its existing BluOS business, this likely tipped the scale making it more logical to split off the media side and create two divisions, each intently focused on the operations and opportunities of these separate businesses.
On top of that, now that Lenbrook is in charge of MQA, Ltd., which still has a licensing business, it very likely created a bit of consternation among other MQA licensees, many of whom are competitors to Lenbrook brands. By creating a separate company and separate management, any potential conflict of interest is minimized.
MQA with BluOS – An End-to-End Digital Content Creation and Delivery Solution
By acquiring MQA, Lenbrook believes that by combining it with its existing BluOS digital multiroom delivery system, it now possesses a superior end-to-end digital content creation and delivery solution that gives it a substantial competitive edge. In specialty audio, a compelling differentiation is the name of the game.
Lenbrook Media Group executives Mike Jbarra and Andy Dowell (Head of Licensing) will be attending CES 2024 in Las Vegas from January 9-12, 2024. They are available to meet with attendees (appointment recommended) to discuss licensing, integration, and other opportunities.
To learn more about Lenbrook, visit lenbrook.com.
Lynbrook is reorganizing their business activities to reflect that they have separate hardware divisions and a software division based on BluOS, MQA and Scl6. This makes sense to categorize these activities separately. I doubt the hardware teams wanted the development and operating costs of BluOS in their financial reporting. Adding MQA Ltd staff they brought over brought over as part of the deal to acquire MQA and SL6 assets would not fit well into their hardware divisions.
The number of people who can decode an MQA file was probably never over 300,000 and is now less because Roon no longer automatically decodes MQA files and Tidal is switching to FLAC.
Tidal has laid off 40 people and according to a Resident Advisor source the company is making a clear shift from “being music-centric to product-centric–pushing tech initiatives instead of anything related to music, labels, distributors or artists.” How good this source is unknown, but this would make sense considering Tidal has had virtually no growth since 2020. Tidal will need to show $54 million of revenue in the fourth quarter of 2023 or they will show a loss of revenue from the prior year.
What doesn’t make sense to me is for Lynbrook to create a streaming service with MQA. High-resolution streaming has not shown that it can attract enough customers to make it worthwhile with Tidal’s numbers, Qobuz’s small numbers and no one talking about how successful high-resolution streaming was at either Apple or Amazon. You must consider that the market may be saturated and there is no room for more growth.
What looked like a relatively risk free acquisition of MQA and SCL 6 now looks a lot riskier.