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How well is MoFi managing its digital mastering LP controversy?

After the audiophile vinyl community was upended with the news that Mobile Fidelity (MoFi) concealed it had been releasing records that used digital source materials, it became a case study of public relations vs. crisis communication.

By Larry Jaffee

The audiophile vinyl community was upended during the summer of 2022 with the reported revelations that Mobile Fidelity concealed it had been releasing records that used digital source materials, despite leaving the impression with purchasers they were buying an all-analog premium product, typically priced at $125, made from the original tape.

Well, not exactly, Music Direct president Jim Davis was forced to admit on July 29 on the MoFi website (https://mofi.com) after several months of speculation that all was not what it seemed. The catalyst for the disclosure: several weeks of thousands of MoFi customers’ ire expressed via social media that the company has been lying to them for more than a decade. Two class-action lawsuits about the matter against Music Direct were filed in August.

MoFi’s May announcement that it will be producing on vinyl 40,000 units of Michael Jackson's Thriller, commemorating its 40th anniversary, foreshadowed something was awry. Red flag detection by leading audiophiles pointed out that the company could not use repeatedly Thriller’s master tape to produce the requisite lacquers at such a high quantity, and speculated they must have been using a digital copy in its mastering process.

Then on July 14, Mike Esposito, who owns the Phoenix, Arizona record store The In Groove, shared his suspicions about the digital sourcing on his YouTube channel (see below), popular among audiophiles, who quickly in the chat flamed MoFi that, if it turns out to be true, the label lost them forever as a customer. 

Less than a week later, Esposito was invited to tour MoFi’s Sebastapol, Calif. studios by a company marketing executive, and the store owner paid for his own plane fare.

A few days later, Esposito went back on YouTube with a new video (see below), that showed his interview with three MoFi mastering engineers, who admitted the digital sourcing. 

An avalanche of new comments echoed that they will never buy anything from the company again. Esposito was also criticized for not asking harder questions. Dozens of other audiophile YouTube channels commented on the “MoFi debacle,” which is partly wrapped in ego. Experts with golden ears, who claimed to always be able to hear the difference between a digital source and original tape were proven wrong.

Pouring gasoline on the uproar, a long Washington Post article (https://www.washingtonpost.com/music/2022/08/05/mofi-records-analog-digital-scandal/) that went viral published online Aug. 4, amplifying the scandal to a national audience.

The timing of the consumer backlash couldn’t have been worse for MoFi, which in late June announced that it was building its own state-of-the-art vinyl manufacturing plant, Fidelity Record Pressing, in Oxnard, Calif., which would open in 2023. MoFi recruited to build the plant a veteran and his son from Record Technology Inc., of Camarillo, Calif., which has been pressing its audiophile records since the label’s inception.

  

What Not Do in a Crisis

Music Direct, a privately held Chicago-based e-commerce firm that sells high-end audio equipment, bought MoFi out of bankruptcy in 2001 and kept its mastering operation in Sebastopol. MoFi launched in 1977 when they pretty much had the market to themselves. A distribution problem towards the end of the 1990s — during which it marketed successfully a well-regarded “24K Gold CD” — caused the company to file for bankruptcy. Music Direct did a masterful job regaining the premium label’s claim to be “The Undisputed Leader In Audiophile Recordings Since 1977.” Obviously, even before this summer’s fiasco, experts might dispute such a boast.

Capitalist Warren Buffet once quipped it takes 20 years to build a reputation and five minutes to ruin it, and MoFi is a textbook case of what not to do in crisis management, a subject I have taught on the graduate school level for seven years.

Full disclosure: In mid-August, I offered my crisis communications services to MoFi, and after more than a week of email exchanges with both Davis and his lawyer, I never received a promised non-disclosure agreement, which I told them that a NDA would receive my signature only if we could come to terms. It never reached that stage.

While, I don’t consider myself an audiophile, I have written for two audiophile print publications — and now Michael Fremer’s trackingangle.com). I certainly have friends who fit the audiophile category in terms of hardware and records. My collection includes only two MoFi vinyl records, Al Stewart’s Year of the Cat from 1978 (which I bought used for about $10 a decade ago), and Richard Thompson’s Rumour and Sigh (for which I paid about $60 from Newbury Comics; the latter purchase would qualify me as a member of the lawsuits’ “classes”).

  

‘Original Master Recording,’ Really?

At the core of the two lawsuits filed in Seattle and Chicago against MoFi is semantics. What is meant exactly by MoFi’s trademark, “ORIGINAL MASTER RECORDING”? Well, that’s for a judge or jury to determine.

In crisis management, the key is to prevent one from happening in the first place. In this instance, MoFi failed miserably. Upper management not only didn’t have a crisis plan; it knew that its marketing materials left out a key step that its lacquers were being cut from a Direct Digital Stream (DSD) source, a practice that began at least 11 years ago. In fact, 60 percent of MoFi’s vinyl releases since 2011 used DSD-based masters.

Hence, the label did not go back to the original analog tape, which degrades every time it’s played, especially if it’s a vintage recording. This is why the major labels are especially protective who gets to reissue its titles on vinyl.

Yet until late July, the schematics and descriptions offered on the MoFi website and physical packaging explaining the production process made no mention of DSD. On July 29, Davis finally addressed the brouhaha on its website, apologizing for using “vague language, allowing false narratives to propagate.” It was titled “Statement from Mobile Fidelity Regarding Our Mastering Process.”

A PR firm obviously crafted the statement, which did get some things right, such as MoFi acknowledging customer complaints and “taking for granted goodwill and trust our customers place in the brand.” Davis also promised going forward “100% transparency regarding the provenance of our audio products,” and began updating its website’s product information to accurately reflect source materials, as will be the case in future packaging and printed materials.

MoFi didn’t even attempt to engage directly with the online wrath it received, and or go on YouTube to explain itself. Public relations is far different from Crisis Communications. PR is generated as a positive, proactive activity, where as as Crisis acts from a disadvantage in a negative, reactive environment.

Why no one in the MoFi organization didn’t realize the truth would come out after the Michael Jackson announcement for 40,000 LPs is a mystery.

Audiophile purists know that done properly a pure “all-analog” vinyl record requires a new stamper every 1,000 units, meaning the real original tape — not a production copy — would need to be run 40 times. Since the vinyl comeback, New York-based Sony Music, which controls the copyright to Thriller, generally only licensed its titles to Sterling Sound, which moved its headquarters several years ago from Manhattan to Nashville. It wouldn’t chance transporting irreplaceable tapes, such as the Thriller, across the country, for such a project, but it must have gave its blessing to the DSD transfers. Sony developed the DSD technology for Super Audio CD, which MoFi still releases.

Once in a crisis, an organization must take care of its stakeholders. In MoFi’s case, not only the customers, but also the retailers that sell their records and accessories, the labels from whom they license the titles for reissue, the specialized press that it’s also deceived, and the artists who sell the music (if they’re still alive).

Since the digital revelation, MoFi has embarked on a damage control strategy no doubt concocted by its legal team that believes the less said the better. An exception was an interview simultaneously published on the MoFi and The Absolute Sound websites, in which Davis controlled the narrative, explaining what, when and how the company has been producing and mastering its records, but not why it did what it did. That’s what its irate customers still want to know.

Joseph J. Madonia, the Chicago-based lawyer for Music Direct / Mobile Fidelity Sound Labs, said they "cannot comment on pending litigation at this time."

  

Larry Jaffee is the author of Record Store Day: The Most Improbable Comeback of the 21st Century.