After Jay Z, Beyonce, Rihanna, Nicki Minaj, Alicia Keys, Kanye West, Madonna and a few other big name artists launched music/video service Tidal by signing ownership documents at a press conference on earlier this week, Jay Z is responding to criticism of the new app. Naysayers are claiming that the artists are just trying to get richer by charging as much as $19.99 a month to consumers for the service. Yesterday Mr. Carter, along with Tidal executive Vania Schlogel, participated in a Q&A at the Clive Davis Institute of Recorded Music to discuss all things Tidal. They addressed a lot of the questions consumers had. When discussing the costs of the service, Jay made it clear that people are nitpicking in his view. “Nobody’s ever said, “Oh, the rich getting richer! I won’t buy an iPhone!” Check out a few excerpts from the Q&A below.
How will Tidal change the industry with regards to artists’ bottom line? Spotify has received much criticism for the portion of revenue that the artists receive through their music being streamed there. Is Tidal a direct response to this criticism?
JAY Z: Not a direct response. You don’t want to single anyone out, per se — but currently we pay the highest royalty percentage. And there is no free tier service. If you have five people paying for music, and ten people consuming it, then the artist starts at -5. We start at 1. There is no free tier and we’ll pay the highest royalty percentage. That’s how we’ll change the industry, as well as through a number of other things which I’m sure you guys are gonna ask about, so, I don’t want to go too into it on the first question.
How difficult is it for an indie artist to put their music onto Tidal? Services like Spotify can be very difficult, if not on a label or going through a digital distributor. Does the same apply for Tidal?
SCHLOGEL: There is that difficulty, I know, with other services. I’m not a musician, but some of my friends are and they tell me “I had to go through an aggregator, I had to wait six months for this and that and nobody paid attention to me.” And these are all things that we hear and that are very personal to us, and that we are addressing. The truth of the matter is, we took control of this company a few weeks ago. We’re still a very young, nascent company and we have a lot of initiatives that we’re working on, especially when it comes to indie talent, emerging talent, giving people visibility, giving people a forum to put their music up and giving them control of their distribution and their creative content, how they want to communicate with their fans. Those are all initiatives, and that one specifically is something that we’re working on addressing.
JAY Z: As well as having a discovery program, where established artists can take things that they like and just showcase them. It’s all about paying it forward and working very cyclically and discovering new music. Imagine if Win from Arcade Fire puts up an artist that he discovered in Haiti — and he had this idea, actually, I don’t want to step on his idea — and through the curation process gets something really good and introduces it to the world. And then the world is inspired by that sound. It gets a little ethereal from there, but just the possibilities of what Tidal can do are really exciting, on a creative front.
How is Tidal’s payout structure for artists different from competitors such as Spotify?
JAY Z: I know everyone thinks “new company, main business competitor is Spotify” but we’re really not here to compete with anyone, we’re actually here to improve the landscape. If just the presence of Tidal causes other companies to have better pay structure, or to pay more attention to it moving forward, then we’ve been successful in one way. So we don’t really view them as competitors. As the tide rises, all the boats rise.
SCHLOGEL: The royalty rates will be higher than other services. In addition to that, there won’t be that free tier that’s been depressing the recorded music industry, and frankly been a part of what’s been driving the downfall of the recorded music industry, is that free consumption. Music is not free, fundamentally. Someone came in and produced that beat, someone came in and sang that song, someone wrote that song. Someone came in to clean the studio afterwards. There is an entire ecosystem around this, and we’ve somehow come to believe that it’s okay to pay hundreds for consumer electronics but to pay nothing for the music that helps sell it. It’s around the education process, with that there will higher royalties. And then another point that I want to touch on that’s really important philosophically, not just from a dollars and cents perspective, is the equity ownership. All artists who come in — and this is an open platform, an open invitation — will participate in the equity upside. And that is important, too, because of that participation in the process, by having a board seat, by actually being an owner in this. It’s a different type of involvement.
What exactly were the contents of the document that was signed during the press conference?
JAY Z: Just a declaration that we’re going to work really hard to improve what’s going on in the pay system as we know it. You guys may have seen some of the stats like, Aloe Blacc had a song that was streamed 168 million times and he got paid $4,000. For us, it’s not us standing here saying we’re poor musicians. If you provide a service, you should be compensated for it. And not just artists — just think about the writers and the producers. Like an artist can go do a Pepsi deal or something — I shouldn’t have singled out Pepsi — but they can go get an endorsement deal somewhere and you know, go on tour and sustain themselves, it helps their lifestyle. But what about the writers who do that for a living? The producers? That’s it for them. What about Jahlil Beats, who produced Bobby Shmurda’s “Hot N**ga”? He went on to get a $2 million record deal or whatever, and Jahlil Beats just put the song out. So he wasn’t compensated for that song at all. There are dozens — more than dozens, there are thousands and thousands of those sorts of stories of someone who worked at their craft, worked really hard at the studio, they did their job and people loved it and consumed it and they just went home. I think we’ll lose a lot of great writers in the future because you have to do something else, because you can’t sustain a lifestyle, and I think that’s a shame. That someone has that talent and just isn’t being compensated because someone needed a business to profit off of their work. And we’ve seen that time and time again, we’ve seen it time and time again. Companies that pretend to care about music and really care about other things — whether it be hardware, whether it be advertising — and now they look at music as a loss leader. And we know music isn’t a loss leader, music is an important part of our lives.
As musicians, we’re taught to value the quality of high fidelity music, and we’re most likely willing to spend extra. While we may be in the minority, the general public is more than content with purchasing or streaming mp3 files at little to no cost. What demographic is Tidal targeting with the charge of $20/month for high-fidelity music? How will the option of high-fidelity attract listeners who aren’t in that minority?
SCHLOGEL: First off, there are two tiers. There’s your $9.99 tier and there’s your $19.99 high-fidelity tier. Interestingly, there are a lot of folks who do care about that — I mean, what’s also interesting is the people who, maybe not all music students, but they’ll pay $10,000 to kit out their house with speakers and then put compressed files through those speakers. Which blows my mind, because I’m like “hmm.” There is that audiophile group, who do care very deeply about it and that high-quality tier matters a lot to them. It also matters a lot to the artists, not just Jay but, sitting in the room with the other artists that are behind Tidal… I didn’t even fully appreciate coming into this how important that sound quality was. So many artists were just like “Man, I really want to communicate that song that way,” and it’s important to them to have that option there for people who want to hear it like that.
JAY Z: We believe that if you consume music for free, and that’s what you want to do, that’s your choice. There are good and bad parts of a democratic society — do what you like to do. I’m just talking to people who care about musicians and the music they consume. That’s who we’re speaking to. There was a time when I walked into a mastering session and we’d finally gotten Kanye to get on a plane, because he was at the end of his album, and there were 70 mixes of “Stronger” and “Good Life.” Seventy. So imagine a person goes through 70 mixes just to get something right, the way they believe is right, in their mind, and you just put into a compressed file and you just send it out. Some people really care about, and are really passionate about their music and want it to be heard the way it was intended. It’s not for everybody, and we’re not trying to force it on you but if that’s what you like and that’s what you really care about, then you have the option. And that’s what Tidal is saying.
Will artists who aren’t in the top tier of the music market, who aren’t expected to sell as much, have a higher chance of having virtually no equity?
SCHLOGEL: I’m going to go into Finance 101 for just a second. So, there are two ways to look at this, which is a nominal percentage amount — the size of your slice of pizza, and the slice of the pizza overall. So if you’re gonna have x% of a tiny pizza — I could set up my little company here and own 100% of it, and that number sounds fantastic, but it’s 100% of this little thing that is meaningless. My only point of saying all this is, as we grow along to become a bigger company, realistically, of course, we can’t give out the same percentage to everybody, but by time the size of the pizza is growing and everybody’s sharing in that upside. I didn’t mean to nerd out there, but there’s always some negativity around “Oh but that person got this, this person got that,” it’s not like that. We really just want artists to share in the upside as the pizza grows.
JAY Z: Yes.
What changes do you see coming to streaming in general, and how does Tidal plan to react to those changes in a competitive environment, with everybody fighting for number one?
JAY Z: We’re cool with, you know, they can be McDonald’s, we’ll be Shake Shack. We don’t have to be number one, we just want to be very specific and very great at what we do. We want to do a very specific thing, we want people to come to Tidal for a specific sound, a specific experience, and to know that there are going to be the greatest new artists in the world, the biggest artists, introducing the newest artists, collaborations and things you’ve never seen before. That’s what we’re going to do. After that, the world decides. The universe decides.
Do you think there will ultimately only be one service that everyone uses?
JAY Z: The universe needs balance. There’s light and dark, there’s day and night. There’s young and old. There’s always an alternative in life. So I don’t believe there will be one service.
Tidal is a streaming service created by artists. Is it necessarily for artists? Does this streaming service exclude the major labels in any way?
JAY Z: Well, we can’t exclude the major labels because they have contracts with the artists. But if you don’t have a contract as an independent artist, they you can do whatever you want and we would love to work with you.
Does that mean that artists that are currently on Tidal, when their contracts expire, could have the option of going in lieu of a record company, and work with something like Tidal?
JAY Z: I’m on Tidal. I don’t have a record deal. So… yes.
How does Tidal tend to shift its current perception as a pretentious, self-serving platform for the musical elite, to one referencing the brand essence of being all and for all artists?
JAY Z: I guess by having a conversation, and telling people what it is. That opinion came before we even explained what it was — “This thing is horrible! … What is it?” You know? You never hear Tim Cook’s net worth whenever he tries to sell you something. Steve Jobs, God bless, he had to have been pretty rich — nobody’s ever said, “Oh, the rich getting richer! I won’t buy an iPhone!” Yeah, right. It’s not about being pretentious; again, this is a thing for all artists. You pay $9.99 for Spotify, so why not $9.99 for Tidal. We’re not asking for anything else, we’re just saying that we’ll spread that money to artists more fairly. We’re not saying anything other than that, and we’re saying that we’re in a position to bring light to this issue. We’re using our power that way. And of course there are greater causes, of course. This is not mutually exclusive — there are other problems, real problems going on in the world. We don’t miss the problems; we try to take care of them all. Imagine the President: he has to take care of ISIS, gay rights, equal pay for women, discrimination — all at the same time! So, you can’t say “You started this site when you should be out in St. Louis!” It’s like, okay, J. Cole is out in St. Louis. I wasn’t in St. Louis, but I was in the governor’s office. Because, we can march all day long but if the laws don’t change, then we’ll be marching again and it’ll just be a different slogan on the shirt, and that’s a greater tragedy as well. Everyone has to play their part, everyone has to do different things, and it all has to happen at the same time.
Some artists have equity stakes in the company — is it possible for independent artists to get equity in the company? How is that determined?
SCHLOGEL: Absolutely. We’ve set up a stock appreciation rights program already — it’s nascent, but it’s in place. And as we go along, we’re working with the artist founders and figuring out how exactly to grow and evolve it going forward, and figuring out how we will set up this program and send out that messaging, especially to independent artists.
Tidal is making a strong effort to bring the value of music back into the forefront of the discussion. How far is the company willing to go to convey that message?
JAY Z: Our whole thing is transparency — I think there does need to be transparency. If you went to Bordeaux or something, to look at wine, you’d probably think, “Oh, this is some bougie shit.” But if you went and you saw the craftsmanship, the work that went behind it, and someone’s gotta be picking the grapes, and the whole thing — if you saw the process of what it takes to make an album, maybe you’d have a great appreciation for it as well. So I just think that there needs to be a bit more transparency. I’ve got another great idea that I wish I could share with you all about that sort of thing in particular, and it’ll be coming soon, in the next couple of months, and hopefully it’ll be exactly what you want.
This was REALLY needed to provide some clarity to the entire concept of Tidal. To me it’s rather simple. If you care about your fave getting ripped of then you should support, or at least understand why Tidal was created. If you could care less than you’re probably gonna keep streaming your music for free. Thoughts?
You can read the entire transcript at Fader.