On Wednesday, Jay and Tidal executive Vania Schlogel met with students at New York University’s Clive Davis Institute of Recorded Music to talk about the newly launched music streaming service Tidal. The brand is being billed as an artist owned high-fidelity music platform which provides lossless audio quality. NYU professor Errol Kolosine moderated the discussion.
On whether Tidal was a direct response to criticism artists receive small portions of profits from streaming on Spotify:
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.
On the difference between Tidal’s payout structure and its competitors:
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…
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.
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.
On the difficulty level of independent artists’ ability to add music to Tidal:
Schlogel: 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.
On whether exclusive content will be available for purchase anywhere:
Jay Z: I don’t know. It’s available for streaming immediately. I don’t know where streaming will go in the future. The analytics that we’re seeing tell us that streaming is the next thing, and downloads are going down. I feel like with the history of this platform, from vinyl to where we are now, it just seems like the next logical step. Before you had a CD, you put it in, you had the download, they eliminated the CD so just downloads. Now you’re going to eliminate the download and you just play it. So it just seems like the next logical step in what’s going to happen.
On artists’ payout from streaming:
Jay Z: 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…
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.
On the $20/month cost for Tidal HiFi:
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…
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.
On streaming’s competitive market:
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.
On major label involvement:
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…
I’m on Tidal. I don’t have a record deal. So… yes.
On the perception Tidal is a self-serving platform for the musical elite:
Jay Z: 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…
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.