Jay Z Talks Tidal, Jimmy Iovine, Rewriting the Music Business Rulebook
Jay Z doesn’t give many interviews. In conversation, he often pauses mid-sentence, considers, rewinds, slices and reshapes his answer, choosing a more appropriate word or analogy that draws a finer point before revealing it to the interviewer. What’s commonly assumed is a mistrust of the press may just be that unlike his work in the studio or onstage, Jay Z doesn’t ultimately control the final result of an interview, and therefore treads more carefully while giving one.
And yet on the occasion of his recent $56 million purchase of Aspiro, a publicly traded Swedish tech company, and the blockbuster announcement that he is partnering in the venture, in both the spiritual and financial sense of the word, with music’s biggest names -- including giants from the world of hip-hop (Kanye West, Nicki Minaj), R&B (Beyoncé, Rihanna), dance (Madonna, Calvin Harris, Daft Punk), rock (Jack White, Coldplay) and country (Jason Aldean) -- he sat with Billboard a few days before the March 30 announcement in an effort to explain his motives for a purchase that the industry has greeted with a raised eyebrow.
While it would be easy to dismiss the idea that a small company with 500,000 subscribers and a twice-the-price high-definition capability could ever compete on a cursory level with Goliaths like Spotify (60 million subscribers, 15 million of them paid) and the soon-to-relaunch Beats Music, one must consider the possibility that what he’s proposing isn’t a get-rich-quick scheme. According to Jay Z, and judging from the #TIDALforALL social media campaign that launched in March 30’s early morning hours, his primary goal is to change a broken compensation system and to bend the accepted limits of what’s offered for streaming, including song snippets, loose ideas and video. And by offering more money he will, in theory, force other streaming companies to follow suit. Much like his music that has occasionally served as a social agitator, Tidal, which is initially a playground for A-list performers, is Jay Z’s way of resetting music’s value proposition. None of the top-tier artists, who all reportedly own an equal share of the company, need the money, which make them the perfect delivery mechanism for his message: that musicians have had enough of streaming’s microscopic payouts and the labels’ helpless shrugs. Whether the industry itself has had enough remains to be seen.
Billboard: When did it first occur to you to get into the streaming business?
Jay Z: A year-and-a-half ago. We saw the movement and how everything was going and figured that this could possibly be the last music format that we see in this lifetime. We didn’t like the direction music was going and thought maybe we could get in and strike an honest blow and if, you know, the very least we did was make people wake up and try to improve the free vs. paid system, and promote fair trade, then it would be a win for us anyway.
Musicians have long complained that streaming has rendered music virtually worthless. It doesn’t sound like you’re solely driven by financial reasons, but also by a desire to reset the value proposition of music.
That’s correct, absolutely, and when I spoke to every single person involved that’s what I said. Music is … imagine your life without music. It’s a very valuable part of your life, and like I said, that’s why we got in this business. It seems to be going the other way. People are not respecting the music, and [are] devaluing it and devaluing what it really means. People really feel like music is free, but will pay $6 for water. You can drink water free out of the tap, and it’s good water. But they’re OK paying for it. It’s just the mind-set right now.
In some ways music is probably closer to priceless than worthless.
Yes. The experiences that I’ve had growing up with music, you know, I couldn’t trade them for any money in the world. Dancing in the living room to enjoy myself. “Enjoy Yourself,” Michael Jackson. Those moments and just that feeling of joy, it’s priceless, like you said.
Someone of your stature can make this case to the other streaming services. Did you try that before you decided to buy in?
Yeah, we talked to every single service and we explored all the options, including creating a white label with a service. But at the end of the day we figured if we’re going to shape this thing the way we see it then we need to have independence. And that became a better proposition for us -- not an easier one, mind you.
The list of your partners is going to surprise quite a few people. How did you get them involved? Was it as simple as going out and saying, “This is our chance to turn the tide against this thing that’s happening”?
Yeah, pretty much. I talked to everyone one on one about music and about what they would like to see in a service, and how would they like this to go. I wanted to know if they were willing to take a chance, since everyone’s names are attached and their reputations, too.
And I just believe as long as we’re on the side of right, and we’re in this for the right reasons, it will work. It’s just a big opportunity for everyone -- not a thing that belongs to any one person. That’s not fair, that’s not a democratic process, and that isn’t the idea behind it.
Isn’t another of your goals to make sure the revenue makes its way down the food chain to content creators?
Definitely. For someone like me, I can go on tour. But what about the people working on the record, the content creators and not just the artists? If they’re not being compensated properly, then I think we’ll lose some writers and producers and people like that who depend on fair trade. Some would probably have to take another job, and I think we’ll lose some great writers in the process. Is it fair? No. If you put in work, everyone else, you go to work you get paid. That’s fair trade. It’s what our country is built on.
I’m just saying the producers and people who work on music are getting left out -- that’s when it starts getting criminal. It’s like you’re working hard and you’re not receiving. In any other business people would be standing before Congress. They have antitrust laws against this kind of behavior. It almost seems like when it applies to music no one really cares who’s cheated. It’s so disorganized; it’s so disconnected from reality.
What made Aspiro the company to help you make this statement? Was it anything to do with the fact that it’s a smaller, foreign company that you could buy more quietly?
That had a bit to do with it. We had to move pretty quietly because we wanted to do it right without interference. But … the service [also] offers high-quality audio and video. Again, we’re talking about respecting the music and respecting the art … and we can’t play around with that, so we need something that’s authentic and honest. That made it pretty attractive pretty quickly, that the sound quality was so high, and I would know, because I’ve personally heard 70 mixes of a single record, you know what I'm saying? So the least I can do is try to present that to the public the way that the artist intended.
Are you going after the high-end audiophile or just people who care enough about music to pay almost twice as much for the service?
We want it to be open to everyone. So yeah, that would be part of it, but the pricing will be tiered, because we want to present it to as many people as possible. But it definitely appeals to people who really care about the music and want to hear it the way it’s intended. And hopefully some day with technology we figure out how to deliver that high-def sound, maybe even in a $9.99 model. Who knows what the future holds.
Do you think video is going to play a big part in separating you from the other streaming services?
That’s certainly a differentiator, and we’ll have high-quality videos and hopefully we’ll see something that we haven’t seen before.
Have you been talking to phone carriers and audio partners? We’ve heard AT&T and Skullcandy...
We’ve been speaking to a lot of people. To single someone out wouldn’t be fair for them or us.
So, Tidal launches today. Creatively, what do you hope happens, beginning tomorrow?
Artists come here and start making songs 18 minutes long, or whatever. I know this is going to sound crazy, but maybe they start attempting to make a “Like a Rolling Stone,” you know, a song that doesn’t have a recognizable hook, but is still considered one of the greatest songs of all time, the freedom that this platform will allow art to flourish here. And we’re encouraging people to put it in any format they like. It doesn't have to be three minutes and 30 seconds. What if it’s a minute and 17, what if it’s 11; you know, just break format. What if it’s just four minutes of just music and then you start rapping?
It sounds more like you’re envisioning it as a creative collective, or a salon, where artists can try things out and let the audience decide if that’s a direction they should continue in.
That’s a pretty persuasive sort of pitch to make to an artist. Did the first tier immediately get it, or was there some resistance?
I think there was a bit of nervousness because of how things work: This is something new and unknown. But at the core everyone was super-excited at the idea. Like “Yes, let’s do this. Let’s not only create a place that has great music — let’s protect the future generation of artists.” I think this thing changes the world for them. It makes everything different, you know? Between those things it was like, “We have to do this, we are almost charged in this position to do it.”
So, you’re an owner and a musician. Are you hoping that the other services will begin to adopt this attitude, or are you content because if they don’t adopt this you’ll have your own point of differentiation?
I think the goals are the same. Like when the tide rises, all the boats rise. That’s the first thing I said to the group was, “If for nothing else, then we just caused people to look inside their organization and say, ‘Yeah, let’s work on this, let’s work on audio, and let’s work on a pay system.’ ” I already see the conversations, I already see how it’s changing -- and it may have changed anyway because that’s just the natural process when things are wrong -- but I think we sped it up already, and we’re not even out yet. I already see the discussions and the scrambling. And we haven’t even begun.
Each first-tier person has equity in the company?
Is it the same equity across the board?
Yes. We’re super-transparent, and I think that’s part of it. We want to be transparent, we want to give people their data; they can see it. If somebody streams your record in Iowa, you see it. No more shell games. Just transparency.
So the founding members all got the same equity, and now we have a second round and everyone gets the same in that one as well, but it’s not as large as the first tier. We want to keep it going. We want to make this thing successful and then create another round and another round. That’s the dream, that’s the utopia. Everyone is sharing in it; everyone is some kind of owner in it in some kind of way.
What’s been the response from the labels?
I think the labels were a bit suspicious that we were creating a record company. It’s not a record company; if anything, it’s a record store. I have a record company. I don’t want another label. I’m happy with what I’m doing. But some were suspicious. We had talks, like, “Man, you guys also ought to bless this talent. We want you to be involved in this thing as well.” Again, we’re not even against other streaming companies. We want everyone to do well. We just want to carve out our section and let our voice be heard.
So yeah, I think there is a bit of paranoia in the beginning and there may still be, and I think we’ll work through that because it will be a very difficult thing for a label to tell artists when they’re streaming their music everywhere else that they won’t stream it on an artist-owned platform. I don’t see how any label can stand in front of anyone and justify that.
The stature of artists you have aligned with virtually assures that freedom. Are the artists going to provide exclusive tracks or release windows on future work?
Well, it’s up to the artist. You know, there’s a thing now, it’s called the album cycle. You put your single out, promote it, then another single -- I think that now for an artist an album cycle doesn’t have to end. They’re on Instagram and Twitter and all these things, so we’re just talking about ways of extending that album cycle, and it could be anything. What if it’s a video offering tickets to the next concert, or what if it’s audio or video of the recording process? It could be anything. It could be them at home listening to songs that inspire them. Anything they want to offer, you know; just be as creative as possible, that’s the only charge, really. Make it look really good and make everyone that consumes it think, “Man, I got something really great.” Treat the people with respect; make it memorable.
The music industry is obviously cynical. When you came out with your vision, musicians aside, what was the response from the business community?
I think they were receptive but thought that there was no way I could pull it off. You know: “That’s what’s supposed to happen, but no way you’re going to do that.”
Still, today I can’t imagine that [Creative Artists Agency] is not having a meeting with their artists [and saying], “Let’s figure out how to do something together.” But I think it’s so hard to get done. I think it’s so hard because of ego.
I think it just was a moment in time and we felt like, “Yes, this is the thing that if it works we’ll be successful, but if it worked, then the music business will also be successful.” And I think that was so appealing. But the answer was yes, people are like, “That’s what should happen, but you’ll never get it done.”
Is that part of what’s driving you? When was the last time you were the underdog in a fight?
I don’t know; I feel like that all the time. I feel like I’m always pushing envelopes. I feel like I couldn’t get a record deal; I feel like, you know, when Hot 97 [New York] was the big station, I was the first one on Power 105 [New York]. When The Source was the biggest magazine, I was first one on the cover of XXL.
Twelve months from now, what would be your definition of success with Tidal? It doesn’t sound like it’s a financial benchmark.
If everyone says, “Wow, so many things have changed. This has gotten better. I like what's happening.” If Aloe Blacc and his writers, the guys he wrote with, are not seeing a $4,000 check from 168 million streams.
They did their job, they worked, they done it. The people loved it, the people consumed it. Where’d it go? People didn’t pay or stream Aloe Blacc’s music for it to turn into vapor and go into the air. Where is it?
If in 12 months everyone is having that discussion and a dialogue, and everyone is understanding that streaming’s not a bad thing, I’m happy. Let’s embrace what’s coming up next. When the biggest distributor of downloads says they’re going to start a streaming company, I mean, I don’t know what more you need to know that it’s the next format.
You have a long-standing relationship with Jimmy Iovine. Have you been in contact with him since the news has started trickling out?
Yeah, of course. My thing with Jimmy is, “Listen, Jimmy; you’re Jimmy Iovine, and you’re Apple, and truthfully, you're great. You guys are going to do great things with Beats, but … you know, I don’t have to lose in order for you guys to win, and let’s just remember that.” Again, I’m not angry. I actually told him, “Yo, you should be helping me. This is for the artist. These are people that you supported your whole life. You know, this is good.”
Have you heard the rumor that he’s trying to lure people from your first-tier group by offering them more money upfront?
I think that’s just his competitive nature, and I don’t know if he’s looking at the bigger picture: That it’s not about me and it’s not about him; it’s about the future of the music business.
When you were starting your career, if streaming was the pre-eminent revenue vehicle for recorded music, would you have still pursued music?
Maybe. But I think that the people that work behind the scenes maybe wouldn’t have.
Can you say definitively that they are going to make more money from Tidal than Spotify?
It’s not me against Spotify, but for us, you know, just the idea of the way we came into it, with everyone having equity, will open the dialogue — whether it be with the labels, the publishers or whoever,
I think it’s those sorts of conversations that need to be had, and again, not by forcing anyone to do it. We're not forcing anyone to do anything, we're just introducing ideas, and I don't know, maybe someone else comes up with the idea. Maybe someone from the label comes up with the idea, maybe a lawyer; someone finds a bunch of different things that we think will work.
Will artists make more money? Even if it means less profit for our bottom line, absolutely. That’s easy for us. We can do that. Less profit for our bottom line, more money for the artist; fantastic. Let’s do that today.