For All of Tidal's Talk of Transparency, We Still Have No Idea How They're Helping Artists

Will Jay Z's new streaming service benefits trickle down to the smaller artists?

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In a perfect world, musicians would be paid for their music. Not always a lot, but something that fairly reflected their value to their listeners. In 2015, this is still not the case. So, on Monday, Jay Z and his personal Justice League took a stand to right these wrongs by launching Tidal, a music streaming service that is eerily similar to its competitors (Spotify, Rdio) on the surface, but hopes to make a drastic change to the music industry's behind-the-scenes dynamics.

A "drastic change" isn't the lossless format that Tidal itself has been marketing, though. In fact, Tidal and its potential users are better off thinking about the app in terms of the $9.99 package. The “Standard Quality” option is basically identical to Spotify—the biggest difference, as far as anyone is able to tell at this point, is that Tidal will provide better compensation to the artists supplying the music. Plus, you’ll receive “exclusive experiences” and other artist-to-listener content that will secure your interest. You get music videos and footage of live performances. You get Daft Punk’s Electroma. You get app-exclusive stories and interviews. You get artist-curated playlists like, “Coldplay: Songs That Formed the Band.” It seems like a good deal. In comparison to Spotify’s Premium option, it is a good deal. At $9.99, there’s nothing that you’re going to be able to get from Spotify that you can’t get from Tidal. 

Unfortunately, in order to justify its own premium option—the $19.99 version that you've probably heard more about—Tidal is set on emphasizing audio quality, a ​feature that, on this scale, won't do much to swing users away from Spotify. As Jason Duaine Hahn noted on Tuesday, when you’re using basic headphones, audio fidelity isn’t going to make to make a dime of difference—and certainly not $10 worth.

The fidelity angle isn’t particularly new, either. Better sound quality is something that Jack White has been harping on since Neil Young debuted Pono, a standalone music player and streaming service that launched sometime around who cares because you’ve already forgotten about it.

But Tidal has already chosen their hill to die on. Between the $9.99 and $19.99 subscriptions, lossless quality files are the only difference, and because the $19.99 price is the most apparent difference between Tidal and Spotify, that’s where all of the attention for Tidal is going. Based on how consumers and the media are talking about Tidal, one would think that the $9.99 option doesn’t even exist.

For this confusion, Tidal can only blame itself. Maybe the owners really believe that lossless files will change the way we listen to music. Or maybe they just wanted more money. Or maybe they thought that, from a marketing perspective, the audio quality angle was their firmest leg to stand on. After all, based on the exclusive content currently offered, Tidal would still be a hard sell. Electroma came out in 2007. Music videos are available for free on YouTube. And no one should care about Coldplay’s formative influences because Coldplay sucks. One would think that, in an ideal situation, Tidal’s release would’ve been packaged with an exclusive album like Kanye’s So Help Me God, not Taylor Swift’s incomplete discography (1989 is conspicuously absent) or a single like Rihanna's "BBHMM." 

Why the rollout for Tidal was so aborted and underwhelming is still unclear. At Stereogum, Michael Nelson posited that Jay Z was likely focused on getting the jump on the soon-to-be-rebooted Beats Music. But the resulting rush sacrificed basic launch features like a desktop app and social functionality. Worst of all, we only have a faint understanding of how Tidal's artists are going to "write [their] own stories." 


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This is mainly because Tidal's introductory press conference was as vague as it was self-obsessed. A small audience cheered on the artists in attendance with the enthusiasm of a bleacher full of soccer moms. Every artist rounded the stage to sign a piece of paper that probably held as much legal power as a giant cocktail napkin. Alicia Keys presumably Googled “quotes about music,” hopped on Goodreads, and then grabbed literally the first available option.​


It was as if the musicians had come together to form their own version of the Players' Tribune. And much like Derek Jeter's #content hub (which is dominated by athletes who are represented by the same agency as Jeter) Tidal has the look of a minor oligarchy, where streaming is now dominated by the titans and demi-gods of the music industry. Tidal’s star-studded display wasn’t comforting; if anything, it was a little terrifying to see how the artists themselves could drill the landscape of the music economy into so few faces. Their presence isn't simply a matter of marketing, either. As Jay Z pointed out during an interview with Billboard, Tidal's initial group of owners are the ones who will stand to make the most money ad infinitum

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. 

But for all the talk of "transparency," it still feels like we're left with more questions than we started. It didn't help that, when pressed to discuss Tidal's role in relation to record labels or Spotify, Jay Z was even more evasive: 

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.


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 dialog—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.

The feel-good sentiment and the reluctance to name names are supposed to be obscured by the fact that Tidal is offering you a better listening experience. In this sense, the lossless feature isn't an upgrade so much as it is a proxy for the more difficult conversation that Tidal doesn't want to have. They don't want to get into it with anyone about fairness and competition. They'd rather woo you with technical details. It's telling that at no point throughout Alicia Keys’ speech did we hear the words “Spotify” or “record labels." Maybe the artists are hoping that they’ll be able to skate by on implication: You know why we’re doing this. Do we really have to spell it out for you? 

They do. Here's the most interesting thing about Tidal: It’s a response to the collusion engineered between Spotify and its partners i.e. the major record labels that signed away the streaming rights to musicians and then took most of the money for themselves. Back in the November, the New Yorker’s “Out Loud” podcast featured a conversation between staff writers Kelefa Sanneh and John Seabrook, as well as the website’s editor, Nick Thompson. During the talk, Sanneh discussed this relationship between Spotify, the record companies, and the artists, which Seabrook had initially described in an article that he had just published for the magazine.

"When I started reading John’s piece, which is great, I was expecting to come away kind of agnostic, like, ‘This is a business dispute. Different parties have different ideas about what things are worth, they’ve gotta figure it out,'” said Sanneh. "But the more I read, the more it started feeling like a little bit of scam, and the people running the scam seemed less like Spotify than like the record labels. I mean, Spotify basically pays the record labels in three different ways: There's lump sum payments, there's royalty payments, and there's equity in the company. And, so far as I can tell, the record companies only share one of these three payments, the royalties, with the artists. And so, the record companies have kinda been bribed by Spotify, and in return are trying to sell their own artists on relatively low royalty rates."

"I think you got that pretty much right," said Seabrook.

"I mean, it's kind of like a conflict of interest," said Sanneh. "And If I was an artist, I'd be mad not at Spotify; I'd be angry at this record company that is sort of supposed to be representing my interests in some sense, and has kind of been bribed by Spotify." 

Aside from the "Out Loud" podcast, I’ve heard whispers of these shady financial dealings in the past; my eyes have glazed over headlines like “Study Finds Record Labels Take Most of the Streaming Money From Artists” and “Spotify Explains Royalty Payments.” Normally, my brain’s response is something along the lines of, “Oh, sorry, what’d you say? I couldn’t hear you over the obscene amount of free music that I’m listening to right now.” But on a stage that everyone was watching, Tidal and its owners had the opportunity to take a coherent stand against Spotify and the record labels, one that everyone could see and hear, one that they could draw momentum from.

It didn't happen, and maybe it couldn't have. After all, these artists are still making money from Spotify. And, in certain cases, their record labels are the ones providing Tidal with the rights to their own music. You can't bite the hand that feeds you. 

But as it stands, Tidal is already in trouble. The focus is squarely on their $20/month fee, their ownership group appears too small, and why, exactly, they're here is unspoken and unclear. Soon enough, Tidal will find itself in a battle against more than just poor subscription sales. Unless the artists are willing to pull back the curtain on the imbalances of the music industry, then they're the ones who will come out of this looking greedy. 

Gus Turner is the managing editor of Complex Sports. Follow him @gusturner1.

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