Jay-Z's Magna Carta Holy Grail was supposed to be huge, the self-proclaimed Best Rapper Alive's entrée into the internet age. "We need to write the new rules," he said in the omnipresent pre-roll ad. Instead of counting on a big launch to drive record sales, the album was given away for free to anyone with a Samsung Galaxy S III, S4, or Note II. In exchange, Samsung gave Jay-Z a flat $5 million. Even when the app broke, leaving a million fans stranded at midnight, Hov was unphased. "It was disheartening to me," Carter said in a radio interview, but "any time that you try to do something different, there's going to be problems."
"A data collection exercise disguised as a smartphone app"
But was there more to the Jay Z Magna Carta app than the rapper let on? Just a week after release, many observers have already complained about the app itself, which asked for broad info-sharing permissions despite delivering the album as a simple folder of MP3 files. It was enough to prompt The Washington Post to call it "a data collection exercise disguised as a smartphone app." Willy Staley, a writer for The New York Times Magazine, went a step further, positing a three-way trade: "Jay-Z gets paid directly for his music ... You, the listener, get free (or almost-free music), which is what you're used to," and Samsung "gets some of that raw uncut data, which is all anybody wants anymore." Put it that way, and Magna Carta's groundbreaking ambitions start to feel sinister, a new way for large companies like Samsung and (by now) Jay-Z to surveil their customers.
So is it true? The biggest evidence that it is comes from the app's permissions, which genuinely are broader than they need to be. In particular, the app asks for data concerning a person's current location and their phone number, neither of which seem much related to the delivery of audio files. "I wouldn't call them superfluous permissions," says Alicia DiVittorio of Lookout Mobile Security, "But I'd say that the likely reason that they want access to your location and phone number is to provide more targeting data." That data is usually used to target in-app ads, which are much more lucrative when paired with user information. But the Magna Carta app isn't serving ads, which raises the question: what are they doing with all that data?
"It's probably worth $25,000 each time they sell it."
The data is also quite valuable, even by itself, especially since the companies would get a check every time they found a new customer. "If they decide to sell it, they could sell it over and over again," says Michael Darviche, CEO of data marketing firm BlueCava. "It's probably worth about $25,000 each time they sell it." Putting the data on the open market could attract publicity, so it's unlikely that it will happen exactly that way, but it does give a sense of changing market values in the shift from CDs to smartphone apps.
"This reminds me of the Path issue."
More likely, according to Darviche, is that the data stays in-house, either with Samsung, Jay-Z or both, where it can be used to plan new products and campaigns. It's especially useful for Jay-Z, who's also selling clothing at Rocawear and promoting other artists through his Roc Nation music group. The million phone numbers that signed up for the Magna Carta app would be useful for promoting either product. As Daviche puts it, "It ends up becoming a pillar of value that he can build other businesses on." Still, like most marketing plays, the app's data collection is icing on the cake. The primary effect is just what it seems like, building buzz for Samsung's Galaxy line. "The overwhelming value for Samsung is that they're making their phone sexy like Apple," says Darviche. The overwhelming value for Jay-Z is, well, $5 million dollars.
Still, the lingering privacy issues may be around for much longer, as consumers learn to hold apps to the same standard they'd hold Facebook or Google. "This reminds me of the Path issue," says DiVittorio, referring to a controversy last year when the social network was caught pulling users' address books onto its servers. "Every year, there's one or two big privacy jolts that shock people into realizing that they need to pay attention to these things." It remains to be seen how large a backlash the companies will face over the app, but if DiVittorio is right, Jay-Z may end up blazing a different trail than he predicted.