Tidal's Point Break
Jay Z’s music service has new apps, concert tickets, and a lot to prove
By Micah Singleton
Jay Z called me.
It was just after 3PM on a Tuesday afternoon in mid-May — right after I’d attended his B-Sides concert in New York, and about a week into researching his Tidal music service. A few minutes before Jay called, I got a call from someone at Roc Nation telling me he wanted to have a chat. And I… tried to reschedule.
I told Jay Z’s people I couldn’t talk right now. And then hung up.
What Jay Z didn’t know is that I was running late for a haircut. I had just come off a flight, and my hair was looking rough. It was time to make a life decision: talk to Jay Z — rap legend, musical icon, one half of the closest thing we have to an American Royal Family — and look busted, or get a fresh cut and risk passing up a conversation with Shawn Carter himself.
You don’t know how fast you can find a contact in your phone until it really matters.
I called Roc Nation back, asked them to ignore my initial display of insanity, and eventually found myself discussing Tidal with Jay Z.
Jay Z sounds just like you would expect Jay Z to sound: relaxed, confident, and contemplative — his words don’t feel calculated, but they’re also not off the cuff. Then there’s his laugh — that infamous, full-throated laugh. When we touch on a topic he’s passionate about, like Tidal, he comes to life, expounding on the subject.
Jay wouldn’t go on the record when we spoke, insisting that my story was about Tidal, not about him. And in a sense he’s right. This story is about Tidal: its rocky launch and its perhaps quixotic attempt at charting a new path in an industry undergoing massive change. But it’s also about Jay Z, one of music’s most entrepreneurial spirits, trying to resolve the inherent tension between technology and music.
Tidal’s next attempt begins again today: Lil Wayne has signed onto the service and is releasing an exclusive new single called "Glory." Tomorrow, new desktop apps for Mac and Windows will arrive, along with a ticketing feature backed by TicketMaster that gives subscribers early and exclusive access to concert and music festival tickets. And there’s new pricing for college students starting next week: $4.99 for standard and $9.99 for the lossless Hi-Fi service.
There’s no guarantee that anyone can run with Apple or YouTube, but after talking to a host of Tidal executives and employees, it’s clear Tidal plans to be as aggressive as possible as the next generation of music unfolds.
Vania Schlogel has been on a nonstop press tour for weeks. The senior executive of Tidal is eager to reshape the narrative around the company after its tumultuous launch. She admits Tidal’s rollout did not go as planned, and in interview after interview, she sells the streaming service as an alternative to established companies like Spotify and iTunes.
If Jay Z pulled off a coup by getting 16 artists to sit down and agree to work together, his second biggest accomplishment around Tidal was getting Schlogel to be the company’s public face. A former principal with the private equity firm KKR and an investment banker with Goldman Sachs, Schlogel was a member the exploratory group Jay Z assembled last summer and has been leading the charge ever since. If Tidal has gained any ground in the last few weeks, it’s largely due to Schlogel schlepping across TV, print, and digital publications reiterating what Tidal should have said during its launch.
Since Jay Z purchased Tidal back in March, the dominant narrative has been one of hubris. The company launched with a widely panned video featuring Jay Z saying Tidal would "change the course of history," while putting down "tech companies."
"It’s about putting humanity back into a being an artist," Madonna followed up. "Not technology. Art."
"I talked to a lot of people outside of the industry, and everyone was like, ‘What took so long?’" says Jay Z, punctuating the question with his hands. "Like this thing was the thing everyone wanted, and everyone feared. If these artists can sit in a room together, the game changes forever."
Six weeks later, the game has not been changed forever. And Tidal’s messy first impression — made worse by an even more bombastic press conference — continues to haunt the company.
Forbes called Tidal a money grab by a collection of already rich artists; The New Republic argued that it was a sort of wealthy "worker cooperative," doomed to fail in part because, unlike other streaming services, it doesn’t offer a free music tier. Flavorwire pointed out that Tidal’s exclusives — like the music video for "Feeling Myself" featuring Nicki Minaj and Beyoncé — were quickly hitting YouTube and making subscriptions unnecessary. Just last week, Bloomberg called the service "a complete disaster," and speculated that Sony Music could deal the service the ultimate blow by pulling Beyoncé’s catalog. (Sony has since denied the rumor.)
"For me personally I had this moment where I was a little down," says Schlogel. "It wasn’t about people saying negative things, it was around the misperception that was frustrating."
Meanwhile, a new threat is fast approaching: Apple appears to be ready to launch a new streaming service of its own next week. From a distance, Apple and Tidal appear to be making similar moves: Apple acquired Beats (co-founded by fellow rapper Dr. Dre) last year, and multiple sources indicate Beats’ other co-founder Jimmy Iovine is lining up exclusive artist deals and eschewing free all-you-can-eat services in favor of paid subscriptions. The difference is that Apple already reinvented the music industry once and is the world’s most valuable company, with over $100 billion in the bank and the runaway success of the iPhone to fall back on. Tidal is, well, Tidal.
And even if Tidal can hold serve against Apple, surveys say teenagers mostly listen to music for free on YouTube. This is definitely not going to be easy.
Tidal’s official headquarters and 100-person tech team are in Oslo, Norway, but the US operation is based out of the Times Square offices where Jay Z’s massively successful label / management / sports agency conglomerate Roc Nation makes its home. The tranquil, glass-encased setting boasts some of the best views in the city. Priceless Basquiat paintings line the walls.
Tidal's share of the office is rapidly growing, expanding into the rest of the lofty space. Stepping out of the elevator, you wouldn’t know you’ve walked into a company most of the tech press has written off as doomed. Employees are upbeat, either impervious or oblivious to the public backlash against their employer. Over several weeks, I saw a steady stream of new Tidal employees every time I stopped by to visit: changing the game apparently requires quite a few people.
Tidal as it currently exists began last summer, when Jay Z and his team sat down to assess the state of the music industry. "Naturally we saw that it’s trending toward streaming, away from ownership," says Schlogel. "That’s where we need to go, too, and that’s what we need to shape the future of." But streaming had issues: Spotify, the dominant streaming service, was under constant fire for paying artists slim returns on licensing rights, with blame constantly shifting to and from the labels.
Jay Z, whose success in business is on par with his success in music, recognized an opportunity to establish a different sort of streaming service that paid artists fairly. ("Fairly," of course, means "more.") At first the group considered building an entirely new streaming service, says Schlogel, but time constraints came up. "If we did this pure DIY, our time to be able to actually step in and reach the subscriber was at least 12 months or something like that. So we felt like stepping into a company that was already running was the next step."
So they went shopping.
In November, the team found Tidal, a streaming service launched by the Norwegian company Aspiro. Tidal was essentially a rebranded version of WiMP, a streaming service that’s been available in Europe since 2010. For $20 a month, Tidal offered CD-quality streaming, far surpassing the average quality of MP3 downloads and Spotify streaming. It had been well-received by the niche audiophile market, but for most mainstream consumers, it was easy to write off as just another streaming service chasing Spotify’s throne. There was a nice bonus of 75,000 music videos, but unless you were obsessed with premium audio quality, there was little reason to sign up for it.
It was an unassuming product, but for Jay Z’s group, it was the perfect opportunity. WiMP had been successfully operating in Europe for years, had the infrastructure to handle growth, and didn’t need a redesign. "We were stepping into a relatively feature complete, mature product," says Schlogel. "They had a great team there, really good tech guys… almost immediately we knew."
But good tech for tech’s sake isn’t really what Tidal cares about — part of the reason the company has struggled talking to the product-obsessed tech press. Like many in the media industry, Jay Z is frustrated by the enormous profits tech companies make against media consumption. "I feel like YouTube is the biggest culprit," he rapped during his B-Sides performance. "You bought nine iPhones and Steve Jobs is rich, Spotify’s $9 billion, they ain’t say shit." Tidal, by contrast, is supposed to be a streaming service for artists, by artists. In the early 2000s, music companies wanted a cut of every iPod sold; now the artists want a piece of every song streamed. The battle lines might be new, but the conflicts are familiar, and the players are learning to find their leverage.
"We knew that just one artist alone can’t change an entire industry, or create a sustainable music economy," says Schlogel. "We knew before we went for Tidal that it was going to have to be a group of people."
Using Jay Z’s connections, Tidal pulled in some of today’s top-earning artists, including Beyoncé, Kanye West, Madonna, Jack White, Jason Aldean, Nicki Minaj, Daft Punk, Alicia Keys, J. Cole, Rihanna, Usher, Arcade Fire, Chris Martin of Coldplay, Calvin Harris, and deadmau5. Each of them has taken an equal ownership stake in Tidal, rumored to have cost over a million dollars apiece. "The artists are equal owners," Schlogel says. "Jay’s provided funding to the company as basically a below-market interest rate loan."
Other artists declined to buy in: music industry sources say Apple’s Jimmy Iovine has tried to hire artists away from Tidal, including Jay Z himself. (Jay Z rapped "Jimmy Iovine offered a safety net," at his B-Sides show.) Drake reportedly turned Tidal down at the last minute in favor of Apple, and Taylor Swift appears set to go with Iovine as well.
In late January, Project Panther Bidco, a company owned by Jay Z, purchased Tidal for $56 million. Jay Z wouldn’t fully take control of the company until April 15th, but during the intervening four months, two events took place that created — and perhaps cemented — Tidal’s out-of-touch image.
A week after the acquisition, Tidal’s 16 celebrity owners assembled for the first time at the Fig House in Los Angeles. Jay Z, Beyoncé, Madonna, Kanye West, Chris Martin, and others were there in person. Daft Punk showed up in full helmet. Alicia Keys, Usher, and Win Butler and Regine Chassagne of Arcade Fire attended via Skype feeds projected onto a huge screen. Champagne glasses clinked. The video cameras were rolling, ultimately creating the widely criticized video that made the summit seem like a room full of rich musicians congratulating themselves on changing the industry for their own benefit with few specifics to back up their claims.
But Schlogel insists there was substantive discussion at the Fig House summit. "I think at that point everybody felt like they didn’t want people getting between them and their fans," says Schlogel. "And they worried about emerging artists and emerging songwriters." This is the inaccuracy that clearly bothers her the most. "If it’s all about wealth, you don’t care about the sustainability of something, you care about short-term gain. It’s completely the opposite of that."
"You can’t make it to what we’ve accomplished without having that love of music be the foundation," Jay Z told the room. "I think it’s one of the things that sets us apart from a tech company selling advertising or selling hardware. Right now they’re writing the story for us, we need to write the story for ourselves."
The group agreed to build an artist-controlled platform that could deliver a viable income stream for both new and established musicians. Tidal would pay royalties as much as four times higher than Spotify’s. And it would offer exclusive features and concert series to attract listeners.
"[The meeting] was about focusing on sustainability, which by definition is investing in emerging artists, and empowering artists to be closer with their fans," Schlogel says. "At that time everybody was really into the mission statement of that, but it’s a business. We went into all the strategies around investing in emerging artists, giving artists greater creative control so that their fans actually see what the artist wants them to see rather than what a corporation wants them to see," Schlogel says energetically. "How do we create a place where it’s commercially viable for artists to release something that might not hit a Top 40 outlet, or might not get corporate sponsorship, but it doesn’t matter because it’s creative and fans love it anyway? How do we create a commercially viable ecosystem around that?"
When news of the gathering at the Fig House began to leak out, Tidal hastily scheduled a launch event for March 30th. The plan was to introduce the owners and lay out a vision, without revealing too many details.
It turned out to be, broadly speaking, a train wreck.
The Fig House video, which ran before the press conference started, felt glossy, bombastic, and purely promotional. Then Tidal’s celebrity owners came on stage to sign a mission statement and hype the moment — and hype they did. Alicia Keys said they would "change the course of music history" and dropped a Nietzsche quote. ("Without music, life would be a mistake.") Madonna threw her leg on the table while signing the declaration. Usher, the final signer, put down a thumbprint as a flourish. After they’d all signed, music’s hottest stars stood together on stage, laughing and talking, and seemingly not quite knowing what to do next.
It was the quintessential launch event for an artist signing a new deal, or perhaps a Marvel movie. But in the tech world, it was seen as an out-of-touch group of musicians making sweeping promises about a new service while offering little to no detail; the self-important video and event were roundly mocked.
Within days, Tidal was being called a flop across the internet. Artists like Death Cab for Cutie frontman Ben Gibbard, Mumford & Sons, and the perpetually upset Noel Gallagher criticized the company. "I think they totally blew it by bringing out a bunch of millionaires and billionaires and propping them up onstage and then having them all complain about not being paid," Gibbard told The Daily Beast. "This thing is going to fail miserably."
Schlogel admits that the launch — internally referred to as "the 30th" — could have been handled better. When I asked her if she would do it again the same way, she just says "no."
"I just did not anticipate that within 48 hours people would jump in so quickly and tell this story for us as if it’s gospel. That was so fast." The plan had been to launch with the mission statement and then launch each new feature individually with some fanfare, but Tidal hadn’t counted on the speed of internet judgement.
"We weren’t even given a month of our own actions to tell the story," Schlogel says, somewhat pensively. "Had we known at the time — had I known at the time — yeah, we would have filled that void more with our own words and then backed it up with actions. But at the time, we just thought, okay we’re going to back it up with action and that would be enough."
Launch disaster aside, Tidal pushed forward, introducing a trio of features over the course of April. Tidal X, a concert series and live-streaming platform that showcases established artists to subscribers, was announced on April 10th. Jack White, J. Cole, and Jay Z have all held concerts under the Tidal X banner, the last of which was viewed over 100,000 times during the live stream. Not huge numbers, but Tidal insists it’s beating expectations. But it’s Tidal Discovery and Rising that hint most directly at the company’s ultimate ambitions.
Discovery lets unsigned artists upload music to the service and pick a preferred royalty structure without giving up rights to their music. Unsigned artists currently have ways to get onto Spotify and iTunes, but Tidal is making a point of promoting these artists, including a planned series of concerts around the US featuring the top streaming Discovery musicians. "We’ve already had hundreds of artists upload through Tidal Discovery," says Schlogel.
Tidal is more selective about which artists get added to the Rising program. Sveinung Rindal, who heads Tidal’s 15-person editorial team, says his crew "looks for artists that can grow a bigger audience and be players in the music game for years to come." Rindal’s team also runs Tidal’s digital magazine and playlist curation for the service. The plan is for artists included in Rising to get free PR and marketing support from Tidal, spending what Schlogel calls "real dollars." In some cases, they’ll be invited to perform live shows and be featured in behind-the-scenes videos and mini-documentaries.
Lili K, a neo-soul singer based in Chicago, was one of the first artists to be featured in Tidal Rising. "I honestly wasn’t quite sure what to expect," Lili K told me. Tidal filmed a mini-documentary starring the singer in Chicago and featured her content on its homepage, and Lili K’s music has now been streamed over 70,000 times on Tidal since being included in Rising. In contrast, Lili K’s YouTube page has only generated 36,000 views since 2010.
"I do know that because Tidal has supported me so much I think it has gotten me the most traction," she says. "With Spotify and iTunes — I’m not saying they’re bad platforms or anything — but there is so much content, and a lot of times when you’re a smaller artist like me, you can kind of get buried underneath the bigger things. But with Tidal what’s really cool is my content is up there on the front page with the big superstars." If this is beginning to sound suspiciously like Tidal is using the promotional power of its streaming service to act like a label, well, you’re not wrong. In effect, Jay Z, the former Def Jam CEO, is creating a talent pipeline, full of new artists to break.
Between Discovery, Rising, and Tidal X, Tidal comes to resemble a full-fledged artist factory. "Yeah it’s kind of the dream," Rindal says. "It makes sense. You have to look into the future to see if it goes that way. For us [on] the editorial team, it’s all about covering all the different stages of a music career, from entering the stage [to] ending up as an established artist with a great audience."
This is where Tidal breaks with Apple and other music services most explicitly: while observers have predicted for years that Apple would leap into the music business by starting its own label, the company seems content holding the yearly iTunes Festival and collecting the fat margins that come from owning the dominant music service. Apple is famous for vertically integrating its products from chips to design to software; Tidal seems eager to vertically integrate artist discovery, distribution, and promotion. It’s hard not to note that Jay’s Roc Nation label nicely rounds out the stack, although Tidal is quick to note that Roc Nation has no special claim on Tidal artists. (And the major labels own stakes in Spotify.)
Since the new ownership group acquired Tidal, subscribers have nearly doubled, jumping from 500,000 to 900,000 in just two months. That includes over 200,000 Hi-Fi subscribers, up from 12,000 at the end of 2014, according to the company’s public filings. Those numbers are tiny in comparison to other streaming services, but the company says they surpassed internal expectations. Spotify, which launched in 2008, didn’t reach 1 million subscribers until 2011 — though of course, that was a different time.
But Tidal’s small subscriber base is apparently engaged with the service: Nicki Minaj’s "Feeling Myself" music video featuring Beyoncé hit 500,000 views in 10 days. That’s nothing on a service like YouTube, which has 1 billion users, but the company sees it as proof that subscribers are tuning in. The challenge now is to grow its user base in a streaming market that’s about to get extremely crowded by Apple.
Tidal is releasing several new products and features now, a week before Apple’s supposed music service launch. Tidal has new desktop apps for Mac and Windows, reduced student pricing, new live-streaming features, and improved search and social features that let you know when an artist is live on the service, and listen to what they’re listening to. "Our core identity is all about the connection between the artist and fan," Tidal CTO Rune Lending says. "We are working hard to translate that into our social components going forward."
Tidal might have been borne of the tensions between artists and tech companies, but standing still on technology isn’t going to work when you’re up against the iTunes juggernaut. "We’re increasing our tech department to make sure we’re able to push [out] all the kinds of things we want to do," Lending says. "We already have a good pace of rolling out new updates quickly, and with an even larger team I think we can get even better at doing that."
But Tidal’s play isn’t just in adding tech features to reach parity with Spotify, Rdio, and Apple. The company is banking on its ticketing service and Tidal X concert series to separate it from the pack. The ticketing program gives subscribers early access to concert and music festival tickets, as well as exclusive access to Tidal X tickets directly on an artist’s page within the app. Live Nation — the massive concert promoter that puts on tours for a number of Tidal’s owners — worked with the company to integrate Ticketmaster into the app to power the back end of the ticketing service, and Tidal will receive a portion of the ticket fee revenues.
"There’s obviously part of the business that overlaps with Beats or Spotify, but we don’t consider ourselves just a music streaming company," says Schlogel. "There’s going to be early access to tickets, to events that usually sell out very quickly, and exclusive merchandise." Tidal also plans to continue adding independent movies like Daft Punk’s Electroma to the service. "We also want to be a creative hub where indie filmmakers can release their films," says Schlogel. "We’ll be putting more movies on there. It’s going to be more like an entertainment and cultural hub."
No one believes in Tidal. Okay, there are some fans, and stans, and audiophiles who use the service. But everyone else either hates it or hasn’t thought about it again since seeing that commercial.
A month ago I didn’t believe it had a future either. But there are too many superstars backing it to write it off immediately. There are too many ways that Tidal can and likely will stay in the public eye: Jay Z or Kanye or Madonna will drop an album you can only get on the service; they might only sell tour tickets through the service; the only way for you to buy the next Yeezys may be through Tidal. These artists move product, and the product they want to move right now is Tidal.
Tidal’s even managing to convince artists who were initially skeptical. "The whole thing got blown out of proportion and taken out of context," Marcus Mumford of Mumford & Sons told The Philadelphia Inquirer about the band’s initial criticism of Tidal. "I ended up having a conversation with Jay Z about it. He was gracious enough to give me a ring. And I get it much better now. He’s trying to create a sort of farmers’ market for music. It’s sort of an old-school record store. Which I like, now that I understand the vision."
I got a similar call, and I can confirm that Jay Z is a passionate and talented pitchman for his new service. Maybe he should just call everyone.
But chances are, Tidal’s most powerful salesman won’t be calling you to personally expound on the merits of his company. And that’s Tidal’s biggest obstacle: changing perception. There’s the real chance that the public has moved on from Tidal and there’s just no going back. It’s possible that no matter what features they release and stops they pull out, the damage has been done. It’s also entirely possible that Apple’s service will dominate streaming music just like it did with downloads and iTunes. But when you speak with Tidal’s team, you don’t sense fear of what’s coming around the corner. They are still determined and confident that they can — for lack of a better phrase — turn the ship around.
"I’ll never forget I had this moment where someone had gone to the J. Cole Tidal X concert and tweeted, ‘thank you Tidal, this was the best night of my life,’ or something," says Schlogel. "And I had this moment where — it’s silly, it’s not like corporations sit in a board room and look at one super happy fan and say, 'Yes our business is working' — but for me in that moment, I saw that person’s tweet and was like, we just gave this woman an incredible experience."
"I’ve heard it from the mouths of the artists themselves: if they can give subscribers something like that, it means something."