Unless you were under a rock, you heard about Jay Z’s TIDAL streaming service. And you should have also heard that not everyone was impressed.
Much of the public and media were either cynical or confused that 16 wealthy musicians demanding higher royalties.
Vania Schlogel, Tidal’s chief investment officer and chief industry liaison, sees things differently. Schlogel, who joined Roc Nation as chief investment officer in December after spending nearly six years with private equity firm KKR, says artists are being criticized merely for doing something different. “There is some bravery for what these artists are trying to do. It’s not to fill their own pockets, it’s to create a sustainable industry.”
He recently sat down with Billboard and answered a couple of questions that may shed some light on the TIDAL movement.
Here are excerpts of the interview.
What will royalty rates look like?
Because there isn’t that free tier, the royalty payment on a per-stream basis will be multiples higher on a per-stream basis than services that offer music for free. That’s point number one. Point number two is artists that join — when it comes down to it, technology is distribution, what they bring is the art. And without their art and their content, this distribution is meaningless. So it’s important for us fundamentally that artists participate in the equity of this company. Number one, they’re gonna be paid multiples higher than on a per-stream basis. Number two, they’re gonna be participating in the equity upfront, and that’s a real, core tenet.
Some critics are already saying that [the] announcement looked like a meeting of “music’s 1%,” that these were just superstars looking to make themselves richer. What would you say to that perception of Tidal?
I would almost say it’s the reverse of that. Ok, these are established artists who care enough about the sustainability of the industry, stepping out on a limb and doing this. Of course there are going to be people who are cynical. But look, at the end of the day, if any established artist goes out and gets an endorsement deal — no one’s gonna criticize them for that because that’s how they make money. But if an established artist goes out and steps outside of the box and says, “I’m trying something different,” that invites criticism. There is some bravery for what these artists are trying to do. Its not to fill their own pockets, it’s to create a sustainable industry.
By virtue of that definition, because that is our thesis, if we’re not treating music like a loss leader, then that’s good for indie artists, emerging artists, songwriters, producers. Music is a whole industry and it takes money. The reality is it takes money to create music. It doesn’t just happen for free. We want to make sure music continues to be made, that songwriters are able to actually write songs rather than having to say, “I do a 9-to-5 in New York, and don’t have time to write songs. That doesn’t make it a sustainable industry.
What do you hope Tidal accomplishes this year?
We need to fundamentally change the discourse that we’re all — and I’m not making this an indictment — that everybody has been trained to think that music is this cool thing in marketing used to sell other things, that music doesn’t have a value in itself. And it’s like, no we can’t do that, we can’t allow that to be the conversation in how things are going. Everybody else gets up, we go to work and do our 9-to-5, we get paid. Intrinsically music itself has a value. It doesn’t just have a value because it sold consumer electronics. We all feel that emotionally, and now it’s just making sure we marry up that emotional connection with the real understanding of all that’s gone into the industry and gone into making that song continues to produce a sustainable music industry.
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