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Jay Z at TIDAL launch

Source: Kevin Mazur / Getty

Jay Z has been making major moves to change the face of music and how it is distributed to listeners, and now he’s here to answer all of your tough, important questions about the music-streaming service.

As a service whose mission is very much for the financial benefit of the artist and their music, many are wondering what’s in it for the customer who is listening to their music.

Hov visited NYU this week to break it all down, and give some insight through a Tidal Q&A for students, and he answers just about everything.

As far as what kind of headphones will make a difference with the higher quality music, Jay has some suggestions to consumers:

How do you take into account the devices and headphones that people are listening to high fidelity audio on? If I have a pair of $10 headphones, how would that compare? Do you guys maybe see a partnership with a headphone company in the future?

JAY Z: We’re exploring those opportunities as well. And I think that if you have a $10 pair of headphones, you should probably buy the $9.99 plan. And if you’re like Vania’s artist friends and you deck your whole house out with hi-fi, then you probably want the hi-fi plan. But we’re definitely looking at opportunities; we have like four people looking at three or four headphone companies.

If you’re torn between your current subscription on Spotify and getting a new account on Tidal, here’s what Jay had to say:

If it’s on Tidal and somebody has a subscription to Spotify, they faced with a choice, right? Either get both or not have access to any exclusive content.

JAY Z: At some point they’ll be faced with that decision. Again — there will be other things. This isn’t just about music; it’s also about concert ticketing. It’s a holistic place where the artists will live in. You may be able to download a song for free, but you’re not getting into concerts for free. There are different things that we offer. It’s not just songs — we’re offering value.

Read more of the Q&A below, and the full transcript in the link at the bottom.

“How is Tidal’s payout structure for artists different from competitors such as Spotify?”

JAY Z: I know everyone thinks “new company, main business competitor is Spotify” but we’re really not here to compete with anyone, we’re actually here to improve the landscape. If just the presence of Tidal causes other companies to have better pay structure, or to pay more attention to it moving forward, then we’ve been successful in one way. So we don’t really view them as competitors. As the tide rises, all the boats rise. SCHLOGEL: The royalty rates will be higher than other services. In addition to that, there won’t be that free tier that’s been depressing the recorded music industry, and frankly been a part of what’s been driving the downfall of the recorded music industry, is that free consumption. Music is not free, fundamentally. Someone came in and produced that beat, someone came in and sang that song, someone wrote that song. Someone came in to clean the studio afterwards. There is an entire ecosystem around this, and we’ve somehow come to believe that it’s okay to pay hundreds for consumer electronics but to pay nothing for the music that helps sell it. It’s around the education process, with that there will higher royalties. And then another point that I want to touch on that’s really important philosophically, not just from a dollars and cents perspective, is the equity ownership. All artists who come in — and this is an open platform, an open invitation — will participate in the equity upside. And that is important, too, because of that participation in the process, by having a board seat, by actually being an owner in this. It’s a different type of involvement.

“Will “exclusive content” be available for purchase anywhere?”

JAY Z: I don’t know. It’s available for streaming immediately. I don’t know where streaming will go in the future. The analytics that we’re seeing tell us that streaming is the next thing, and downloads are going down. I feel like with the history of this platform, from vinyl to where we are now, it just seems like the next logical step. Before you had a CD, you put it in, you had the download, they eliminated the CD so just downloads. Now you’re going to eliminate the download and you just play it. So it just seems like the next logical step in what’s going to happen.

“So you don’t think there will probably be much of a need?”

JAY Z: Not from the analytics that we’re seeing. It seems like downloads have gone down.

“What exactly were the contents of the document that was signed during the press conference?”

JAY Z: Just a declaration that we’re going to work really hard to improve what’s going on in the pay system as we know it. You guys may have seen some of the stats like, Aloe Blacc had a song that was streamed 168 million times and he got paid $4,000. For us, it’s not us standing here saying we’re poor musicians. If you provide a service, you should be compensated for it. And not just artists — just think about the writers and the producers. Like an artist can go do a Pepsi deal or something — I shouldn’t have singled out Pepsi — but they can go get an endorsement deal somewhere and you know, go on tour and sustain themselves, it helps their lifestyle. But what about the writers who do that for a living? The producers? That’s it for them. What about Jahlil Beats, who produced Bobby Shmurda’s “Hot N**ga”? He went on to get a $2 million record deal or whatever, and Jahlil Beats just put the song out. So he wasn’t compensated for that song at all. There are dozens — more than dozens, there are thousands and thousands of those sorts of stories of someone who worked at their craft, worked really hard at the studio, they did their job and people loved it and consumed it and they just went home. I think we’ll lose a lot of great writers in the future because you have to do something else, because you can’t sustain a lifestyle, and I think that’s a shame. That someone has that talent and just isn’t being compensated because someone needed a business to profit off of their work. And we’ve seen that time and time again, we’ve seen it time and time again. Companies that pretend to care about music and really care about other things — whether it be hardware, whether it be advertising — and now they look at music as a loss leader. And we know music isn’t a loss leader, music is an important part of our lives.

As musicians, we’re taught to value the quality of high fidelity music, and we’re most likely willing to spend extra. While we may be in the minority, the general public is more than content with purchasing or streaming mp3 files at little to no cost. What demographic is Tidal targeting with the charge of $20/month for high-fidelity music? How will the option of high-fidelity attract listeners who aren’t in that minority?

SCHLOGEL: First off, there are two tiers. There’s your $9.99 tier and there’s your $19.99 high-fidelity tier. Interestingly, there are a lot of folks who do care about that — I mean, what’s also interesting is the people who, maybe not all music students, but they’ll pay $10,000 to kit out their house with speakers and then put compressed files through those speakers. Which blows my mind, because I’m like “hmm.” There is that audiophile group, who do care very deeply about it and that high-quality tier matters a lot to them. It also matters a lot to the artists, not just Jay but, sitting in the room with the other artists that are behind Tidal… I didn’t even fully appreciate coming into this how important that sound quality was. So many artists were just like “Man, I really want to communicate that song that way,” and it’s important to them to have that option there for people who want to hear it like that. JAY Z: We believe that if you consume music for free, and that’s what you want to do, that’s your choice. There are good and bad parts of a democratic society — do what you like to do. I’m just talking to people who care about musicians and the music they consume. That’s who we’re speaking to. There was a time when I walked into a mastering session and we’d finally gotten Kanye to get on a plane, because he was at the end of his album, and there were 70 mixes of “Stronger” and “Good Life.” Seventy. So imagine a person goes through 70 mixes just to get something right, the way they believe is right, in their mind, and you just put into a compressed file and you just send it out. Some people really care about, and are really passionate about their music and want it to be heard the way it was intended. It’s not for everybody, and we’re not trying to force it on you but if that’s what you like and that’s what you really care about, then you have the option. And that’s what Tidal is saying.

Will artists who aren’t in the top tier of the music market, who aren’t expected to sell as much, have a higher chance

of having virtually no equity?

SCHLOGEL: I’m going to go into Finance 101 for just a second. So, there are two ways to look at this, which is a nominal percentage amount — the size of your slice of pizza, and the slice of the pizza overall. So if you’re gonna have x% of a tiny pizza — I could set up my little company here and own 100% of it, and that number sounds fantastic, but it’s 100% of this little thing that is meaningless. My only point of saying all this is, as we grow along to become a bigger company, realistically, of course, we can’t give out the same percentage to everybody, but by time the size of the pizza is growing and everybody’s sharing in that upside. I didn’t mean to nerd out there, but there’s always some negativity around “Oh but that person got this, this person got that,” it’s not like that. We really just want artists to share in the upside as the pizza grows. JAY Z: Yes.

What changes do you see coming to streaming in general, and how does Tidal plan to react to those changes in a competitive environment, with everybody fighting for number one?

JAY Z: We’re cool with, you know, they can be McDonald’s, we’ll be Shake Shack. We don’t have to be number one, we just want to be very specific and very great at what we do. We want to do a very specific thing, we want people to come to Tidal for a specific sound, a specific experience, and to know that there are going to be the greatest new artists in the world, the biggest artists, introducing the newest artists, collaborations and things you’ve never seen before. That’s what we’re going to do. After that, the world decides. The universe decides.

Do you think there will ultimately only be one service that everyone uses?

JAY Z: The universe needs balance. There’s light and dark, there’s day and night. There’s young and old. There’s always an alternative in life. So I don’t believe there will be one service.

As a company where do you see Tidal in 1 year, 3 years, 10 years?

SCHLOGEL: It’s a great question, and it’s like the other question that asked “How are you going to react to this and that?” And immediately my thought was, “We don’t want to react! We want to create!” Right? And I’ve said this over and over again so Jay is probably tired of hearing it but, the entire global streaming market, the number of paid subscribers, is less than Netflix alone. So it’s not even like we’re entering some sort of established market — no, we’re creating as we go along. And that to me is what’s really interesting, that’s why I’m personally drawn to this as a life project. We’re going to make it what we want it to be, and the artists will make it what we want it to be. And frankly, one huge definition of success — and Jay alluded to this earlier —is if the tide rises for everyone. Right now, the way that things are trending, if they keep trending at this level — we’re not in a sustainable situation, are we? I mean, we keep having this conversation. Someone asked me the other day, “Well, isn’t free streaming better than piracy?” And I responded “In any other industry, are you having the conversation around ‘Yeah, but, if they’re gonna steal anyways shouldn’t you be giving it to them for free?’ Would you have that in the auto industry, the fashion industry, the tech industry? No! You don’t just give it away for free because people might steal it! That just means you need to change the conversation. We want to grow the market, we want to allow the content creators to have better control over the distribution of the art, and we want the tides to rise with everybody. JAY Z: And I think I should get an iPhone with my Lauryn Hill album. Not the other way around.

Read the full transcript from the Q&A on The Fader.

SOURCE: The Fader | PHOTO CREDIT: Getty

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