Why the hoopla over Jay-Z and Tidal misses the point

Jay-Z’s bizarre, yet highly orchestrated, press conference anointing him and his fellow multimillionaire musicians as music streaming arbiters was focused in the wrong direction.

Taylor Swift’s breakup (yes, another one) with Spotify last fall was the spark that led to this cavalcade of music royalty together on stage. And it was the issue of royalties she consistently harped on that culminated in Jay-Z acquiring the Tidal music streaming service. For those who aren’t aware, Tidal initially launched as a service that offered higher quality streams for a subscription of $20 per month. Jay-Z’s spectacle was to announce that this would be a two-tiered service where regular quality (like that of Spotify) would be $10/month and Hi-Fi quality would be the same $20/month.

As before, there would be a 30-day free trial to test it out, but no free tier to listen to music without a subscription, which Spotify offers. It’s that last part that probably irked Swift and other musicians the most — music for free. Getting peanuts in royalties from the service is likely what fueled her to remove her valuable catalog of tunes.

What’s missing in this dispute is who actually owns the music. While there are a number of inherent issues in how royalties are collected and distributed from music streaming services, the blame doesn’t fall squarely on the services themselves. It should also go to the record labels. Millionaire musicians can grandstand on a stage and preach about fairness, but they sound more like politicians than grassroots organizers.

Not one of them explained in plain English how they were going to make streaming music viable for all artists. Without articulating what was wrong with the business model that apparently prompted this move, it’s hard for people to care and support Tidal. They essentially neglected to mention that they don’t really own their own music.

A platform seemingly devoted to fair compensation for artists should probably have a bone to pick with the labels taking the lion’s share of the pie. Except the labels have long acted as bankrolls and investors for the artists they sign, ultimately paying for everything in advance — studio time, production, mastering, promotion, distribution and whatever else comes in between those things. Considering their combined wealth, Jay-Z, Beyonce, Madonna and the other fat cats on stage could probably afford to create, release and promote their own albums without the help of a major label.

Independent artists have to scrape together funds to do those things, or be fortunate enough to capture someone’s attention and score a contract with a label that likely isn’t very favourable to them. Watch a few episodes of VH1’s Behind the Music and you’ll inevitably hear tales of underhanded corruption and outright theft when they started out. How does Tidal change this paradigm if most of the artists in its library don’t truly hold ownership of their music?

That might explain why artists of this magnitude don’t just shun the major labels and do everything themselves. I’ve long wondered why more of them don’t sell their craft directly to consumers. “Hey, here’s my latest album to download for $10, no questions asked. And the money you pay will all go to the producers, songwriters, session artists (if applicable) and myself.” Radiohead once famously did that. Jay-Z chose to release his last album, Magna Carta Holy Grail, in tandem with Samsung. And who can forget the fiasco with U2 and Apple last year via iTunes?

The truth is, if the major labels didn’t own the distribution rights to all that music, streaming services like Tidal probably couldn’t exist. Imagine a scenario where Tidal, Spotify, Rdio, Deezer and all the other services have to negotiate deals with every artist or group separately. It’s virtually impossible to make that happen, and so, the major labels simplify the whole process — a detail no one on stage mentioned during or after the event.

Instead, they have aimed their underlying enmity at the likes of Spotify, suggesting that they are the ones shortchanging them. How are they doing that? No one really knows.

Had this been positioned more as a movement to change the very essence of how the music business works, it’s not hard to believe that public sympathy and support would be palpable. But the people who were on stage probably don’t need or want to change that. They’ve made their millions with the current structure and are bound to continue doing so, even though it’s fair to assume that a lot of their respective fortunes came from touring, live performances, endorsements and investments, not record sales or royalties.

The labels like streaming music services because they still take most of the proceeds, while eating into piracy. Tidal offers 25 million tracks, yet there were 16 artists on stage worth billions of dollars. Not one indie artist was on hand, and none were mentioned by name. Nor was a single word of criticism uttered toward any of the labels.

For a guy who is supposed to know a thing or two about the optics of publicity, Jay-Z will have to do more to explain how this collective investment by super rich artists benefits starving artists trying to make a dime.