Does Jay Z Have The Solution To The Decline Of The Music Business? Well, Maybe For Himself And A Few Pals

I'm not good with remembering dates things happened in my life-- beyond my birthday and the day I stopped wanting to use drugs forever. But I do remember that, although the music business was on an unhealthy trajectory when I retired a year or two after Bush stole the 2000 election, non-superstar artists could still scrape together a living and aspire to a career within the bounds of the music business. Since then, struggling artists have struggled a lot more-- and it's getting worse... much, much worse.

Recently, Jay Z, very much a non-struggling superstar, got some of his non-struggling superstar peers together in a new venture: Tidal, a music streaming service owned by "the artists." And the early claims were that the streaming service would pay artists much better and more equitably than the current system, which works well enough for superstars but screws over-- in an existential sense-- all non-superstars. Jay Z's new artist-owned scheme includes Kanye West (or at least did when it started), Madonna, Nicky Minaj, Beyoncé, Usher, Jack White, Daft Punk, Rihanna. Although Tidal was launched in October 2014, Jay Z bought it 3 months later for $56 million and relaunched it last March, promising better compensation for artists than the current models (Spotify, Pandora, etc.), which pay artists pennies per stream. While Entertainment Weekly was shy about coming "to the defense of a billionaire cabal (the members of which should dry their tears with their gold doubloons)," they point out that the attacks on Tidal are mildly unfair.

It was always going to be a niche product, as the biggest draw is the ability to stream hi-def tracks that are near-CD quality. That privilege will cost the consumer twice as much as a Spotify account (though you can still pay Tidal the industry-standard $9.99 a month for lesser-quality tracks), something that not a whole lot of people are willing to do. Despite the insistence by folks like Neil Young that we’ve been listening to music all wrong for most of the 21st century, only a very small segment of the population cares about sonic fidelity enough to fork over absurd gobs of money for what amounts to a slightly better digital experience. (As many have noted, those who truly care about high-quality sound just go ahead and opt for vinyl.)

So much of the conversation around streaming services is about payment to artists, and the Internet is choked with stories from musicians who have made next-to-nothing despite heavy streaming volume through various services. One of Tidal’s selling points was that it would be better for artists, and they would be sending a greater slice of the economic pie back to the creators.

But conversations about payment always miss the central point: In the overwhelming number of cases, artists are not hamstrung and penniless because of streaming services, but instead remain victims of label agreements and publishing deals. In most cases, payout rates are set by the labels based on contracts with individual artists, so any economic-based anger should be levied at the labels making the deals with Spotify or Tidal, not the services who are merely taking advantage of a broken system.

The busted nature of the music business is why the success or failure of Tidal is meaningless, because streaming is not the answer and will not fix anything. When it debuted, Spotify was treated as the ideal compromise between musicians who wanted to be compensated for their work and an audience who had mostly had access to a massive swath of pop music for well below retail rates. Here was a service that charged only a few bucks (or your attention for some ads), and in exchange you had consistent access to a huge catalog of songs (with some gigantic gaps, of course). Money would be doled out based on some sort of merit-based system, where streaming volume would equal big money for artists—or at least more than they would be making if their stuff was merely uploaded to YouTube or torrented illegally.

But streaming is simply another extension of a music industry that has been fundamentally resistant to change even as the walls continue to collapse around it. Even the benefit-sharing model Tidal presented is something of a misnomer. “For the vast majority of the artists who participate in all-in streaming in the interactive universe, any benefit would probably amount to a rounding error,” explains Casey Rae, the CEO of the Future of Music Coalition, an advocacy group for musicians that has been keeping close watch on streaming issues. “Unless you fundamentally change the division of revenue and how that’s allocated, then you’re not going to have a real perceptible change in the economics for the vast middle category of creators.”

Translation: Streaming will never be profitable for the vast majority of artists, no matter what Jay Z is selling. Unless the whole system is re-invented from the ground up, streaming is merely a minor salve, a distraction to keep us busy until the next great evolutionary leap is made in the music business. Until then, I’ll just keep buying cassettes.

Reminder: In 1919 United Artists was launched by 4 of Hollywood's biggest stars, Mary Pickford, Charlie Chaplin, Douglas Fairbanks, and D. W. Griffith. They wanted more artistic and economic control, control that Hollywood producers and studios were usurping. Decades later, Frank Sinatra launched Reprise Records-- of which I later became president-- as an artist-owned label that was meant to protect artists' interests. Again "artists" meant a few BIG artist-moguls. Neither U.A. nor Reprise turned out as idealistic as they were painted... exactly what seems to be happening at Tidal today.



Perhaps Jay Z and his posse should try another approach. Singer-songwriter Elliot Astur isn't thinking about more millions for himself-- but for a living wage, peace and decent healthcare for his countrymen:

Sometimes a little revolution
Is the only way to set things right
Sometimes a broken institution
Leaves a public burned enough to fight