Tidal's Uphill Battle: Top Exec Speaks Out on "Unfair" Media and Who Really Wants It Dead

Tidal executive Vania Schlogel says the platform isn't about the rich getting richer; it's about nurturing struggling artists. She also explains the truth behind Jay Z's tweets and tackles Apple rumors head on: is the tech giant really trying to sabotage Jay Z's baby?

Tidal has heard everything. They've read the reports. They know Mumford & Sons, Death Cab for Cutie and Lily Allen have all had less-than-stellar things to say about the company. They're all too aware of the PR firestorm.

But in an interview with The Hollywood Reporter, Tidal's chief investment officer Vania Schlogel (below) says the nascent streaming company is embracing the criticisms as part of upsetting the status quo — of growing up.

This is the spirit, apparently, that drove Jay Z to Twitter Sunday, half to vent and half to provide some clarity amid increasingly cantankerous media chatter. Enough was enough. Jay wanted to take control of the conversation, in part anyway, before it got out of hand. "It was off the cuff," Schlogel tells THR. "It was genuinely not something two weeks before that was like, 'Hey, why don’t we plan this out and vet the shit out of it?' It wasn’t like that at all."

"With people who have large followings," Schlogel says, "there’s this natural skepticism on how vetted this is or not. The whole point of Tidal is that artists have an authentic voice and can genuinely be themselves. This was genuinely that — it was not some vetted process. Not at all ... It really was Jay speaking ... Jay's human."

"Stream of consciousness coming in 5, 4, 3, 2 ..." Jay Z wrote on Twitter, moments before unleashing a flurry of frustrated tweets about the state of his company, the media backlash and some painful misconceptions. His tone was equal parts defensive, earnest and humble.

The loudest message from Jay Z's polemic: "Tidal is doing just fine." The real message, embedded in the onslaught: "We are human."

What was arguably a well-intentioned broadside fell on hardened hearts: Jay Z's tweets only riled the masses. In the week's since Tidal's bombastic March 30th unveiling, the new streaming platform has become a fashionable target for Internet haters, and critics shredded Jay's tweets (and his hashtag #TidalFacts) like piranha.

#jayz tweets like once every 3 months. Starts a failing music service and now he's like a 14 y/o girl who discovered Twitter. #TidalFacts — jason shaltz (@JShaltz) April 26, 2015

That rollout campaign was obnoxious. I'm not finna believe in no board meeting where two dudes are dressed as robots. #TidalFacts — Rusty Redenbacher (@rustymk2) April 26, 2015

Media outlets joined the feeding frenzy, publishing point-by-point takedowns of Jay Z's tweets, labeling some misleading and others outright lies. Reporters harped on Tidal falling out of the top rankings on Apple's app store — which, Schlogel explains, is primarily the result of Tidal not having a free option.

This is what happens, she says, when widespread misconceptions about a company take root. And Tidal's early PR mistakes surrounding its star-studded public debut didn't help: Tidal was widely criticized as "tone deaf" when it used sixteen multimillionaire musicians — stakeholders in the company — to talk about how the music industry isn't sustainable.

"Everything that has been done to date has come from a place of authenticity," she explains, "but we recognize that we’re not perfect at PR. We’re not perfect at having a polished message. We’re still young enough, small enough, maybe even naive enough to think that authentic voice would have come through by now."

Looking back, Schlogel believes the event omitted a key part of the company's message: that finding, nurturing and developing emerging artists is the primary focus — not lining Daft Punk's pockets.

"The one thing I did not expect or foresee was that if we didn’t tell all the details, people would come in and speculate and tell the story for us," Schlogel says. "I think we [should] have said from day one: by the way, these are the programs we’re going to announce. At the time we thought it would be good to have that be its own separate event and then as these different initiatives got rolled out, they’d be their own entities."

The programs Schlogel is referring to are Tidal Rising, Tidal Discovery and Tidal X: the company's three-pronged initiative to give struggling artists a leg-up that no other streaming platform offers.

Tidal X is, in Schlogel's words, "experiences that the artist wants to give fans." This could be a private concert with Jack White in North Dakota that's also live streamed to his fans around the country (this happened). It could be an intimate 500-person J.Cole show, the tickets for which are exclusively distributed to local Tidal subscribers (this also happened). Or most importantly, it could be a showcase tailored to promoting new talent alongside more marquee names.

Tidal Rising, another program, is the embodiment of this pro-artist philosophy. According to Schlogel, Tidal Rising "helps put a spotlight on indie and emerging artists." This includes spending Tidal's own production dollars to create Tidal X events to showcase this new talent, and Tidal's own marketing dollars to publicize it.

"It’s actually, in a more holistic way, supporting indie and emerging artists," Schlogel says. "That’s what Tidal Rising is. So it can actually take the form of a lot of different things — maybe a mentorship with an established artist."

Tidal Discovery is the process by which emerging artists enter the fray by uploading their own music to the platform, much like Soundcloud or Bandcamp , but with the incubative Tidal Rising program built in.

This is the Tidal, Schlogel believes, that should have been promoted from the beginning. The excessive intrigue, the pomp and circumstance all drew away from the real focus of the company: to discover and hone new talent.

“It’s their voices that really matter in this," Schlogel says, referring to emerging artists. "If their voices aren’t in positive support of this, then we have failed. I genuinely mean that."

That said, Schlogel still defends the choice to include the celebrity faces that caused the sprawling media backlash to begin with — and not just because of the exposure they bring.

"These artists have come on to a platform to bruising criticism that is very unfair and inaccurate," Schlogel says. "Claims in the media that they’re just trying to get wealthy — which is counterintuitive because there are much easier ways of being at that stature and monetizing a repertoire — they’ve done this all around the mission statement of creating a sustainable industry, bringing it back to sustainability."

Not for themselves, Schlogel insists, but for people like Schlogel's little brother, a struggling songwriter who questions a future in an industry where most talent struggles to pay rent with their work. Tidal wants to attract, capture and "appropriately compensate" as much burgeoning talent in the music industry as possible.

"Tidal pays a 75% royalty rate to ALL artists, writers and producers," Jay Z wrote. There was some confusion on the Internet about whether "royalty rate" was a percentage of Tidal's total revenue. According to Schlogel, it is. The industry standard royalty rate, she says, is 70% (roughly 60% to record labels, roughly 10% to artists via publishers). Tidal pays 62.5% and 12.5% (which equals the 75% Jay Z is referring to).

Despite the noble aspirations, Tidal will continue to face an uphill battle. If not on the media front, then on the industry front.

"There are many big companies that are spending millions on a smear campaign," Jay Z wrote, without referencing which companies. Rumors circulated that Jay was primarily talking about Apple, which has reportedly engaged in nefarious tactics against Tidal to gain a competitive edge before the computer giant re-launches its own streaming service Beats Music in June.

"Without commenting on specifics," Schlogel said, "any time music helps drive sales of something that is wildly profitable and carries a huge gross profit margin, that is a very strong incentive to continue on the path of using music as a loss leader." That "something" could very well be a product like Beats headphones.

Shortly after Jay Z unloaded on Twitter, Reddit user Zip2kx posted the following highly upvoted comment: “Guys listen, they had a terrible launch. That press conference was terrible and someone at the PR department should have raised a flag. But the truth is, it's so early to judge this. They JUST got their new CEO, they are moving offices and staff and they haven't even started any marketing. No company is made or broken in the first 2 months ... What Jay has done is combined Spotify, iTunes, Shazam, blogs, radio, MTV into one product. That's what he's going to sell, not a streaming service.”

Reddit user Swamp85 shot back, "Most people understand this. They just want to shit on Tidal anyway."

Regardless, Schlogel insists Tidal will continue to grow. "Our actions will speak louder than words," she says. "Through time."