Norwegian newspaper, Dagens Næringsliv (DN), has released an explosive investigative report containing damning allegations about the business practices at TIDAL, the streaming service owned by Jay-Z. The paper obtained a hard drive alleged to contain internal streaming data from TIDAL. According to DN’s report, an examination of its contents revealed the data had been manipulated to inflate the streams of Beyoncé’s Lemonade and Kanye West’s The Life of Pablo by a combined 320 million plays. Both of these projects were exclusive to TIDAL at the time of their releases in 2016 — a huge coup for the fledgling company.
If true — TIDAL has maintained they are not — these allegations will land Jay-Z and TIDAL in extremely hot water. If the company did fraudulently allocate additional streams to the wife and then-close friend of the owner of the company, TIDAL would have unjustly enriched them and deprived other artists of their fair share. The accusations follow claims of inflated subscriber numbers and further darken the cloud of suspicion over TIDAL’s stats.
The record business has always been dirty. Everyone jukes the stats. So I’m not surprised there was some finessing of the numbers. I was, however, taken aback by the allegation that not only had TIDAL gone into subscribers’ accounts to fiddle with their play counts, but that the numbers were manipulated in ways that didn’t make sense and would immediately raise red flags (e.g., multiple streams playing at the same time, streams repeating after time intervals that were always multiples of six, albums being played all day and through the night for days in a row). It’s outlandishly corrupt behavior, but it’s easy to understand why TIDAL would have done this:
Streaming music doesn’t pay.
This is why I was surprised Jay-Z tossed his hat into the ring after a decade of watching Spotify fail to turn a profit. As A&R legend, Jimmy Iovine, has sagely pointed out, Apple and Amazon have other incredibly profitable sources of revenue to subsidize their music streaming services while they try to crack the code of monetizing music in the 21st century. Gathering a huge audience and holding on to it is valuable, if you can afford to eat the cost. Jay-Z can’t. He needs TIDAL to be a financial success. Getting two of the biggest stars on the planet to be exclusive to TIDAL and coming out the other side with huge numbers was the master plan, but it would appear they didn’t have the subscriber base to pull it off.
Jay-Z’s reputation as an astute entrepreneur has propelled him into a different realm of celebrity. He’s not just a rapper; he’s a mogul. Or in his words: he’s not a businessman; he’s a business, man. TIDAL’s struggles are shining an uncomfortably bright light on this aspect of the lore surrounding him. The inevitable question is: How much of Jay-Z’s success as an entrepreneur is smoke and mirrors?
Hip-hop is about hustling and faking it ’til you make it. Entrepreneurship undergirds the culture, as does flaunting your success through conspicuous consumption and over-the-top displays of wealth. Hip-hop has evolved from talking about street-level drug deals and buying rope chains to discussing real estate investments, purchasing high-brow art, and travel by private jet. The culture has always been about “getting money,” but along the way, hip-hop became hyper-capitalist. In this way, it may be the most quintessentially American art form.
It’s arguable that Jay-Z has personified the maturation of hip-hop better than any of his peers. Dr. Dre is too reclusive to wear the crown, and Diddy is too clownish. Jay-Z walks the line between mysterious money man and cool pitch guy better than anyone. And his rise from the Marcy Projects is exactly the kind of rags-to-riches story America loves. He’s built himself into the perfect ambassador for hip-hop and postmodern American capitalism.
What happens to Jay-Z, what happens to hip-hop, if capitalism isn’t cool anymore?