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Tidal, the streaming service launched by rap mogul Jay Z this past March, has hired veteran digital music executive Jeff Toig to fill the Chief Executive Officer that's been open since the summer. With Toig Tidal gets an executive who knows a thing or two about building young businesses. Before he was SoundCloud's Chief Business Officer, Toig was a founder and svp at Muve Music, Cricket Wireless's innovative music service, and was on the Virgin Mobile USA founding team. Jay Z, who bought Tidal in March, calls him "a leader at the intersection of consumer technology and entertainment for more than two decades."
The hire should also bring some stability after considerable turnover this year. Since its (oft-criticized) big reveal, Tidal has gone through two CEOs -- Andy Chen and interim CEO Peter Tonstad -- as well as Chief Investment Officer Vania Schlogel and svp of artist and label relations Zena Burns. (Jay Z's Roc Nation has also lost executives, including chief marketing officer Jeff Geisler.) Adding to the bad optics have been persistent rumors that Jay Z is looking to sell the company or partner with another service -- scenarios that seem unlikely with Toig's hire.
In a conversation with Billboard, Toig talked about why he agreed to join Tidal, why he's optimistic about the service's future and Jay Z's long-term vision for the company.
Other than there being a limited number of these jobs available in the world, what prompted you to take the job?
In terms of why I decided to take it, for me there were really three main reasons. At a high level, this was a great opportunity to do something differentiated here. Jay Z and the artist-owners are deeply committed to Tidal and the vision they have for the business.
Let me break each of those down. As I evaluated the business and the opportunity, Tidal has a really unique set of assets. It has exclusive content, deep connection with the artists -- A-list artists -- live events like Tidal X, and a unique set of assets. It's early in the game, but the seeds have been planted and it creates a really fascinating foundation.
Second, through the interview process I was fortunate to spend quite a lot of time with Jay Z, learning more about his vision for Tidal and why he made such a significant investment in this business. It became clear to me that Jay and the artists behind the company are deeply committed to developing an amazing music experience for fans. I share a belief that this has been lost with many services, and it will be critical as we build Tidal into a leader in this space.
The third thing is the momentum. The company just launched six, seven months ago and it's already grown to over a million subscribers. When you see a business like this gaining that kind of momentum, you start to think there's something quite interesting happening. I've seen this before, and I'm intrigued by the growth and the potential the business has.
You mentioned things like exclusive content and events. Where do you think factors like exclusive content and events come to play versus just the product itself and the user experience? Do you think anything needs to change about the product, or is that not something you come into the company looking to do?
As a foundation, there's a really interesting product there. The service itself includes music, videos, exclusive content, as you mentioned there's a live show component. And that's really interesting. Because you've got exclusives from A-list artists, you have the Tidal Rising artists the company is finding and helping to promote. There's a core consumer experience that's powerful and really compelling. And, on top of it, you have events that really bring music and the connection fans have with artists to life. There are these really interesting connected components of the experience Tidal is trying to present to fans that look different from what other services do because of the artists who are involved in building this business.
When I see the exclusive content and the artists that are most popular on Tidal -- and a good number of the artist-owners -- there's a lot of hip-hop and R&B in there. Do you think that's Tidal's best shot, to go after that market? Do you want to own hip-hop and R&B ,or do you want to branch out and get fans of all different types of genres?
I think practically, if you look at the service, there are a lot of urban artists involved. There are also other owners. Coldplay is involved in the business and gave a really amazing live stream on the service. There are EDM artists doing some interesting things. It's not just an urban focus. In terms of positioning the business moving forward, I don't start until January 4th. I need to get in there, learn more about the business, figure out the best next steps for the company, help shape the strategy of the business... and I'm not sure exactly what that's going to look like.
When you sat down and talked to Jay Z about the job and he hired you, did you two come up with first orders of business, like, "Here's X, Y, Z we want to do first"?
Not yet. I think we have an alignment on how we start to shape something that connects fans with the artists they love in new ways, and do something that's unique and differentiated and doesn't look like other services out there. [Something] that leverages the creativity the artist-owners bring to the business that find their way into the service.
Since Tidal re-launched in March, you now have Apple Music, YouTube Red, Pandora announcing plans to launch a subscription service. What do you think of the market? Do you think it's growing at a good enough rate for all services they get, or do you think everybody's just grabbing share right now? A little of both?
This is my view: There's clearly momentum building around subscription music services generally. The concept is gaining traction with consumers because you have a number of really meaningful companies that are in this space, and that puts a lot of focus and attention on a new idea. I don't think any of us were sure, five years ago, that this business concept would take hold -- but it's taking hold.
If you look at subscription models generally, subscription-based business models make for attractive companies. Video subscription services like Netflix, wireless carriers like Verizon and cable companies like Comcast, they all demonstrate that subscription models with recurring revenues are attractive businesses. We can create music subscription businesses that are also viable and attractive.
Tidal is interesting in that it has the standard price and a higher-priced service for higher-quality audio. But it doesn't have free, or something at a lower price tier -- that's a place where Muve Music had some success. Do you think that needs to be addressed or can be addressed? Or do you think services like Tidal are going to go after the $9.99 consumer and the $19.99 consumer for the time being?
I don't know yet. Until I get into the business and can roll up my sleeves with my team, I don't know exactly how we're going to [determine] the best opportunities for us to chase. I've looked at hi-fi technologies and the impact that's had on the industry. There's something happening there, too. Of [Tidal's] million-plus subscribers, nearly half of them are on the hi-fi offering.
The feeling I get from the music industry about Tidal has been both uncertainty and optimism. What's your message going to be to the music business, when you step in and start talking with them in January?
I think first and foremost we're aligned with major labels and publishers. We're trying to do something that forwards their interests, something that's going to help the artists, the writers and the creative community. We're deeply committed to this business and we're focused on building a scaled, sustainable, successful business that's going to be here for a long time.
The subscription service marketplace is expanding and its consolidating a bit at the same time. Did you have any conversations with Jay Z that gave you any indication of how long he's willing to put in to create the kind of service you're talking about?
I spent a lot of time with Jay during the interview process and he's an incredibly talented and visionary businessman and he is deeply committed to Tidal. This isn't a short-term play. This is a long-term investment.
