According to multiple sources, at the heart of the issue is money West’s team claims Tidal owes him for marketing efforts, including video production, as well as a bonus for subscriber thresholds met as was agreed upon ahead of the release of West’s February 2016 album, “The Life of Pablo.” (The service saw a reported 1.5 million-subscriber bump in the wake of the “Pablo” release.)
As first reported by TMZ, and verified by Variety, West’s attorneys have fired off letters demanding payment, which, so far, has not been honored. “Notice has been given that [West] considers the exclusivity deal terminated,” says an insider familiar with the situation, who likens the amount owed — believed to be $3 million — to “chump change” when one considers the reported $200 million infusion Tidal recently got from Sprint for a third of the company. (Tidal, which was launched in March 2015 with a star-studded event in New York City, aims to obtain a billion-dollar valuation, and currently claims a $600 million valuation.)
Indeed, it is that very partnership that has some of Tidal’s artist-owners flummoxed. “The Sprint capitalization is a major infusion, is [Tidal] just burning money?” asks the source.
Another insider describes Tidal’s deal structure as “two-tiered,” where the A-listers, in exchange for exclusivity, are promised an amount equaling “millions of dollars,” which is paid to the artist directly for marketing and other costs. Says a rep for one tier-B artist: “That contract is very clear. And if Kanye’s not getting his money, who is?” However, another source close to the situation insists Tidal does not “advance” money.
“Tidal’s willingness to spar with an artist purportedly responsible for attracting 1.5 million new subscribers is perplexing,” offers James Sammataro, national head of Miami-based entertainment practice Stroock & Stroock & Lavan, which is not involved with either party. “Given all of the negativity surrounding Tidal from accusations of inflated subscriber numbers, a turnstile of CEOs, and recent dismay with ‘4:44’s’ release strategy — even Snoop Dogg elected publicly for a pirated copy of ‘4:44′ rather than subscribe — a lawsuit over a $3 million debt does not seem to be worth the fight.”
Making the matter even more perplexing is the fact that Carter and West have had a long friendship, though that relationship seems more frayed recently following perceived digs by West (at a November 2016 concert in Sacramento) and by Carter on the just-released Jay-Z album “4:44.”
Another player in this dust-up — albeit in the background — is the major label. As companies like Universal Music Group increasingly back away from exclusives — like Apple Music’s partnership with Chance the Rapper for his 2016 album “The Coloring Book,” for which the rapper revealed he was paid $500,000 for a two-week exclusive window — West’s stance sends a strong message. Adds Sammataro: “Kanye’s proclamation against exclusives is music to the record labels’ ears. It’s one thing for [UMG chairman] Lucian Grainge to speak out against them, as it is in the label’s best interests to strip streaming services of exclusives, but quite another for an artist of Kanye’s acclaim to join in the chorus that single service sequestration is bad for the music industry. It lets the labels off the hook, as exclusive releases were placing a tremendous strain on the label-artist relationship.”
According to TMZ, if West takes his next album — a release date is not yet known, and unlikely to be imminent, though the rapper is continually working on new music — to another streaming service, Tidal will sue. Reps for Tidal, Carter, and West have not responded to requests for comment.
As for what happens next? Says a source: “Pay up or let [Kanye] go.”