Lyor Cohen has been a pioneer in the music industry for over 30 years. Seeing the potential in the burgeoning hip-hop and rap music scenes of the 1980s, Lyor began mentoring and managing artists. He was able to build on his success to join Def Jam Records and then head up Warner Music. Hip Hop sales hit a billion dollars in 2003 but since then the music industry has been in freefall due to the internet allowing people to enjoy music for free through steaming and piracy. Farnoosh Torabi wants to spend time following Lyor to understand how this music leader is still hoping to find success in an industry with a business model that has completely changed.
Meeting with Lyor at 300 Entertainment Headquarters – Lyor’s new studio – which even has Google as an investor – Farnoosh is surprised to learn that Lyor doesn’t have a private office. While his other executives have their own offices, Lyor prefers to sit in the office pit with his staff. This helps Farnoosh understand Lyor because he realizes that in order to stay in touch with his audience he has to work in the trenches to remain relevant.
Discussing the industry’s financial health with Farnoosh, Lyor explains even though his business partners told him not to even try creating a new music studio he’s not afraid to pursue his passion. For Farnoosh, she sees this as an example of why leaders need to be fearless and unwavering when it comes to their vision.
300 Entertainment is also structured in such a way Lyor and his team can find and sign artists faster than other companies. According to Lyor, by the time another label may have signed a single person, 300 Entertainment would have already signed five new artists. To find new talent 300 Entertainment has developed proprietary software called Dashboard which scans the internet to find unsigned artists that are gaining a large following. So while others in the music industry avoid new technology, Lyor is embracing digital media because he knows that all leaders need to evolve and learn to use new tools as they develop.
Lyor takes Farnoosh to SiriusXM Studios to watch him prep a new artist, Young Thug, for an interview. Farnoosh points out that while other music executives would have put a junior associate in charge, Lyor takes a hands-on approach to mentoring musicians. Lyor knows in order for musicians to become stars they need to be able to reach their fans through interviews. Though Young Thug struggled at the beginning of the interview he soon gets comfortable with the dynamic. Once Lyor sees that Young Thug will be able to handle the rest of the interview by himself, Lyor leaves.
Since Lyor helped with the production of Aerosmith’s and Run-D.M.C.’s song, “Walk This Way,” he understands the benefit of pairing musicians from different genres. Currently, he is working on a song that has rappers Young Thug and Fetty Wap, and he hopes he will be able to include the vocals of Conrad Sewell – a new artist from Australia who is in the pop and soul genre. However, Lyor has added Conrad to a Fetty Wap and Young Thug track without telling them. Lyor wants to run the song by Young Thug for his permission to keep Conrad on the track.
Lyor explains it is hard to help an artist become a success and he has to do everything possible to help his musicians. Farnoosh sees this as an example as Lyor being willing to maximize all of his assets and opportunity to help young artists get their breaks. This means that a large part of Lyor’s job is to get people on board with his ideas.
Another idea is to convince Young Thug to do more promotional work. While Young Thug is reluctant about this idea, Lyor explains Young Thug’s fans want more of him and interviews are the best way to accomplish this. Young Thug expresses that he wants to have 10 number one singles. Lyor tells him in order to do this Young Thug needs to focus on his songs by coming back to them and developing choruses. In other words, Young Thug needs to be more disciplined when it comes to music production. Overall, managing musicians means dealing with big egos and it is a skill he has mastered over the decades.
To maximize profit from the music he produces Lyor also turns to every revenue stream available. This includes working with Spotify. Talking to Spotify’s team, Lyor and Young Thug learns a lot of listeners are saving Young Thug’s music.. Farnoosh also learns a watershed moment for Spotify artists is when they break into Spotify’s charts. Lyor explains if a song makes it into Spotify’s charts it will have a long royalty tail.
Though Lyor is positive about the role of Spotify in today’s music industry, Farnoosh acknowledges artists don’t make much money off of streaming services unless they and/or their label work to get their songs highlighted by Spotify. Spotify only pays a half cent in royalties for every song streamed. Given that Young Thug’s song “Check” has has 21 million streams to date on Spotify; the song has only generated around $100,000. Though this doesn’t seem like a lot, Young Thug has produced several songs that have high streaming numbers. When this revenue is added to other streaming services and other profits from other artists, it becomes clear how 300 Entertainment can become successful.
Visiting YouTube’s New York offices, Lyor talks to the company about the data they collect about Young Thug’s fanbase. While YouTube pays less in royalties than Spotify, Lyor finds the user data to be invaluable. Farnoosh learns YouTube can geo-locate its users and Young Thug’s fans. This information allows them to pinpoint Young Thug’s fan base so that they can better plan tours – which are now more important to a company’s bottom line.
Lyor still wants Young Thug’s permission to include Conrad Sewell’s vocals on his song. Though Young Thug wants his vocals to be on top, he gives Lyor permission to include Conrad.
After spending time with Lyor, Farnoosh understands why he would start a new label in a financially challenged industry. Lyor sees change as a means to find opportunity. He is able to find new talent and his company is nimble enough to sign them before anyone else can. Lyor uses analytics to find where his fans are so that they can maximize music tours. He treats his team like family and gets them to collaborate like family for the greater good of the company. Most importantly, Lyor Cohen is willing to disregard the past to look ahead.