Lyor Cohen's 300 And The Dawn Of The Moneyball Record Label

Feb 28 2014, 2:37pm CST | by

From beneath the brim of a black Oakland Raiders cap, rapper Raz Simone is making the most of what might be the biggest moment of his young career. He’s excitedly addressing two dozen reporters and executives who’ve crammed into the small, wood-paneled room at Terminus Studios in midtown Manhattan, explaining the work that went into Cognitive Dissonance, the album he’s set to release on March 6th.

The audience includes Simone’s new bosses—Lyor Cohen, Kevin Liles and Todd Moscowitz—whose resumes include lengthy stints as leaders at legendary outfits from Def Jam to Warner Music Group. They’re paying extra-close attention to the 24-year-old Seattle native because he’s the first rapper signed to their new label, 300.

“Being able to sit at a table with them and not have them talk down to me … is great,” says Simone. “They’re not stopping anything I want to do, they’re not stopping the creative flow. I always thought it was weird when labels get a hold of somebody and [change them].”

Indeed, Raz (born Solomon Simone) is not an artist that needs to be built up from scratch. Though he’s far from Cash King status, he has already created his own independent label, Black Umbrella, and cultivated an audience big enough to send a handful of his YouTube videos past the 50,000 views mark.

That’s music to the ears of Cohen, Liles and Moscowitz, who founded 300 with the goal of creating a record label for the 21st Century, a nimble outfit capable of launching self-starting artists to the next level without the burdensome bureaucracy–and cost structure–of a major record company. They picked a name with roots in Ancient Greece and a message powerful enough to carry through to the modern motion pictures of the same name.

“300, to me,” Cohen explained at a recent panel discussion, “simply represents a period of time where, if you’re well coordinated and synchronized, and you have a deep common bond—and our common bond is music—that we could, with a very small force, actually do an extremely competent job.”

Cohen’s approach is indicative of a larger trend that seems to be emerging in the modern music business, one that FORBES dubbed “Moneyball for Music” in a magazine story on startup Next Big Sound last year. The analytics outfit, founded by 30 Under 30 honoree Alex White, was among the first pique the industry’s interest in predictive data.

Next Big Sound, which has poached quantitative minds from Apple, Microsoft, the NSA, the New York Yankees and others, can predict album sales within 20% accuracy for 85% of artists based on metrics involving social media growth and streaming spins. That takes a lot of the guesswork out of the $4.5 billion artist discovery-and-development industry.

“Data has transformed industries before,” White told FORBES last year. “Music’s the next one.”

If White is the Bill James of music, Cohen and his cofounders—and rivals—are aiming to become the Billy Beanes. And much like the baseball world, one of the major challenges is changing outdated beliefs that have long dominated the business.

Just as veteran scouts have been increasingly ditching statistics like wins and home runs in favor of spacey-sounding ones like BABIP, VORP and FIP, music executives who’ve long relied on their “golden ears” must now acknowledge the importance of, say, the velocity of growth in an up-and-coming act’s Wikipedia pageviews or Facebook likes.

To that end, Cohen announced a partnership with Twitter earlier this month that will allow 300 full access to the company’s data—including information that’s not available to the public, such as tags that reveal the location from which a tweet was sent.

“Our whole desire is to find talent and help shepherd them along, and bring them to the world in a highly respectful and very powerful way,” says Cohen. “And we feel that in this digital world, that you can do it with significantly fewer people.”

Cohen, Liles and Moscowitz will have plenty of competition in their bid to create a new generation music label. The majors are wising up to the importance of predictive data; Next Big Sound has deals with many of the big labels, while similar outfits such as Musicmetric and Gracenote are also popular.

Warner Music Group, which Cohen helmed until 2012, recently announced a partnership with Shazam to develop a label jointly branded with the music discovery app. The two sides will split revenue from signees discovered through Shazam.

“By partnering with Shazam, a brand synonymous with music discovery for fans, we have forged a potent proposition—the first crowd-sourced, big data record label,” said Rob Wiesenthal, Warner’s chief operating officer, of the deal.

As for Cohen and his compatriots at 300, they’ll be leaning heavily on data, but they won’t be entirely abandoning their instincts.

“It’s going to always be our gut first once you get that information,” says Liles. “I would say 20% information, 80% what we do every single day. Because no piece of technology could ever find it, nurture it, bring it to market [and] also know when to say ‘no.’”

Fortunately for Raz Simone, Cohen, Moscowitz and Liles’ guts—and their data—led them to say “yes.”

For more on the business of hip-hop, check out my book Empire State of Mind: How Jay-Z Went From Street Corner to Corner Office. My next one, Michael Jackson, Inc, will be published on June 3rd. You can also follow me on Twitter and Facebook.

The World's Highest-Paid Musicians 2013

Source: Forbes Business


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