Making That Money
Bloomberg Businessweek|April 26 - May 03, 2021 (Double Issue)
For music executives like Kevin Liles, of the hip-hop label 300 Entertainment, the pandemic has mostly made a good life better. A lot of musicians, however, are experiencing something different
Devin Leonard

Since the pandemic began, Kevin Liles has been running his New York record label, 300 Entertainment, from the patio by the swimming pool at his home in suburban Cresskill, N.J. Early one afternoon in January he’s there, smoking a cigar and conducting a staff meeting on Zoom. He doesn’t seem to notice that it’s started to snow. Sitting at a table near a blazing open-air fireplace, clad in a red hoodie and a green beanie with a pompom, Liles pelts his employees with questions about the performance of a potential hit, Play w/ me, by Bailey Bryan, a country singer turned edgy pop chanteuse. She’s scheduled to perform it on The Late Show with Stephen Colbert’s YouTube channel. Liles wants his promotions people to flog the tune harder to keep the streams coming.

Then Liles has what he later describes as a moment of divine inspiration. He tells his people that during this time of Covid-19, protests against police brutality, and the storming of the Capitol by Trump-inspired goons, they should reach out to one another and make sure nobody is having mental health issues. Ending on that note, he hurries upstairs to grab something in his home office, a large space with pictures of himself with Oprah Winfrey, Bill Gates, and Barack Obama. As he walks he starts another call, with his chief financial officer. “When God talks to me, I gotta say something!” Liles tells his CFO.

He heads out the front door and climbs into his black SUV with his assistant, Keely Higgins, and driver, Willie Melendez. The 53-year-old Liles, who has a shaved head and a toothy smile and operates within a zone of can-doism, settles into a seat behind them. He produces a tin of cinnamon Altoids and begins munching several at a time. “I just did this speech to the staff, and I probably got 20 texts right now,” he says, gazing at his phone. “I’ll read them to you. ‘I just gotta say it. You’re talking to us!’ ‘Thank you for saying this!’ ‘Amen!’ ‘Appreciate you!’ ‘Great talk!’ ” Liles chuckles. This is someone who says his company can be “cultish” at times— hopefully in a good way, he adds.

For all of its unsettling moments, the past year has been pretty good for record company executives such as Liles. They were distressed early on in the pandemic when streaming consumption dipped. Then they watched, slack-jawed perhaps, as it jetted upward. Spotify Technology SA, the world’s largest paid streaming music service, ended the year with 345 million monthly users, a 27% increase from 2019. Apple Music, the No. 2 service, saw its subscribers climb to 79 million, 32% more than the year before, according to Bloomberg Intelligence. That would have been an excuse for record labels to throw parties, if parties had been permitted. Last year, Spotify paid $5 billion to music rights holders, almost 80% of which went to record labels. Morgan Stanley estimates that global consumer spending on streaming music rose to $19 billion, an 18% gain. “Music is on fire!” says Daniel Glass, founder of Glassnote Records, another respected New York-based label.

That definitely includes 300 Entertainment. One of the label’s biggest hip-hop stars, Young Thug, had 16 songs last year in the Billboard Hot 100. One of Young Thug’s protégés, Gunna, had his first No. 1 album, Wunna. In November, 300 released Good News, the debut album by proudly licentious rapper Megan Thee Stallion. She was nominated for four Grammy Awards and won three at the ceremony in March. As the holidays approached, Billboard magazine named Liles R&B/hip-hop executive of the year.

Liles also had to minister to the 300 hitmakers who were suffering financially because they were unable to tour. He’s off to see one of them now: the New Jersey rapper Fetty Wap, who put 300 on the map with his 2015 hit Trap Queen, a drug dealer’s ode to his beloved. It remains 300’s biggest seller, having been certified by the Recording Industry Association of America as a diamond record in late 2019. (A diamond record used to be one that had sold 10 million copies. Because most music, including almost all of 300’s music, is streamed, the RIAA employs a formula whereby each 150 streams counts as a unit sold. So Trap Queen is likely to have been streamed as many as 1.5 billion times.) Liles wants to belatedly celebrate this milestone by paying Fetty Wap a visit at his recording studio and surprising him with an enormous plaque. “I’ll call it another therapy session,” he says. “You know what I mean? But in reality, it’s also one for me.”

I started spending time with Liles in the last weeks before the pandemic, in February 2020. I’d been assigned to do a story about what it was like to be a record label executive now that the industry was once again booming, thanks to streaming, which the RIAA says accounted for 83% of last year’s U.S. music sales. This uptick followed a decline that started in 2000, around the time listeners figured out how to rip CDs on their computers and share the music for free on the internet. It wasn’t until 2016 that the industry began to thrive again.

I wanted to find a survivor, and Liles was certainly one. He started out in 1991 as an intern at Def Jam Recordings, the seminal hip-hop label, in the early days of the CD boom. He was promoted to mid-Atlantic manager two years later, riding tour buses with persistently baked stars such as Method Man and Redman, getting them to radio interviews and concert stages as close to schedule as possible. He ingratiated himself not only to radio and TV programmers but also to proprietors of restaurants, barbershops, and nail salons, the sorts of people who could be counted on to play Def Jam’s records and post its flyers. “He had every relationship,” says Julie Greenwald, a former Def Jam executive and now chairman of the Atlantic Records Group. By 1998, Liles was president of Def Jam.

In 2004, after being passed up for the CEO job, Liles left to become an executive vice president for the Warner Music Group. But it wasn’t as much fun. By then the industry was in a tailspin that seemed irreversible. After five years, he left to start a management company catering to musical artists and others, including Nascar driver Darrell “Bubba” Wallace and a Victoria’s Secret model. “I thought I was done with music,” Liles says.

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