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Peter Wells: TuneCore After The Brain Drain - A Year Later, Artist Have No Voice

image from www.hollywoodreporter.comUPDATE 2 - An op-ed by Peter Wells, the co-founder of TuneCore and more recently Audiam.

What happens to a music company when the money men take over, when the songs are reduced to “widgets,” when the heart and spirit have been cut out? The company focuses solely on revenue at any expense, and they forfeit the opportunity to make the world a better place for artists. The artist is silenced. 

July 20, 2012, was a black day at TuneCore. They’d already laid me off, one of the three founders, two months before, a baffling move no one was able to explain except, “this comes from the Board of Directors.” There were more surprises to come, and on that hot July day, they let TuneCore Founder, CEO and President Jeff price go—or fired him without cause, or laid him off or who knows what. They appear to keep changing the story; the Board wasn’t clear and still isn’t.  With no interim CEO and no search plan for a replacement, they took action without even understanding their own position. It was to become a pattern that, in my opinion, works to the detriment of the artists, employees and shareholders of TuneCore.

In those days, the Board was four people: Fred Bourgoise, Marty Albertson (CEO of gear retailing giant Guitar Center who is now in a battle with its own employees over being able to earn enough money to live since Mitt Romney’s Bain Capital acquired it, Gill Cogan, (of Opus Venture, the venture capitalist “partner”), and Founder and then CEO/President Jeff Price. Soon after terminating Jeff and removing me, TuneCore’s new management appeared to immediately shift away from helping artists and creating new opportunities for them, instead focusing on harassing and threatening the original founders, advisors and employees. It’s the sort of thing you’d see in over-the-top Hollywood movies that could never be real.

The new TuneCore closed down the artist newsletter that for years ran articles written by music business insiders and professionals, educating the artist on copyright, how money flows, how to market and promote and exposing industry pitfalls. They shut down an email news list called TuneCouncil that discussed and explored the industry and engaged in thoughtful, useful conversation with subscribers. Now only did they create no new TuneCore Survival Manuals (a set of free booklets that focused purely on educating the artist on new topics), they stopped producing or handing out the old ones at events. So too went the videos image from blog.sysomos.comand podcasts. Multi-hour educational videos vanished from YouTube. TuneCore stopped speaking publicly on panels and stopped writing articles of any educational substance for their blog. Nothing was put up to fill the vacuum. The artist was set adrift.

The pattern was just getting started. TuneCore recently announced deals where it gives away its customers’ music and metadata to third party companies, allows those companies to sell and make money off that data and gets none of the money back for the artists and then—adding insult to injury—charges the artists to give their information to these third parties. Worse still, through its recently revised publishing agreement, TuneCore now forces artists to be exclusive on regards to master and synchronization licensing into TV shows, films etc, not allowing them to solicit help to get their own music placed into TV shows and films. If an artist scores a placement themselves, even if TuneCore had nothing to do with it, TuneCore requires the artist pay them the money they earned and let TuneCore take a percentage, or so it seems. That’s “exclusivity” for you.

TuneCore went mute. It lost its voice, either because it didn’t know what to say or it choose to no longer educate its customers. Management is only creative when it comes to fabricating attacks on those that created, founded, advised and originally funded the company. Then again, what can we expect, when Cogan installs the former CEO of an auto repair company (Art Shaw of RepairPal to sit on the Board of directors of TuneCore—something that made little sense to me until I learned this person appears to be an acquaintance of Cogan’s. Was this the right choice for the company? A year later, there’s no hint of vision.

The new TuneCore refuses to hold its annual shareholder meetings (despite written requests and Delaware law), appeared to ridicule other non-founder shareholders and created fictitious accusations against Jeff, Gary and me. I don’t like when bullies threaten my friends, so I wrote the Board and the TuneCore shareholders about the baseless attack against Jeff. Cogan and the board responded with more threats, inventing allegations against Jeff and me. And then shortly after my letter to the board they just happened to fire Gary Burke, the third co-founder of TuneCore and my husband. They made up absurd lies, such as the infamous “Bed & Breakfast” fiasco, where they suggested Jeff fabricated a $522 accommodation invoice when he was in Los Angeles on TuneCore business with other TuneCore employees.  (He didn’t, we shoved the proof under their noses, they backed down.) All this vitriol, all this legal posturing, and all this time and money spent on scare tactics—how does that help artists?

TuneCore began to lose more employees. Jeff, Gary and I were gone, and over the next twelve months at least another six key people that I am aware of (some who had been there for over five years in marketing, artist support and the tech team) were either fired, downsized, let go or quit. That’s nine people all gone. All that knowledge, all these good people, all that brain drain.

Brain drain has sunk companies before. You survive by redoubling your focus on the customer, by providing them what they need even before they know they need it. That was Jeff’s great strength, and I’ve watched as those programs were dismantled over the last year, one by one. Jeff wanted to do direct licensing with publishers, as it would place far more power and money into songwriters’ hands. From what I can see, that initiative died. TuneCore still reaches out to their artists, now more than ever, but not with information, education or assistance, only cries of “SALE SALE SALE!” and constant tinkering with the deal terms.

Because that’s how money men think. Music is just a product, right? It’s just an asset collected from client A and moved to vendor B. It’s not like music has hundreds of years of complex, often backwards legal quirks and business practices that artists need to know about. TuneCore has become a numbers game, and, in my opinion as co-founder of the company, this last year has shown almost no growth or innovation designed to help artists. Where are all the new ideas, the new markets, the new territories, the new value? The music industry doesn’t sit still. It changes daily. Work in the present and build for the future: that’s how you survive and grow and remain valuable.

It’s sad. I loved the company we built, I loved its commitment to disrupting the music world on behalf of the independent artist, making it better for them. Gary and I still own a sizable chunk of TuneCore. It’s been suggested to us that we stifle our opinions and feelings about TuneCore, lest we make it worth less money to us. I can’t do that. I can’t endorse and support a company that I believe is doing wrong, no matter what my stake in it. Something’s not right at TuneCore. In my opinion, the existing board and venture capital group are hostile towards TuneCore shareholders, employees and customers. Where it’s not adversarial, it’s something almost worse: adrift in its own space, running without any vision, unable or unwilling to invest in artists or educate them to help themselves. They’re tinkering with price points instead of innovating. And the artist gets no voice, nothing to be heard above the constant emails advertising TuneCore’s latest “hurry up!” special.

Had we all remained with TuneCore this last year, where would they be now? They’d be on the cutting edge, rather than the spamming side . They’d be harnessing the power of new social media rather than cutting artists off from vital information. They’d be reworking the digital music industry, bringing new business models into place that account for the new ways fans use music, instead of hoping the next email flier sucks in a few extra dollars.

To the artists who trusted Jeff and Gary and me early on, when TuneCore was all about you: hang in there. Maybe TuneCore’s new management will stop threatening old employees with lawsuits and turn its attention back to you. I certainly hope so. It could be a beautiful thing again, in the right hands.

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