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


image from www.hollywoodreporter.com
UPDATE 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 http://repairpal.com/team) 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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