Founder of Digital Music Company Is Ousted, and Theories Abound

By BEN SISARIO

In a surprise change that could have consequences for thousands of independent recording artists, the founder of TuneCore, a digital music distribution company, has been fired by the company's board.

Jeff Price, the company's outspoken founder, announced in a blog post on Wednesday that he was no longer its chief executive. He gave neither a reason for his termination nor a specific date when it took effect.

TuneCore acts as a digital middleman for small and independent artists, charging a $50 annual fee to distribute albums to online services like iTunes, Amazon and Spotify and keep track of royalties. Most of its 700,000 clients are little known at best, but the service has also attracted big names like Trent Reznor, Drake and even Jay-Z, who own their music and stand to earn more money selling an album through TuneCore than through a traditional record label.

The simplicity and openness of its model has made Tun eCore extremely popular with musicians. In his blog post, Mr. Price said that in its six years the company had “sold over 610 million units of music generating over $310 million in gross music sales.”

Peter Wells, another founder of TuneCore who had wide-ranging responsibilities at the company, was also let go. “My position was dissolved,” Mr. Wells wrote in an e-mail.

It was not immediately clear why Mr. Price and Mr. Wells were let go. A TuneCore spokesman declined to comment, and Gill Cogan, a board member who is also partner in TuneCore's lead investor, Opus Capital, did not return a phone call late Wednesday. Billboard, citing anonymous sources, said that Mr. Price had been fired on July 20, a date that was corroborated by a person inside the company who was not authorized to speak about it.

Within hours of Mr. Price's announcement on Wednesday, commentators, other business people and artists began to speculate abo ut the reasons, and also to defend his management of the company.

One independent artist, Alex Day, wrote on an industry blog that he had sold “half a million songs on iTunes, all put there by TuneCore.” He added: “I've always seen TuneCore as a supportive family and there can be no greater home for my work, and Jeff is responsible for creating such a welcoming and encouraging environment for emerging talent.”

Mr. Wells added: “I'm stunned this happened to Jeff, and very concerned. Jeff is TuneCore, its heart and soul and brains.”

Inside the industry, Mr. Price has also had his detractors. Even in a field known for headstrong entrepreneurs, he is particularly volatile, churning out thousands of argumentative words on his blog and picking public fights. A dispute with Amazon over royalties, for for example, resulted in TuneCore's catalog being removed from Amazon in Europe for a several months earlier this year.

Mr. Price says he sticks up for artists' rights; others have accused him of being bombastic and of using such situations to promote his business.

Some of Mr. Price's business plans have also been criticized. He has said that TuneCore's flat fee is the fairest structure for artists in the digital age. But that also means that TuneCore makes no more money selling 10 copies of an album than selling a million. Last year, the company also started a service tracking down publishing royalties for songwriters, but as of May it had signed up only 4,000 clients. With Mr. Price out, the company could change some of these policies.

On Thursday morning, Rdio, a subscription streaming service, announced that it had struck licensing deals with TuneCore and one of its competitors, CD Baby. It was unclear whether Mr. Price's termination had anything to do with that deal, and an Rdio spokeswoman could not immediately be reached.

Mr. Price remains a member of TuneCore's board, and owns a portion of the company. Reached by phone late Wednesday, he declined to comment on being fired, but said: “I owe it to every investor in that company, every adviser and employee of the company, and every customer, to ensure that the value of the company is maximized.”

Ben Sisario writes about the music industry. Follow @sisario on Twitter.