Digital music service Baboom has “severed all ties” with its founder Kim Dotcom, in an attempt to cultivate more positive relationships with the music industry.

The former Megaupload boss launched Baboom in 2013, promising it would provide musicians with a new way to distribute their music directly to fans, and be paid for it.

Dotcom quit his role as head of cloud storage firm Mega to concentrate on the new venture, but as Baboom prepares to launch early in 2015, he will no longer be involved, having sold the 45% stake in the company that he controlled through a family trust.

“In the evolution of every company, a change of leadership, direction and focus is needed and this tipping point had been reached,” said Baboom’s chief executive Grant Edmundson, in a statement.

“Kim is moving on to focus on other projects, and both camps wish each other well with future plans.”

The separation appears to be amicable, with Dotcom providing more details on the reasons in a tweet shortly after Baboom made the announcement:

In its current, soft-launched state, Baboom is a cross between SoundCloud and iTunes, providing artists with a way to make their music available to fans as streams or downloads, from their profiles on the site.

Baboom went live in January 2014 with a single artist – Kim Dotcom – and his album Good Times. The company is now in the process of striking more deals with artists and labels.

Many of the latter may have been put off by Dotcom’s past, with Megaupload regularly accused by music rightsholders of being a haven for piracy before it was shut down in January 2012. Dotcom has since regularly criticised the music industry publicly.

Edmundson said Baboom is pressing on with its launch plans now. “We plan to launch in the first quarter of 2015 and both music fans and music makers alike have plenty to look forward to,” he said.

“Baboom’s distinctive design is a world away from the cookie-cutter streaming music services. The platform will be open to artists of all kinds, will support high-quality FLAC files, faster downloads and analytics that have artists connect with fans around the world.”

It is unclear what today’s news means for Baboom’s plans for a stock market flotation on the Australian Securities Exchange at the end of 2014, which were announced earlier this year.

The company was planning to raise AU$4.5m (£2.5m) to help fund its launch, but its prospectus admitted that Dotcom’s reputation might be a hindrance to its business.

“Owing to Kim Dotcom’s Megaupload heritage, some users and music suppliers may not favour using or engaging with Baboom, and labels may be reluctant to license material,” explained the prospectus in its risks section.

“Baboom intends to assure labels and collecting societies they will be appropriately recompensed for all material used. Baboom will also acquire music from friendly major artists and will host original independent artists who choose to upload their own material, creating a new repository of music no matter how much major label material is available.”

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