The Company

NETunes.com, Inc.
NETunes is a record company organized by recording artists, musicians, entrepreneurs and business professionals dedicated to the principle that central to the success of any music business venture is:
The Music!
Promotion, marketing, legal, accounting, distribution, manufacturing, etc., are all important but, basically, supporting functions. The core priority and activity at which maximum value is created is the music; hence, our motto...
"It's About The Music!"
NETunes believes that today's record companies have failed to recognize the importance of music and have, in their rush to master the supporting functions, lost focus on music as the most important element of both financial and artistic success.
The Recording Industry Association of America (RIAA) claims that CD sales are down by nearly 40 percent over the past few years. This they attribute to sales lost to illegal downloads of MP3 (compressed format) quality versions of songs.
NETunes believes that sales are down because music lovers do not care for the majority of product being offered by today's record companies.
NETunes also believes that, just like the major labels, even the online independent record labels and stores have failed to recognized the importance of music. With a priority on maximizing set-up fees and visitor traffic, these "alternative" record companies have failed to provide any semblance of quality control. They have taken on virtually every demo-producing amateur with a result that whatever legitimate talent they do present is buried under a mountain of, at best, student-quality product.
NETunes is committed to providing a distribution and promotion platform for seasoned professionals who have demonstrated the capacity to produce music that is ready for presentation to a worldwide audience.
To ensure that NETunes remains focused, at all times, on the music, The Integrity Committee advises NETunes' Board of Directors on all aspects of NETunes philosophy, vision, direction and execution.
NETunes understands that both the distribution and promotion models for music business are changing. NETunes intends to work within these changing conditions and parameters to maximize market opportunities for talent-driven product.
NETunes is organized as a privately-held California corporation, NETunes.com, Inc., with a publishing affiliate, Windfall Music, LP. All officers and directors are also owners and have immediate influence over the operation of the company as well as a direct stake in the outcome of the venture. For more information about our team, please see Management.

Our Mission

Our mission is to facilitate the creation and distribution of enduring musical art; to promote and protect the long-term career objectives of our artists; and to provide both buyers and sellers of recorded music with a fair price structure and direct access to a user-friendly, interactive, electronic marketplace.

Compared to Major Labels

Major labels wholesale new CDs at approximately $8.00 to $10.00 per unit (about $16.99 retail) and theoretically contract to pay artists a royalty of about $0.90 per unit but the labels deduct all development and marketing costs from the artist's share so it's not uncommon for an artist to gross several million dollars and never receive anything on a project.
Do the math. If the artist is contracted to receive a 10 percent royalty but the label spends more than 10 percent of the project revenues on marketing (and debits that expense to the artist), the more records that are sold, the more money the artist owes the record company.
You can play with the numbers, i.e., increase the artist royalty and/or decrease the percentage of marketing expense recoupable against royalties, but as long as the contract allows the record company to debit the marketing expenses to the artist (and they all do), the record company is always in a position to simply spend the artist royalty on marketing. And why not? The more money spent on marketing, the more records are sold, the more money the record company makes and the more money the artist owes the record company.
A recent New York Daily News music industry case study with typical gold record earnings compiled from industry sources concluded that band members net out about the same as the annual salary of
"a city sanitation worker with two years' experience, without health benefits, vacation and retirement fund."
Industry observer Dave Marsh describes the major labels' contract and accounting practices as,
"an entrenched system whose prowess and conniving makes Enron look like amateur hour".
Music industry lawyer Don Engel, describes industry accounting practices as,
"intentionally fraudulent."

Additionally, major labels typically demand half of the artist's publishing rights and options which bind the artist to such terms for seven years or more.
Senator Orrin Hatch, R-Utah, describes the record business as,
"the only industry in which the bank still owns the house after the mortgage is paid".

NETunes distributed artists retain all publishing rights and income, control of all master recordings and are even free to distribute additional product through conventional retail systems.

Retail customers typically pay from $16 to $20 for CD recordings from which they may have heard nothing prior to purchase.
The record stores and the record companies make millions on these CDs. The artists make whatever they can keep from their first advance and whatever they can renegotiate out of the record company after they have had a few hits.
If they make it through their initial contract (which usually requires them to produce seven albums) and if they are still popular, they may be able to sign a new deal from which they get a decent advance. Other than that, the major label recording contract that they have dreamed about most of their lives turns out to be nothing more than a means to promote concert appearances.
No wonder fans do not feel guilty about sharing MP3 files. If your favorite artist isn't getting paid for record sales anyway, why not turn your friends onto their music by way of a shared MP3? At least then, maybe your favorite artist will pick up a few more fans who will support their live shows.

NETunes customers pay only $9.99 for CDs with full preview ability. Shipping and handling expenses are paid by NETunes and artists are paid $5.00 per every CD sold.
Bottom line: Fans pay a reasonable price, artists get a reasonable share, NETunes makes a reasonable profit and we all work together to create, promote and distribute great music.

Competition in Cyberspace

Yes, there are many other sites selling CDs on the Internet but none have yet to apply all of the essential elements of NETunes formula, specifically:
QUALITY CONTROL
NETunes is in Internet's first independent record store with quality control.
Unlike sites which charge artists set-up and/or monthly fees, NETunes does not accept all product submitted. Unlike the huge warehouse sites, NETunes does not carry every major label CD ever recorded.
Instead, NETunes seeks to promote a select group of artists and strike a balance between an interesting variety of product and an overwhelming mass of CDs.
Every submission is reviewed by a team of musicians with extensive touring and recording experience, again, with their focus exclusively on the music.
Amazon and CDBaby have way too many artists, tens of thousands of them. No one is going to browse through and discover anybody there. NETunes present's only a manageable number of artists in each genre.
Artists will never get a high search engine ranking (and thus massive traffic, exposure and sales) with an individual band web site. The ranking algorithms of the search engine robots require a greater diversity of product.
To maximize the worldwide reach of your music, you need an online distributor that promotes a select group of professional artists and strikes a balance between an interesting variety of product and an overwhelming mass of CDs. This is NETunes.
Are you going to browse through 45,000 CDs? Of course not and no one else is either. But would you browse through, say, 25 or 30 jazz artists (or whatever genre you prefer) if the first, second, third and, in fact, every artist you listened to was great?
So this is why, if your music is good enough, you need to distribute your project through NETunes. You need to associate with other top-tier independent artists. At NETunes you are not buried under a pile of 45,000 (or more) amateurs. Nor are you a lone artist invisible to the search engines.
At NETunes your concert fans and others that are specifically looking for you will find you (as they will on any other distribution portal) but you will also be discovered by new fans... those brought in by music download and other searches and those of NETunes' other artists as they browse through our roster.
In this fashion, every great NETunes artist helps every other great NETunes artist by driving traffic to a select catalogue of artists which is large enough to maximize promotional synergies but still exclusive enough to be practical for browsing.
ARTIST DEVELOPMENT
NETunes is actively developing concert and other promotional opportunities for our select roster of artists. All NETunes artists receive proprietary databases of radio stations and expert consulting on gaining airplay and press. NETunes will post all of your live performance dates on our Concert Calendar and send notices to our proprietary email list of fans who are eager to receive such information. For artists interested in a partner to promote their publishing interests, NETunes will present their music to television and film producers.
FULL HOME PAGE FOR EACH ARTIST
NETunes standardized home page with bio and reviews for each artist enhances the shopping experience. NETunes maintains and updates these artist pages at no charge to the artist. NETunes is in business to promote great music and make money selling the music of a very select roster of world-class artists. NETunes is not in business to accept every amateur project submitted with the emphasis on quality music sacrificed to gain more set-up fees.

WHOLESALE
The sales price of all NETunes CDs are set by the artist. At present, most CDs are priced at $9.99 shipping inlcuded.
FREE SHIPPING
Shipping and other add-on costs are never an issue at NETunes. All shipping and handling costs are included in the listed price.
INSTANT FULFILLMENT
NETunes contends that quick fulfillment is essential to maintain customer satisfaction; hence, all orders are shipped within 24 hours.
MULTIPLE PAYMENT OPTIONS
NETunes offers a secure, on-line payment system (operated by the PayPal division of E-Bay). All major credit cards as well as payments by check are accepted.

ALL TRACKS MAY BE HEARD
NETunes maintains that both product sales and customer satisfaction are greatly increased when potential buyers are able to preview all tracks before purchase. Only samples are provided so that visitors can buy with confidence while artists may offer their product without fear of piracy.
ALL THREE DELIVERY OPTIONS
NETunes currently offers CDs in their original format and packaging. Soon to follow are downloadable full length MP3s (at $0.99 per tune) and customized compilation CDs priced at 10 for $12.99 shipping included. This will provide visitors with all three Internet delivery options and artists with three separate income streams.
FREE MUSIC DOWNLOADS
FREE music downloads in near-CD quality MP3 format are available on many great tracks. FREE music downloads have become an accepted method of promotion for many artists both new and established. One song distributed in FREE music download format is, indeed, the most cost-effective way for a new artist to begin to connect with new listeners and induce sales of their full CD.
In the fifties and sixties, artists would typically release a 7-inch single in 45 RPM vinyl format in order to generate interest in the upcoming 12-inch album in 33 RPM vinyl format. Posting a FREE music download on NETunes is the new millennium equivalent of the tried and tested strategy of using a great single to introduce and promote a full-length album project. NETunes offers such FREE promotional tracks in its FREE Music Downloads section and on the home pages of most artists.
A TRUE PARTNERSHIP WITH ARTISTS
NETunes seeks to avoid the traditionally adversarial relationship between record company and musician and operate in partnership with the artists it develops, promotes and/or distributes.
NETunes is the only multi-label distribution platform operated by prominent, successful musicians such as George Duke, Justo Almario, Gerald Albright, Wayne Henderson, Ronnie Laws, Ahmad Jamal, Billy Mitchell, Max Bennett, Dr. Reed Gratz, Rick Shlosser, Ronnie Shumake, Hollis Gentry, Rick Dellefield, Reggie McBride, Stuart Elster, Randell Young and Mayuto Correa.
As new technologies transform the music business, these musicians' vision of what the industry can and should be has given rise to NETunes... a new kind of record company uniquely positioned to provide production, promotion and distribution services to a newly-empowered artist community.

Advantages for Buyers
NETunes offers significant advantages for buyers and users of recorded product starting with price. Buyers pay less!
See... Advantages for Buyers for a comprehensive discussion of such advantages.
Advantages for Sellers
NETunes offers significant advantages for sellers and producers of recorded product starting with price. Sellers net more!
See... Advantages for Sellers for a comprehensive discussion of such advantages.

Submission Procedure

NETunes is always interested in adding quality new artists to our roster.

To learn how to become a NETunes distributed recording artist and/or independent record label, see... Submissions.
Investment Information
Information concerning investment in NETunes.com, Inc., including the company's current Private Placement Memorandum, may be obtained by accredited investors from Venture-Net Partners.
An executive summary is available at Executive Summary.
Contact Information

Netunes.com, Inc.
3183 Airway Avenue, Building E
Costa Mesa, CA 92626
949.498.3600
949.498.6900 (fax)
See Also...
Management