Sellers' Benefits

Advantages for Sellers
NETunes offers artists and independent labels (sellers) several advantages over conventional retail distribution including:

1. Immediate worldwide distribution;
2. Full preview ability without authorized duplication;
3. No need to sign (or deal) with major label;
4. Ability to provide fans with 24-hour access to photographs, videos, reviews, performance schedules and product worldwide;
5. Immediate ability to market ancillary items and merchandise worldwide;
6. No need to press hundreds of thousands of CDs to have product available at retail outlets worldwide;
7. No need to compete with other artists and labels for retail shelf space;
8. No need to court retailers with expensive in-store displays and guaranteed advertising;
9. No need to hire retail record promoters;
10. No need to sign several major artists in order to qualify to establish accounts with major retail chains;
11. No deductions from artist's share for marketing;
12. Complete control over marketing activities and budget;
13. Artist's net earnings more than tripled;
14. Ability to generate immediate income with monthly accounting and earnings distributions;
15. Artist retains ownership and control of all master recordings;
16. Artist controls manufacturing, hence, no need for expensive royalty compliance audits and litigation;
17. Artist retains all publishing rights and income; and
18. No artistic interference whatsoever.

Immediate Worldwide Distribution

The harsh reality of the music business is that a major label recording contract is an event which is statistically less likely than being struck by lightning. A lot of talent really does go undiscovered. NETunes offers artists and small labels immediate worldwide distribution. Without NETunes distribution, artists are literally at the mercy of the tastes and whims of a very few major label decision makers; a group which admits they are right (about a hit record) only about five percent of the time.
Regardless of what is currently considered in vogue (and with no attempt to influence, establish or dictate what is "hip" or what is "passe"), if a CD sounds like an authentic professional product, whatever the style, NETunes will distribute it and give the artist a chance to develop an audience. The alternative for so-called "untapped talent" is to continue to solicit major labels - for perhaps years - for a deal that may never happen.

Full Preview Ability

Most retail record purchases are actually based on very limited prior exposure to the product; hence, massive, expensive marketing campaigns are necessary to create a hit song that will bring buyers into the store. The ability to preview recorded product before purchase (without the possibility of unauthorized duplication) fundamentally alters this equation. Hit songs will continue to support CD sales and may continue to dominate the industry - but relatively obscure product now has a way to connect with an audience.
Aficionados of particular styles, e.g., jazz, blues, rap, country, alternative, may explore the applicable musical style section and make informed purchases of product they find interesting. A massive promotional budget is no longer needed for a release to be profitable; a talented performer with a quality CD can literally become an internationally-distributed (and commercially-successful) recording artist overnight.

No Need To Sign (Or Deal) With Major Label

NETunes offers artists the opportunity to market their recorded product worldwide without the complexity, commitments or peril of a major label contract. Even if a performer is able to generate major label interest, the artist must still contend with difficult and expensive contract negotiations (the majors will take it all if they can); long-term commitments to essentially one-sided terms; devious accounting practices; and continual artistic interference.
NETunes offers every artist the same fair deal, basically a 63:37 split of record sale profits; a one-year commitment; a simple, no-zingers contract; straight-forward, monthly accounting; artist ownership and control of all masters and copyrights and no artistic interference whatsoever.

Ability To Provide Fans With 24-Hour Access

NETunes offers artists the opportunity to provide fans with 24-hour access to photographs, videos, reviews, performance schedules and product worldwide. Artists are able to generate sales, build and maintain fan relationships 24-hours a day, seven days a week, every day of the year.

Immediate Ability To Market Ancillary Items Worldwide

NETunes offers artists the immediate opportunity to market ancillary items such as hats, T-shirts and videos worldwide. Ancillary items not only generate additional revenue, they help build and solidify long-lasting fan relationships.

No Need To Press Hundreds Of Thousands Of CDs

In order to have product available for all potential buyers, traditional retail record distribution requires the manufacture and shipping of hundreds of thousands of CDs in order to put a small number of CDs on the shelves of the various local retail outlets. This represents a substantial investment, gamble and barrier to entry, especially for new artists and small labels. This expense also greatly increases the number of CDs which must be sold before a given release is profitable.
NETunes offers artists and small labels the opportunity to have product available, not only nationwide but worldwide, with minimal investment in manufactured units and no up-front shipping expense. This not only removes the capital required barrier to entry, it also greatly reduces both the risk and profitability threshold for new releases.

No Need To Compete For Retail Shelf Space

Retailers have only a finite and relatively limited amount of space (for which they pay premium rent and must turn a substantial profit to stay open); hence, even major labels must compete for access to shelf space. Small labels and their artists are at a disadvantage since they, obviously, do not generate the volume of the majors.
NETunes is essentially a music warehouse interfaced with the consumer via computer so shelf space is not a significant problem. Independent artists and small labels must still compete with major label artists for sales... but not for access to the store.

No Need To Court Retailers

In order to obtain shelf space, major labels court retailers with expensive in-store displays and guaranteed advertising. Since NETunes associated artists and labels have no need to court retailers, the expense of in-store displays and co-op advertising arrangements is avoided.

No Need To Hire Retail Record Promoters

Even with a demonstrated track record of sales, expensive in-store displays and guaranteed advertising, major labels still find it necessary to hire retail record promoters to assure competitive access to the retail shelf. This is an area rife with abuse in terms of performance (did the promoter really contact the retailers as promised?); accounting (did the money really get spent on legitimate retail promotion?); and potential legal problems (are we going to be accused of illegal activity, i.e., payola, because of our retail promoter's business practices?). NETunes enables artists and labels to avoid this area altogether.

No Need To Sign Several Major Artists

In order to qualify to establish accounts with major retail chains, independent labels must generally carry several relatively major artists. Otherwise, most major retail chains believe that shelf space and accounting costs exceed the bottom line benefit even if all product is provided on consignment. NETunes offers immediate international distribution to small labels even if they only carry, or consist of, one artist.

No Deductions From Artist's Share For Marketing

Major labels theoretically contract to pay artists a royalty of about $0.90 per unit but the labels deduct all marketing costs from the artist's share so an artist may gross several million dollars before receiving anything on a project. Marketing deductions hold, at least, the potential for fraud and abuse and are always a source of conflict and contention between artist and label. NETunes deducts no marketing expenses from the artist's share.

Complete Control Over Marketing Activities And Budget

Although major labels typically deduct all marketing expenses exclusively from the artist's royalty, i.e., not off-the-top but solely from the artist's share, the artist has virtually no control over either how much, if any, is spent or for what media or activities the marketing budget is allocated. Basically, the major label has a blank check from the artist to spend as the label executives desire. Additionally, a portion of the label's overall marketing budget is allocated (per accounting) to each artist so it's entirely possible to be charged for but never actually receive any marketing whatsoever.

NETunes affiliated artists receive at least $5.00 per CD (about $4.00 net after manufacturing costs of about $1.00) as opposed to major label artists who receive about $0.90 per CD with all production and marketing costs taken solely from the artist's share. NETunes distribution thus empowers the artist with both the freedom and resources to allocate and administer their own marketing activities and budget.

NETunes provides affiliated artists with basic marketing assistance without charge, e.g., updated and current lists of radio stations, music directors and disc jockeys known to play, as well as writers and publications known to review, the applicable style of music. The final marketing decisions and control over promotional activities and budgets remain with the artist.

Artist's Net Earnings More Than Quadrupled

The prices for all NETunes CDs are set by the artists within a range of a minimum of $9.99 to a maximum of $19.99. Even at a list price of $9.99, the artist receives at least $5.00 per unit. If NETunes handles fulfillment, the Arists recieves the list price less $4.99 CD. If the Artist handles fulfillment, the Artist receives the list price less $3.99 per CD.
Even though the buyer typically pays only half, compared to major label distribution, the artist's net share (about $4.00 after manufacturing costs of about $1.00) is more than quadrupled even before accounting for the majors' production and marketing offsets. Even allowing for significant production and/or marketing expenses incurred by and under the artist's complete control, the artist's net share is still more than four times that of a major label deal.

Unit Breakdown (Compact Disc)

$9.99 Minimum Wholesale Price (includes shipping)

$1.00 Shipping

$8.99 Margin

$3.99 NETunes Share (44%)

$5.00 Artist Share (56%)

Ability To Generate Immediate Income

The shortest accounting period for a major label distributor is quarterly with production, marketing and return offsets delaying payments for up to several years. Most releases actually result in no record royalties being paid to the artist at all even though the project is, in many cases, profitable for the distributor. NETunes offers artists and small labels monthly accounting and immediate earnings distributions.

Artist Retains Ownership Of Masters

Major labels typically demand ownership and control of the artist's master recordings so, even after their recording contract expires, the artist never regains ownership of the music they created. The recording industry has seen several cases of prolonged litigation over this very issue with the artist generally coming away with only a large legal bill.
Additionally, major record labels frequently release material which the artist would prefer to re-record or simply can altogether. Artists have attempted to litigate this issue as well with only slightly better results. NETunes distributed artists always retain ownership and control of their masters. Artists can be proud of, or at least satisfied with, every release.

Artist Controls Manufacturing

NETunes distributed artists and labels also retain control of manufacturing. The artist always knows exactly how many copies have been produced and, hence, no need arises for expensive audits and/or litigation to determine and/or enforce compliance with royalty agreements. Associated artists are even free to distribute additional product through conventional retail systems, if desired.

Artist Retains All Publishing Rights and Income

Major labels typically demand control of the publishing rights and half of the publishing income. This is accomplished by "publishing" the artist's material with the major label's affiliated publishing house. The latest copyright laws established that half must go to the writer(s) and half to the publisher so, presumably, the labels would demand even more if not restrained by statute.

Theoretically, the publisher earns its half by promoting the copyright, i.e., encouraging other artists to record the copyrighted material thus generating additional writer's royalties for the artist. In practice, most artists would do far better by establishing their own publishing entity and collecting both the writer's and publisher's share.
NETunes distributed artists retain all publishing rights and income. They are free to collect both halves of the publishing pie and/or shop certain copyrights to publishing houses that have an incentive to actually promote the copyright.

No Artistic Interference Whatsoever

Major record label executives seem to have an uncontrollable impulse to meddle in the creative process of just about every artist they sign. Even long-established, multi-platinum superstars, such as Prince and George Michael, report that negative interference from label executives has stifled their creativity and generally made their lives miserable.
NETunes envisions itself as an electronic distribution partner, period. NETunes goes not seek to direct or control artists, their careers, tastes or creative methods. Major labels, with all their resources and experience, have managed to achieve only very dubious results in this area - although they continue to try.