Fostex Does Deal with On-Line Label

Fostex Corporation of America announced a joint marketing venture with the on-line music distribution company NewTechMusic, Inc. (NTM), based in Campbell, California. Under the terms of the agreement announced, all appropriate Fostex digital recording products will now include direct access to a comprehensive set of software engines that will allow users to create digital music files in MP3 and Real-Audio streaming formats that can then be uploaded for sale on both the NTM (www.newtechmusic.com) and affiliated music showcase Web sites.

Furthermore, NTM's proprietary NewTechMusic Smartpages software will now be bundled with Fostex systems, allowing artists to easily create web pages on the NTM site to promote and sell their recordings. NewTechMusic Smartpages software is designed to enable even the least web-savvy musicians to easily and quickly create, upload and update their own individual Web pages. Artist Web pages are hosted free of charge on NTM's site. NTM will track all sales by Fostex users and pay them on a 50-50 basis for all CD sales; sales of individual songs downloaded via MP3 will be paid at twice the statutory rate for singles. All payments will be made on a quarterly basis.

The agreement between Fostex and NewTechMusic, Inc. is exclusively of a marketing nature. Fostex Corporation of America will make no direct financial gains on the program - other than the increased sales of its products the company expects to see as a result of this revolutionary program. "At a time when more than half of the estimated 30,000 recordings made in a year are created and distributed by independent labels, today's joint venture will provide Fostex users with a significant advantage in an increasingly crowded music market," observed Dick Ravich, Executive Vice President and Chief Operating Officer, Fostex Corporation of America.

"It is only appropriate that Fostex take this pioneering path in the Age of the Internet," Ravich continued. "Starting with the first affordable open-reel 8-track recorder in 1981, and continuing right through to today with innovations such as the FD-8 hard disk recording system, Fostex has helped empower the independent music market. Now, together with NTM, Fostex is providing artists with the tools they need for every stage of the Web based music creation and publishing process from laying down the first track to having the opportunity of getting paid for their music."

NewTechMusic, Inc. was founded in August 1998 by Pedro Vargas, formerly of Intel, to provide online distribution and retail operations as part of joint venture agreements with musicians and recording artists. NTM seeks to provide these musicians and recording artists with a viable vehicle to showcase their music before a potential worldwide audience, who can purchase their recordings either via MP3 downloads or via retail outlets in a physical distribution network that is in the process of being established by NTM.