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Independents' day

What record industry slump? Independent labels say business has never been better.

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Many industry participants, including Michael Caplan, cofounder of just-launched Or Music in New York, go so far as to predict that the current major-label model is as doomed as the dinosaur - partly because majors are unable to read and react quickly enough to market activity. If a record stops selling, it takes weeks for them to "turn the semi around." And if an artist's sales pick up in a market, the majors can't capitalize quickly enough to maximize profits.

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"The idea is to keep it lean and mean," Mr. Caplan says. "We're gonna be nimble."

Caplan, who spent 21 years as an A&R (artist & repertoire) man with Sony-owned Epic Records, says big labels also have lost sight of what music is about - the artists, not the songs.

By seeking home-run hitters at the expense of solid team members, he notes, "They're just ceding a whole big part of the marketplace that we can go after."

Even some major-label executives agree that the current model isn't working. Zach Hochkeppel, director of marketing at Capitol/EMI-owned Blue Note Records (home of multiple Grammy winner Norah Jones), admits, "There's a lot wrong with the record industry as a whole, and a lot of it comes from the fact that the major labels have too much power."

Who needs pop radio?

Majors have the muscle to pay radio-promotions people to push for airplay, and product-distribution systems that far exceed the reach of indies. Bigger distributors won't deal with indies because the numbers are too small for their chain-store clients.

Big-box stores won't carry an album unless they know it will sell at least 5,000 units - which new artists won't necessarily do right away.

And few indie labels even market to big commercial radio stations, much less press for hits. They usually can't afford to pay independent promoters to "work" a song.

Instead, they build relationships with college and public radio stations and local retailers who are more receptive to less mainstream music.

While Rounder does use radio promotions people for Adult Album Alternative and Adult Contemporary formats, the label may work a release for 12 or more months, not 60 days, as some majors do. Many of Rounder's artists don't get airplay and still have solid sales. Raffi is the No. 1 children's artist in the world. (The label's biggest success story is Alison Krauss, whose two latest releases are about to become her second and third platinum albums.)

But Rounder never signs artists based on sales projections, Mr. Foley says. "The decision is made based on whether we want the artist to be heard."

Artists moonlight as record execs

Self-described folk singer Ani DiFranco is the poster child for the Do It Yourself label movement. Her successful Righteous Babe Records has helped inspire artists Aimee Mann, Jonatha Brooke, and scores of others to go it alone.

But unlike DiFranco, most choose that route after miserable major-label experiences or a lack of offers. Pittsburgh artist Bill Deasy has encountered both. Some years back, Deasy and his band, the Gathering Field, were signed to Atlantic Records. Just days after, their recruiter - whom they thought was in line to head the company - was overthrown. It took them two years to get out of their contract.

Deasy, best known as the cute guy whose "Good Things are Happening" video plays at the opening of the "Good Morning America" TV show, just formed what he considers his first real record label. Last week, he released his second solo disc, "Good Day No Rain."

He says the experience has given him his "most acute awareness" of the difference between trying to get signed and going indie. After recording four songs with Greg Wattenberg, who produced the Five For Fighting hit, "Superman (It's Not Easy)," Deasy says, "I really had an eye toward the prize of the record deal.... And then [I] just came flat up against the wall of the music business. You know, when you're over 25, you're a senior citizen."

But he admits now, "I'm sooo glad I didn't get (another) record deal - and I'm not just saying that. It's just so obvious to me that the music business isn't really about music."

He and his manager formed Bound To Be Music and released the disc themselves. "I am just feeling so thrilled and relieved that it worked out this way," he says. "If you're making $10 a CD and you sell 10,000, that's not so bad."

Brooke and Mann spent time in their own label purgatories before giving up on the system.

After starting her own label, Bad Dog Records, Brooke also confessed, "I gotta say [I'm] the most fulfilled and content I've ever been."

With the ease of Internet sales and new support systems such as United Musicians, an organization formed by Mann; her husband, Michael Penn; and their manager, Michael Hausman, to provide support services to indie artists, bucking the system truly seems like a smarter option than joining it.