Something that we, in rap, have known for a long time:

10/30/06

Artists produce albums on own

Digital music cuts out studios

BY PHYLLIS FURMAN
DAILY NEWS BUSINESS WRITER



Hall & Oates are set to appear within the next few weeks on the "Today" show and "Extra" to promote their first ever Christmas album.

But the duo hasn't had a record deal in years. Rather than partner with a major label, Hall & Oates has released "Home for Christmas" on their own three-year-old label called U-Watch.

"We're putting out records to our fan base," Hall & Oates' Daryl Hall told the Daily News.

Artists are singing a different tune as they increasingly bypass the major record companies to make CDs - solo.

The age-old model of an act being shackled to a record label is growing colder than Michael Jackson's last album.

Everyone from one-time teeny bopper heartthrobs Hanson, to quirky pop act Barenaked Ladies, to hard rockers Motley Crue are on their own.

Singer Sarah McLachlin plans to go indie after finishing up her current contract with Sony BMG, her manager said. Even little known rock acts like the Format are trying to get launched outside of the major label system.

Jimmy Buffett, a pioneer of do-it-yourself labels, has a top 20 release this week. And two of the biggest acts of all time answer to no music major. The Eagles, no longer signed to Warner Music Group, just struck a deal with WalMart that will put their next releases exclusively in Wal-Mart stores. Garth Brooks took a similar route after parting ways with his longtime label Capitol Records.

"This is the future," said rock manager Terry McBride, whose clients include McLachlin and Barenaked Ladies. McBride expects nearly all of his acts to part with their record companies over the next few years.

The vast majority of recording artists are still signed to major record labels. But the indie trend is growing louder, thanks to changing forces in the music biz, said prominent music attorney Fred Davis.

Some artists have been been forced to go solo because their sales have peaked and the majors no longer want them. "The major labels are going for the quick sell," said Roy Trakin, senior editor of Hits magazine.

The rise of digital music sales has made it easier for artists to cut out the middleman. Almost any artist can sell songs on iTunes.

The Internet is also shifting the power away from the majors. While once artists depended on their record companies to promote their songs to radio stations and MTV, now social networking sites like MySpace.com are the place to break records.

If done successfully, going the independent route can be more lucrative than a record deal. Artists get to keep the rights to their master recordings and potentially capture a much bigger share of their record sales - $5 to $6 per album vs. the standard $1 to $2.

Hanson's most recent album, put out on the act's own label 3CG, sold a modest 150,000 units in the U.S. and 600,000 worldwide. But because the band did it on their own, they pocketed $2.4 million, said the band's manager Allen Kovac.

There are big disadvantages to trying to sell records without the deep pockets and marketing muscle of the majors. "You have to realize you will never have a No. 1 record," Hall said.

Hall and partner John Oates, work hard to keep costs down. "I don't spend a million dollars on a record," Hall said.

Without a record company backing them, the duo had to be creative about getting their latest CD into stores.

Because they lack the budgets to pay retailers for prime shelf space, they struck an exclusive deal with music retailing giant Trans World, which controls chains like Sam Goody and F.Y.E. The deal assures them prominent display in Trans World stores.

"You have to be flexible," Hall said. "If you've been around a long time, you can do things differently."