The trend had Nine Inch Nails frontman Trent Reznor exulting over being "free of any recording contract with any label" in a recent post on his Web site.

Music industry insiders say the bids for independence only make sense for the most popular acts or those with devout fans who fill concert seats, buy T-shirts and seek out their music.

"These artists are in the position to basically set their own rules and set their own course," said Ted Cohen, managing partner of media consulting firm Tag Strategic and a longtime record label executive.

"The game used to be really simple," Flohr said. "You get your record played on radio, you get your face on Rolling Stone (magazine), and you get on 'Saturday Night Live.'

"Now, it's you put your video on YouTube, you get your MySpace page happening, you do your deal with Facebook, you tour ... all these things add up, hopefully, to a successful record."

The music industry has seen a 14 percent drop in the number of CDs sold in the U.S. compared with the same time last year, according to Nielsen SoundScan.

To adapt, the major labels are trying to cut deals with artists that go beyond album sales and encompass income from concert tickets, T-shirts, music publishing and other sources.

New bands with their eyes on superstardom still need the deep pockets of the major labels to pay for the promotion, marketing and distribution necessary to get heard above the din of countless other acts.

Even superstars can use the boost.

Take Prince. Famous for scribbling "slave" on his cheek during a bitter dispute with Warner Bros. Records in the early 1990s, he has released most of his music over the Internet during the past 10 years while striking CD distribution and marketing deals with different major labels to get copies of his albums in stores.

Radiohead has said they want to get their latest album in stores in a few months and are said to be shopping for a possible major label distribution deal, if not a multiple album contract.

And it's widely expected that Live Nation will have to strike a distribution deal with an established label to handle promotion and get Madonna's upcoming albums in stores.

In theory, that could lead Live Nation back to Warner Music, home of Warner Bros. Records, where Madonna signed as a new artist in 1984.

"It comes down to, do you need a label? Possibly not. Do you need the expertise that a label traditionally brought? Absolutely," Cohen said.

Despite the turmoil in the industry, the major record companies continue to exert considerable influence in the marketplace.

Major labels are not likely to disappear or become irrelevant, although the role they play might change as digital music overtakes CDs and other physical formats, Flohr said.

"I don't think this is the death of anything," Flohr said. "I actually think this is the rebirth of all of us."