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Independents' day

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

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By Lynne Margolis

Eight years ago, Nan Warshaw, Rob Miller, and their Chicago friends were lamenting the dearth of "new and exciting music - music that ignited their passion the way punk and alternative rock had before big record labels and Gap commercials co-opted their sounds.

Then they began noticing that several area bands were putting Hank Williams twists on their Nirvana and Elvis Costello influences. So they decided, for kicks, to put out a compilation album of "insurgent country." Warshaw and Miller anted up a few grand apiece.

"We had no expectation that this was going to become a business," Ms. Warshaw says. "The first few years, we'd put out a record and when it broke even, we would say, 'Oh, what record should we do next?' "

But 3-1/2 years after it first started, Bloodshot Records finally hired its first paid employee. Today, it's a popular and healthy independent label, one of many operating outside the grip of the five mega-majors: Sony Music Entertainment Inc., Universal Music Group, BMG Entertainment, EMI Group, and Warner Music Group.

While executives at those labels wail about the industry's imminent collapse, indie labels and artists are singing a much happier tune. Profits are up - in some cases by 50 to 100 percent. That's in contrast to overall album sales, which dropped about 11 percent in 2002.

"We don't do too much crying over here," Cameron Strang, founder of New West Records, admits proudly. The home of artists like Delbert McClinton, the Flatlanders, and John Hiatt has doubled its business for the past three years and is projecting a $10 million income in 2003.

Paul Foley, general manager of the biggest independent label, Rounder Records of Cambridge, Mass., happily brags, "2002 was actually Rounder's best year in history. We were up 50 percent over 2001."

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