CANNES, France – Rock veterans Peter Gabriel and Brian Eno are launching a provocative new musicians' alliance that would cut against the industry grain by letting artists sell their music online instead of only through record labels.

With the Internet transforming how people buy and listen to songs, musicians need to act now to claim digital music's future, Gabriel and Eno argued Monday as they handed out a slim red manifesto at a huge deal-making music conference known as Midem.

They call the plan the "Magnificent Union of Digitally Downloading Artists" – or MUDDA, which has a less lofty ring to it.

"Unless artists quickly grasp the possibilities that are available to them, then the rules will get written, and they'll get written without much input from artists," said Eno, who has a long history of experimenting with technology.

By removing record labels from the equation, artists can set their own prices and set their own agendas, said the two independent musicians, who hope to launch the online alliance within a month.

Their pamphlet lists ideas for artists to explore once they're freed from the confines of the CD format. One might decide to release a minute of music every day for a month. Another could post several recorded variations of the same song and ask fans what they like best.

Gabriel, who has his own label, Real World Records, said he isn't trying to shut down the record companies – he just wants to give artists more options.

"There are some artists who already tried to do everything on their own," he said, adding that those musicians often found out they didn't like marketing or accounting. "We believe there will be all sorts of models for this."

A representative with the venture said other musicians had expressed interest in participating in the alliance, but did not provide names.

One band that has found its niche online is the jam band Phish, which sells downloads of its concerts on a popular website.

The band's relationship with its devoted fans is often compared to that of the Grateful Dead, and the site is another chance for close contact. But it also generates plenty of money: more than $2.25 million in sales since 2002.

What's driving the movement is the success of legitimate download sites such as Apple's Internet music store, iTunes, which sells songs for $1 a pop in the United States.

Both Gabriel and Eno started their careers in the 1960s and remain immensely influential.

As a means to help unsigned artists, their effort "is certainly going to be a valuable and interesting thing to do," said Josh Bernoff, principal analyst with Forrester Research in Cambridge, Massachusetts.

"But for anyone (already) signed it's almost certainly a violation of their contract," said Bernoff, who addressed the conference over the weekend. "It's not in a record company's best interest to have large pieces of music out there that they don't have control of."

Gabriel co-founded a European company, On Demand Distribution, which runs legal download sites in 11 European countries.

The company would provide the technology for MUDDA, though Gabriel and Eno are looking for online partners.

Europe's sites haven't yet caught up to the success of the U.S. portals. Apple's iTunes, for example, is planning a European launch this year, which is expected to build interest in legal downloading in a market where many people don't realize there's even such a thing.

Because both legal and illegal sites offer tunes a la carte, many in the industry believe they'll make albums less important by putting the focus on catchy singles.

Eno and Gabriel both suggested they'd welcome a chance to make songs that stand alone.

"I'm an artist who works incredibly slowly," Gabriel said. "If some of those (songs) could be made available, you don't have to be so trapped into this old way of being confined only by the album cycle."

The former Genesis singer and world music promoter is interested in putting multiple versions of the same song online. He's also looking forward to being able to hear unfinished music from other artists.

"We tend at the moment ... to try to find a moment when a song is right. You stick the pin in the butterfly and put it in the box and you sell the box," he said. "Music is actually a living thing that evolves."