Australian indie label Rubber Records is shelving its CDs for good.

The Melbourne-based label, which in the past has released albums by the likes of Jet, 1200 Techniques, Underground Lovers and the Casanovas, will no longer sell CDs in traditional outlets. Instead, all its releases will be digitally delivered from its own online store.

The decision to take such an alternative route was a practical one, explains Rubber Records managing director David Vodicka.

"Physical retail distribution is dictated by a business model that no longer works for either the customer, the artist or the label," says Vodicka, who also serves as chairman of indie trade association AIR. "It's also anti-competitive. We can't sell-in direct to the biggest national retailer JB Hi Fi, we have to go through a third party distributor with an account. Distributors take a minimum cut of 25%, and we have to pass that onto the consumer."

Vodicka says Rubber's direct-to-fan marketing and consumer approach is a cost-effective solution that will appeal to other indies. "To an extent, it's already started. Anything considered 'marginal' by traditional retail, no longer gets shelf space, so niche music fans have already learned to either buy direct -- either at shows or via the Web -- or digitally," he tells Billboard.biz.

Visitors to the Rubber Records Digital Store are enticed with a free album download in exchange for signing up to the mailing list. The label promises to pass on cost savings to its customers. "Our prices are 25% cheaper than iTunes," he says.

All existing Rubber Records CD and vinyl catalog will be sold at a warehouse clearance sale May 15 at the label's corner building in West Melbourne. Leftover stock is to be destroyed.

Not surprisingly, retailers aren't big fans of Rubber's bounce away from physical soundcarriers. "This is a very short-sighted strategy as many fans want to go into their favorite record store and listen or buy," comments Geoff Bonouvrie, owner of Sydney-based retailer Mall Music and former chairman of retail association AMRA. "Having a physical presence gives the fan a chance to feel and touch before buying. Taking ownership through the concept of buying will always be important to the fans."

Cordrazine's long-awaited sophomore album, "Always Coming Down," will be the first release through Rubber Records' new model on Aug. 14.

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