As musicians fight tooth and nail with record companies over the ownership of digital rights, power in the music world continues to shift.

The latest tremor came Feb. 7, when David Fagin of New York pop band the Rosenbergs publicized his band's decision not to play on Farmclub.com's TV show. Writing on the band's website, Fagin revealed that by signing the Farmclub performance agreement, Universal Music's Farmclub label would have a 60-day option to sign the band to a contract that would give the label not only the right to the band's domain name, but also the right to control its website and to operate it commercially.

Though the Rosenbergs already have a website--and Farmclub could have probably been convinced to let it stand, since the contract allowed for one non-official, artist site--the issue reopened the ongoing controversy regarding the ownership of domain names.

But there was a larger issue here too: royalties on Net music were going to be less than on CD sales. The Farmclub deal stipulated that the band would only get 80 percent of a basic royalty rate of 14-15 percent for ''electronic transmissions'' (downloads and webcasts) and 75 percent of the royalty rate for ''new configurations,'' which could include mini discs, digital compact cassettes or formats not yet invented.

''If you're going out with the the intent and the motive to help unsigned bands in the year 2000, why put in the contract in the first place, 'We own all your Internet rights?''' Fagin said in an interview. ''They're afraid that in a couple of years, when a couple of major artists step out and jump ship from the major labels, that's the beginning of the end.''

Fagin believes, for example, that if Hole succeeds in getting out of its major label contract, Courtney Love might consider distributing her music herself. Billy Corgan, whose band Smashing Pumpkins just completed its contract with Virgin, is also a candidate for artist-as-Internet-capitalist, though it is also possible that the Pumpkins will return to Virgin or shop for another label.

The Rosenbergs' music attorney David Chidekel, who also represents superstar artists, said that he can often negotiate to get a band its domain name and control of its website, as well as a better advance and recording budget. However, a band that only has Farmclub's TV performance as an entrée doesn't have as much negotiating power as a band with buzz or a track record. (According to Courtney Love's manager Janet Billig, bands that have toured, have self-produced an EP and have had download sales are in a better position for a label bidding war.)

While major labels have compromised on domain name ownership and the control of websites, ''the real fight going on right now is over digital rights,'' Chidekel said. Some groups, such as Phish and They Might Be Giants, have negotiated 50/50 deals with online music retailer Emusic to sell tracks and albums, and more bands are expected to make similar deals with other online players.

But the record companies are holding to the old royalty rates by using recording contract clauses that cover all music formats--including future ones--and by claiming that it is unfair for the band to sell its music itself after the label has pumped up demand with marketing.

''From the major labels' perspective, they're not sure that the business they're in right now is going to be viable even two years from now,'' Chidekel said. ''They're saying to themselves, 'Why should we develop a brand for these artists with our money and watch the artist turn around and use some Internet company to develop a direct consumer relationship and blow us out?'

''The lawyers such as myself are saying, 'That's not fair.' It's like [the label] is coming in and saying, 'We developed your brand, and we want to own and control your touring, because without our record company, you wouldn't have a tour.' They don't do that [currently demand income from touring],'' Chidekel said. ''They tried [taking income] with merchandizing, and they were beaten back. They tried it with music publishing, and most of the labels, except for a couple, were beaten back on that--and they don't try to bundle that source of income into their recording agreements. Now they're saying, 'This is different.' And we're saying, 'No, it isn't. It's the same concept.''

But not everyone agrees. Miles Copeland, who manages Sting and also owns the Ark 21 label, defended the record companies' need to recoup their investment. ''In principle,'' he declared, ''if a record company has the job of marketing the artist's music, they have to have all rights of income from the sale of that music.... Separating out digital--I see it as bunch of hogwash. It's a bunch of lawyers and managers trying to pull a fast one on the record companies.''

He augmented his position by saying that there were cases when digital-only deals were appropriate. New artists have the right to cut one record deal with a label for physical CDs and another with a Net music company for downloads, though each deal should be worth less than an all-in-one deal. ''What you can't expect is to get the same price for half the rights,'' he said of separate deals.

But artists who already have deals signed in the vinyl or CD age, he contended, don't have the right to claim that their digital rights should be renegotiated just because the downloadable format didn't exist at the time of signing and wasn't, therefore, specifically mentioned.

There is clearly a ''digital divide'' between those negotiating new contracts for artists, whether up-and-coming or established, and technologically conservative artists who are living with deals inked before downloading existed. The former group wants to hold on to digital rights to earn more money for the act, in addition to wanting to use the Net to communicate directly with a fan community. The latter group tends to view the Net exclusively as a delivery system and argues that without videos, radio and retail marketing, downloads would drift into a cyber-void.

Most record companies officially say that they don't discuss their business deals, but in informal conversations and at industry functions, executives readily admit that all deals are negotiable, just as artists' managers claim. While they have finally embraced downloads, the labels say that their failure rate with new acts is so high that they need the digital rights for all their acts. When only one band in twenty is actually going to earn money, they don't want to give up a new source of revenue.

There are indications that the revenue split on digital rights could change, spurred on by the 50/50 standards set by digital music companies, challenged by high-profile artists who buck the system, and stimulated by venture capital firms like Idealive, which matches a band with an investor who is willing to finance an album for a few hundred thousand dollars in exchange for getting 25-30% of the recording's revenue. Record labels are just beginning to change their position, said Fagin, citing Farmclub's decision to alter the recording contract option window from 60 days to 30.

''They know that this [the Internet] gives the independent artist a voice and gives them power,'' he said. ''Our point is: Why not now? Now's a perfect time to stop accepting the 85/15 split or the 90/10 split.... Why shouldn't it be that that little by little, the contracts' first drafts start to change a little bit?''