When asked why, Sean Greenhalgh, the band's drummer, told CBS News correspondent Anthony Mason, "The question that we asked record companies was essentially, 'What can you do for us that we can't do for ourselves?'"
Billboard magazine made the band the poster boys of a "do-it-yourself revolution." Even million-selling artists like Jewel are considering going it alone. Garth Brooks did; so will The Eagles with their next album.
One big reason: The Internet is now doing much of the promotion & distribution work, as fans themselves spread the word and the music.
"Now you have blogs, other places where people go — that's how the publicity happens now," said Greenhalgh.
So band members hired their own manufacturer, distributor and marketing company, and instead of the $1 an album they'd typically make from a record company, they'll get about $6 for every copy they sell.
Jeff Tweedy is lead singer of the Grammy-winning band Wilco, whose new album, "Sky Blue Sky," comes next week on the Nonesuch label. But he wonders how long labels will be important.
"Technology has evened the playing field. If the artist can gain more power over the situation — over the economics of the situation — why wouldn't they take it?"
Like many artists, Tweedy admits asking himself the question: Do record labels deserve that big a cut?
And his answer? "It's getting to be a really tough call" — because the record companies aren't moving albums the way they used to. CD sales plummeted 20 percent the first three months of this year.
Empty shelves are all you'll find now at Tower Records, which until December was one of the most famous music store chains in the country. But it's now out of business, bankrupt — the abandoned display cases another unsettling sign of an industry in turmoil.
As the industry tries to figure out where the business is going, bands like Clap Your Hands believe they're better off going it alone.
"It was definitely a calculated risk," said Greenlagh, "but we felt like we had everything in place to do it ourselves."
It's not necessarily their music that's revolutionary — it's their business model.