Remember how the internet was supposed to be a magic bullet to good bands passed over by major labels? It was the promise of direct distribution, control over your fate, and best of all, no jerk in a suit telling you how to rock and how to roll. Depending on the web tools you use, that still holds true unless revenue is your measuring stick. Suddenly lame looking MySpace is still a viable option, though it is in decline. Facebook lacks proper music-related tools but musicians are finding ways to make it happen, using sites like Reverb Nation, which tie in okay to the Facebook universe. But what about radio?

We lost terrestrial radio to corporate Clear Channel and their stupid Aerosmith fetish. Satellite Radio is an option, but don’t expect to break there if you are a new band. Internet radio—makes total sense—has an indie edge and a feel for the new and emerging generations of both listeners and musicians. In the land of internet radio, Europe’s Spotify is quite hot, and for good reason—it is like iTunes, only the songs stream from a server instead of your hard drive. That means songs are on demand and free (with ads, which you make go away for a few quid). On demand tune-age is something Slacker and Pandora and most of the others lack unless you go to the contaminated waters of peer-to-peer. Spotify is gearing up to launch in the States, and it will be big, no doubt.

Another cool thing about Spotify and other internet radio services is that indie bands can use them to get their music out there, often played in between better-known bands of the same genre. As a listener, internet radio is a godsend for discovering new music. As a band, well, if you expect to make money, you could be sadly disappointed. A recent post by well-known British musician, producer, and indie label owner Steve Hillage pretty much says it all: “Our label has now had some quarterly accounts for some of our titles on Spotify: Number of plays: 33983; Income $6.70. Yes, that’s six dollars and seventy cents for thirty-three thousand nine hundred and eighty three plays. That’s only a bit more than we earn from the sale of one CD!”

Ouch.

Granted, Steve could do far better on iTunes though his acts may languish in obscurity due to how iTunes catalogs their vast library. And Spotify does seem to have the most smoking UI out there right now (sort of what iTunes should have become). But they have also touted themselves as possessing an artist-supportive business model. In the same post, Steve compares Spotify to other internet radio outlets:

Deezer pays per play $0.005—25 times greater than Spotify

Slacker pays per play $0,00224—11 times greater than Spotify

Last Fm pays per play $0.00766—39 times greater than Spotify

Lala pays per play $0.00688—35 times greater than Spotify

Rhapsody pays per play $0.01655—84 times greater than Spotify

Medianet pays per play $0.03499—178 times greater than Spotify

Napster pays per play $0.04296—218 times greater than Spotify

Granted, these numbers are unverified, but they have so far stood up to scrutiny by Spotify and others who are not happy about Steve’s very public gripe. (To witness and join in on the fun on this public debate go here.)

With Spotify still arranging licenses for the US market, this issue is largely ignored stateside. In fact, the most recent article I read about Spotify was in Wired magazine and it was entitled: Locking Music to ISPs could Earn ISPs millions of dollars. The story contained not a single sentence about how artists fit or feel about such a model.

Meet the new boss…