Sanders and others in the industry have come to realize that XM and Sirius, both of which have teetered near bankruptcy, now combine to reach a national audience of more than 2 million listeners.
"It took us a minute to say, 'Wow. Okay. There really is something here," Sanders said. "None of us knew what [satellite radio] was other than a couple of dishes floating around in the universe. Now, it's 'Wow -- they have an impact on sales.' "
The New Zealand group Steriogram was signed by Capitol Records based on a homemade demo CD and a video.
Sirius, has two ways to help unsigned bands get major label deals.
As with XM, unsigned bands can submit their CDs to Sirius for play. If selected, instead of being played on one channel, Sirius plays the unsigned bands on the music-format channel each fits best.
Sirius also has something called the Working Artists Group ("WAG"; Sirius's logo is a dog.), which invites unsigned bands into Sirius's Rockefeller Center studios to record songs free -- up to an entire CD's worth. The band can shop the demo CD to record labels. If they get a deal, Sirius gets a cut of the band's contract for a specified time.
In the past, record labels would spend thousands of dollars to get a new song on big radio stations, paying independent promoters, or "indies," who gave much of that money to a radio station's promotion budget in exchange for, they hoped, putting the label's new song in the station's airplay rotation. Critics call the system legalized payola.
"The big radio promotion budgets of yesteryear are gone," said Bill Burrs, vice president of rock music for RCA, the man in charge of getting the label's artists, such as stellastarr*, on radio. "Before, you could just load the gun and shoot. But no one's spending $200,000 or $300,000 to blow out a single anymore."
Some such promotion still goes on, but record companies no longer have as much money to throw around, and radio stations are more reluctant to play songs from artists who are not proven hit-makers, because their research shows that listeners mainly want to hear artists they know. Unfamiliar artists cause most listeners to switch stations, and each lost rating point at a radio station translates into lost advertising revenue.
"As much as people say, 'We'd love to hear new music and local music,' whenever anybody's attempted that in the past couple of years, we've fallen flat on our faces in the ratings," said Joe Bevilacqua, operations director of Washington rock station WWDC (101.1 FM), owned by Clear Channel Communications Inc. "Putting too much unfamiliar music together is dangerous."
Unsigned bands have an even tougher time cracking the big over-the-air radio stations such as WHFS and WWDC.
"Other than localized specialty shows, it's pretty tough if not impossible to get any commercial airplay," Burrs said. "And those [unsigned bands] shows are typically Sunday night from 11 p.m. to midnight."
WWDC has such a one-hour show, "Local Licks," that airs on Sunday nights at 10 p.m. Bevilacqua said he plays some local unsigned bands as often as he can, but there is a chicken-and-egg problem: The bands must prove that they consistently can draw concert crowds and have a CD -- even homemade -- that can be bought somewhere.
"There's nothing like a major commercial radio station getting behind a band and giving them the push," Bevilacqua said. "People say, 'Well, that never happens anymore now with corporate radio.' I disagree to a point. You can't just pick every local band that comes out and say, 'Okay, I'm going to throw them into regular rotation.' "