Even if startups were disrupting this space - and there are some - the fact that artists have to pay producers up front etc is a challenge for them to overcome and record labels at the moment are a very good solution for this.
I mean even Jamal Edwards (the founder of SB:TV – http://www.sbtv.com – he's used as part of Google Chrome advertising in the UK - http://www.youtube.com/watch?v=0cKpvwlSGOI and even he has launched a Record Label albeit with Sony - http://www.rwdmag.com/2011/02/sb-tv-founder-jamal-edwards-si... and he was kind of disrupting the music industry by promoting artists that you may previously never of heard of. (For instance, I first heard about Ed Sheeran - before he became famous and gone on to release numerous hits - through SB:TV's YouTube Channel)
Some music startups specifically covering what you said in the text area are the likes of:
http://soundcloud.com/ - Although Music Labels are often on there contacting users.
MegaUpload were planning on launching MegaBox/MegaKey before, all the stuff with them happened as well - which was to help unsigned artists/artists sell their music and keep 90% of earnings and to pay them for FREE downloads.
There are a few others as well but, I can't really remember them off the top of my head.
However, with regards to "disrupting the music industry" other interesting music startups to make a note of - and I’ve probably missed a load out since I’m just recalling them from what I can remember - as well as the obvious choices of Rdio, Grooveshark, MOG, Spotify, Pandora, Shazam and Last.fm (can they still be called a startup?!) etc and the ones listed above include:
http://www.playgroundsessions.com
There are tons more but these are just a few I can remember off the top of my head with regards to disrupting the music industry as a whole, and with regards to your specific question.