I realize it's a complicated question, and that Spotify (or Apple, or any other company we love) couldn't just jump straight in and be an instant success. And while Apple certainly has the cash to cover upfront costs, staffing up, etc, Spotify probably doesn't, at least at large scale.

Are there cases where it would work, though? Bands that stumble upon internet fame are still the exception, but they exist, and it seems like they benefit much less from the visibility and other perks that traditional labels offer. Could a band like OK Go (back in their early days of YouTube success) be better off going directly through a distributor like Spotify, getting less up front, and getting a bigger revenue share? I know a couple of years ago they jumped from EMI (http://okgo.net/2010/03/10/onwards-and-upwards/). Maybe they could have done so earlier?