Beck remix made it as a b-side

"And there is a chance that some of these fans will be signed to a major label as a remix artist. That is currently happening with the Depeche Mode competition," he told the BBC's Go Digital programme.

In one of the first contests at Acidplanet, a remix of a Beck single eventually became a b-side.

The site offers fans the ability to download samples from a track and then remix the loops to produce the track in a different style.

Artists warm to the net

This is increasingly seen by groups as an important way of using the web to promote their music.

If you download snippets from Crystal and play with them, you get deeper and deeper into the music and are more prone to go out and purchase the CD

Steve Foldvari, Acidplanet

"Some of the trepidation artists felt towards the internet is lessening as they receive more data that shows their CD sales have increased as people sample their music over the internet," argues Mr Foldvari.

He says this was the approach taken by New Order when they allowed fans to remix their latest single, Crystal.

"If you download snippets from Crystal and play with them, you get deeper and deeper into the music and are more prone to go out and purchase the CD," he says.

Internet hopes

Unsigned bands have turned to the internet as a way of getting noticed. Hundreds have signed up to websites that promote and distribute their material online.

Wilson: Web small part of promotion

But so far, few have made the transition into a chart-topping band.

"It was a kind of dream that everyone had that the internet was going to be so wonderful it was going to short-circuit everything and get rid of the these guys in suits in the record industry," says music mogel Tony Wilson.

"It doesn't work that way. Between 90-95% for a young band getting signed is having people talk about you - there being a buzz which you create.

"The other 10% includes sending people cassettes, trying to get a gig and the internet. But it is only part of 10%. It is not the answer to your problems," says the former boss of Factory Records.

End of free music?

Experts say the next big step in the future of music on the internet is the launch of legitimate fee-charging services. They argue the days of free music are numbered.

"It's theft; it's copyright theft; it's not paying people for what they do," says Tony Wilson.

It is our fault - the music industry's - because we haven't made stuff available on the net

Tony Wilson

Even though he is morally averse to file-sharing, he can understand why millions downloaded free music over the internet.

"It is our fault - the music industry's - because we haven't made stuff available on the net," he says.

"The record companies ran scared from this and they created Napster by not dealing with it and not providing the songs.

"Its easy availability is what will drive it forward. At the moment, we are all struggling to get payment systems that work to make this all possible."

Majors wade in

Two online subscription services from the major music companies are due to go live within the next few months.

Free and unlimited is a difficult thing to compete with

Richard Wolpert, MusicNet

MusicNet is backed by RealNetworks and AOL Time Warner, along with the music majors EMI, BMG and the big independent company Zomba.

The other, Pressplay, is jointly owned by Vivendi-Universal and Sony. But many analysts are still unconvinced about the readiness of the market to pay for music downloads.

"Free and unlimited is a difficult thing to compete with," admitted Richard Wolpert, MusicNet's strategic advisor.

Thousands of music files are still readily available to download from the internet, despite the effective shutdown of the online song-swapping service, Napster.