In the 20th century, the vast majority of music you heard and bought was controlled by a small number of companies: record labels, radio stations and other dominators of the media. Artists needed them to reach the public and the public’s choice was prescribed by what these gatekeepers believed could best turn a profit. You liked it or lumped it. Now, however, a networked world is giving artists and audiences the tools to reject those companies for ever.

The arrival of illegal filesharing on Napster in 1999 changed everything: it was a collision between a new format (MP3) and a new distribution system (the internet), both of which sat outside of the control of the traditional music business. It made the first cracks in the music culture cartel and gave the underground a hotline to a global audience for the first time.

As with all utopianism, though, there were many false messiahs. MySpace presented itself as a DIY revolution for artists, but spread itself too thin – it was simultaneously an audio player, a blog, a photo gallery, a video player, a sales window and a community platform where the users were also the creators.

Other platforms learned from this and focused on doing one thing well: community (Facebook, Twitter), video (YouTube), audio (SoundCloud), sales (Bandcamp), ticketing (Songkick, Dice), self-serve distribution (TuneCore, CD Baby), alternative funding (Pledge, Patreon, Kickstarter) and so on. This decentralisation of the music industry became its reimagining as a Meccano set – where underground acts could choose the services they wanted based on their needs.

Facebook Twitter Pinterest First wave ... Napster founder Sean Fanning, pictured in 2001. Photograph: Sarah Lee/The Guardian

“After Napster, it was absolutely clear that digital technology was going to provide a platform that would allow artists to communicate with and sell directly to their fans,” says Tim Clark of management company ie:music. “If they were clever, they could forge an independent path.”

Today, the tools have ripened to the point where, if musicians build enough momentum, a record label becomes an indulgence, rather than a necessity. “Technology has democratised creativity,” says Brian Message, a partner at artist management company ATC. “The tools are in everybody’s hands to be able to create and to promote at any level.”

This is exemplified most in 2017 by Chance the Rapper – Forbes estimates he made $33m (£25m) this year without the need for a label or even to sell physical music. But, before him, the dubstep and grime scenes in the UK saw a new generation of artists using YouTube for distribution, broadcast and community.

Luke Hood set up the channel UKF on YouTube in 2009 to support and showcase drum’n’bass and dubstep. It has since diversified across genres and drawn enormous audiences along the way, with 6.1 million subscribers to its dubstep channel alone.

“YouTube was a free, easy platform that everyone was using,” he says when asked why he was drawn towards it. “A lot of acts on UKF can speak to their fans directly and establish a genuine connection that you couldn’t do before in underground music.”

Manchester grime act Bugzy Malone also built his following on YouTube. “It was definitely my main platform,” he says. “I put things out there and I took feedback from the fans. I built it from scratch so that eventually I had a formula that worked.” He now has close to a quarter of a million subscribers to his channel; his biggest video, Moving, has nearly 10m views.

YouTube allowed him to get to a level where he can work with record companies on terms he sets himself. He has a label-services deal with ADA, which offers functions such as disc manufacturing, physical and digital distribution, marketing and sales reporting.

Facebook Twitter Pinterest All the hits ... Bugzy Malone’s video for Moving has been viewed almost 10m times on YouTube.

“The guys are cool and massively helpful,” he says of ADA. “But they’re taking the lead from me and what it is that I want to do. They are there to back up the vision and be on the wagon that is already moving.”

Yet record companies still profit from deals such as Bugzy’s and take a cut of artists’ earnings. Plus, their grip on companies offering services to independent artists is getting tighter. Sony Music now fully owns distribution firm The Orchard, while, on the label-services side, Warner Music owns ADA, Universal Music owns Caroline International and Kobalt owns AWAL (Artists Without a Label). All the record labels, major and indie, have an equity stake in Spotify.

But while the teeth marks of the old music business can be found in the emerging one, there are still ways acts can remain totally independent.

Benji Rogers set up direct-to-fan platform PledgeMusic in 2009 to allow acts to pre-sell, distribute and market their music. “It turns out that direct communication makes the artist the most money,” he says. Rogers is also an early investor in SuperPhone – a supercharged communication and engagement tool built by musician Ryan Leslie, whereby all contacts and fans are managed through one phone number. “He is not in the mainstream,” says Rogers. “He is literally the definition of independent.”

Leslie was signed to Universal, but left to pursue a career where technology would give him the independence to create a new type of fan engagement that he felt the label system was too ossified to bend towards.

“Selena Gomez has 128 million Instagram followers, but she is definitely not selling 128m albums,” says Leslie of the fundamental disconnect between social media profile and sales, from where the idea for SuperPhone sprang. “What I realised is that social media connections are very weak.”

Facebook Twitter Pinterest ‘She has 128m Instagram followers, but she is definitely not selling 128m albums’ ... Selena Gomez. Photograph: Chris Polk/Getty Images

In 2013, he gave his phone number to his Twitter followers to sign them up to SuperPhone. Within six months, 35,000 people had texted the number and, of that, 33,000 had responded to an automated request for more information about themselves. The following year, he went on tour and announced it to his fan database. “We sold 40,000 tickets with no label, no manager and no PR,” he says. “All straight off SuperPhone.”

After raising $75,000 in seed funding, he opened it up to all artists, including rappers such as Lil Wayne and Cardi B. They are all vetted in advance, so that they don’t abuse the tools to spam fans, but rather use it carefully to maintain regular contact with them. “Success, in any iteration, happens at the speed of communication,” he says.

All this comes as a reaction against the three-card trick Facebook has played on users: if you have a million followers, at best 2% of your audience will stumble across your posts, unless you pay Facebook to boost them, according to research by Ogilvy.

Quick guide Five tips for staying independent in music Show Hide Think like an entrepreneur “Young aspiring artists are also aspiring entrepreneurs,” says Ryan Leslie, suggesting they find at least five key contacts for every part of their career – from lawyers and producers to video directors and graphic designers. “The top five in each category will hopefully be the nucleus that will catapult your career.” Be a digital polymath “It’s about making sure you are across as many platforms as possible and utilising all of them,” suggests Luke Hood. “No one wants to rely on one revenue stream.” Avoid sales tactics “Don’t try and sell anything to people, even music,” proposes Sephi Shapira. “Just monetise the engagement with the consumer.” Own everything “It’s one thing to license copyrights for a while, but it’s entirely another thing to give them up in perpetuity,” says Tim Clark. “It is the same thing with data.” Be outgoing – even if you don’t feel like it “You have to be tenacious,” says Brian Message. “If you are a bit of a shoegazer in your bedroom, it will be a lot tougher than being a gregarious personality who is driven.”

“Every artist you know is – in some way, shape or form – paying Facebook and Instagram to reach their fans,” argues Rogers. “What you get here is a sickness cycle. Would I build my business on Facebook? Hell, no! Because, in their business, I am the product. What is it giving me back?”

In a similar vein, social app EscapeX was set up to “decentralise social media” and give artists new levels of autonomy by putting them, rather than the major social networks, in charge of their communities. “The engagement economy is different,” argues Sephi Shapira, the company’s CEO. “It’s not really the amount of fans that you have; it’s how engaged you are and the spending power of your fans.”

Thirteen-year-old Danielle Cohn – a megastar on lip-sync video app Musical.ly, where she has more than 8 million followers – recently signed up with EscapeX to take more control of her fanbase. In the app, she has a monthly subscription option, but Shapira says this only accounts for 10% of the money she makes there. The other 90% comes from fans paying to rocket themselves up the leaderboard to be in her top-three fans, where, according to the app’s description, they will be guaranteed to “be seen by Dani Cohn” – effectively buying their way into her line of vision.

The Faustian pact of these apps and social media platforms is that musicians get data about their fans in return, but become dependent on the service in question still being in business – and relevant – six months from now. As MySpace crumbled, artists made SoundCloud the main place to upload their music. But SoundCloud is teetering on the brink of insolvency, recently laying off 40% of its staff and raising emergency funding of $170m to stay afloat. If it goes down the tubes, the underground will lose one of its biggest tools.

Facebook Twitter Pinterest ‘If it goes down the tubes, the underground will lose one of its biggest tools’ ... German songwriter Bibi Bourelly at a SoundCloud event. Photograph: Johnny Nunez/WireImage

Musician and tech activist Mat Dryhurst believes, however, that a new wave of funding and technological disruption is brewing that will finally put artists in the driving seat – moving them beyond apps and social media altogether and propping up their underground communities in perpetuity.

He laments a world “in which platforms rise and fall based, not on a lack of demand, but on a lack of ability to return profits to a small group of venture capitalists”. He argues that the cryptocurrency community – the people behind online cash such as Bitcoin – could create alternative to the ad-funded models beloved of Silicon Valley.

He suggests an “ICO” – initial coin offering – to fund a music hosting and sharing platform – a kind of cryptocurrency IPO. “It would allow for open-source utopian developers to raise significant amounts of money with an engaged user base and build something potentially revolutionary,” he says.

“It’s best thought of as crowdowning – we could distribute governance of these platforms to the people who care the most about them. In return for your contribution, you receive something of value that can be used within the ecosystem – and also potentially a portion of ownership that gives you decision-making rights.

“Royalties are possible under a cooperative model, like Resonate.is’s proposed model for more equitable streaming payments. You could also make membership and uploading entirely free in return for contributing value in other ways to the platform.” One artist making the first steps into this space is Bjork, whose new album, Utopia, can be purchased using various cryptocurrencies.

SuperPhone, EscapeX and ICO-powered platforms are early indicators of a self-sustaining 21st-century counterculture. In that world, artists own and control everything – data, copyrights, fan relationships. For now, however, they are trapped, toggling between Tin Pan Alley and Silicon Valley.