This Reuters story about bands’ online activities contains an interesting bit of information: record companies are using the Internet to assess acts’ potential before signing them to traditional record contracts.

Universal Music, the world’s top music label, has begun signing untested acts such as pop artist Derek McDonald to a “digital rights” contract before committing serious money to his career.

The label starts the riskier acts with a Web site, and if enough fan interest is generated online, Universal inks them to an old-fashioned record contract.

“It acts as an incubation label, if you will,” said Rob Wells, director of new media services at Universal Music UK. “It’s the Marillion concept.”

In beginning the unscientific process of “breaking” the young musician, Universal started with a Web site for McDonald (http://www.derek-mcdonald.com), selling ringtones and offering alerts on upcoming concerts.

“I believe the future for all artist Web sites is to make them fully commercial,” Wells said.