The question of why independent distribution was the deciding factor is a historic one. In the post-punk era, when lo-fi recording became affordable, lack of funding was no longer the obstacle to a band’s bid to be heard. DIY artists could make their own records but the issue was how to get them available and noticed. One of two major stumbling blocks for nascent artists and labels was media exposure. With a limited number of media outlets in the UK, charting was the primary way to get music on the radio or on record store shelves. Charting was seen as so essential that record companies would regularly lose money on singles as part of a larger strategy to break a band. Thus, giving music away for free or at a loss in order to introduce an artist isn’t something from the MP3 generation but a longstanding practice.
However, there used to be a more consistent return on fans purchasing albums after getting their hands on underpriced singles. There were few ways for unsigned local artists to be heard nationwide, other than through the sadly missed John Peel; the industry machine had majors manipulating the chart system and excluding the sales of speciality retailers. It was the weekly press that initially began making alternative charts (Sounds was first). Someone would call up a speciality retailer, such as Intone Records or Rough Trade, and get a list from whoever answered the phone of what they claimed their top sellers were. Not the most scientific way of putting a chart together, but one that had the intended effect of broadcasting the tastes of niche markets (or at least of the person who answered the phone).