Go to any little venue in NYC and you'll find a dozen talented musicians, many of them with very well produced albums already; the talent is there, the production is cheap as hell these days, it's simple. So you start an online label, you aggregate this content, you make it available in various forms for various prices (including free) and you have... nothing. Content is worthless without eyes and ears.
The hard part in all this is getting it in front of users, and getting them to care about the music. The major labels are fantastic at this: they get radio stations (which they control) to hype them up; they run ads all over the place; they put on massive tours and make the consumers a 'part of the music'. How are you going to compete with this? If you can answer that question, you win; nothing else matters.