It is true. As much as any other industry, the music industry is entirely about connections and who you know. This is an interesting article about the biggest new pop music station in the UK, and how they go about dealing with playlisting (effectively choosing who gets to 'make it')[0].

Especially at large UK festivals like Glastonbury with a broad appeal, it's the acts that are playlisted on BBC that will be playing the festivals. It's not just that that's where the audience is, but it's the echo chamber effect caused by the fact that that's where the industry's ears are, from the pluggers, to the PR men to the festival organisers.

The funny thing is that in my experience this pattern even holds true for niche scenes like math/post rock or metal, just with a different centralized power broker (be it a label, radio station, magazine or booker).

Like tech startups that are beholden to the VCs because they're capital starved at an early stage, the speculative nature of music (I think) is why power tends to accumulate in the places where influence and capital lie.

[0]http://www.theguardian.com/media/2014/may/25/radio-1-playlis...