I just thought last.fm was just a site that keeps track of everyone's listening habits, via "scrobbling", and then makes recommendations based on what you're listening to. I didn't realize bands would get money for having their music scrobbled.

And Sean, I understand your point with band pages on the web, where content is supplied by fans but it is usually meant with good intention and the information put out there becomes more and more reliable over time. Take for instance, the metal-archives website, a site that serves as an online encyclopedia for metal music -I can consider this to be an excellent source for information. The vast majority of bands I listen to aren't that involved in online matters so if it wasn't for the fans, a lot of these bands would go unnoticed. 

But regarding last.fm, in the past I have tried to clean up some artist pages and fix album information for various bands but it's incredibly difficult on last.fm. Band profiles can be written up easily enough, but they have a very bizarre means of getting album information. I seem to recall that they get it from a particular website that for whatever reason, they view as a valid source, but is full is full or errors and difficult for people to edit - I gave up on trying a long time ago. Many of the bands I listen to have no albums listed on last.fm as a result, and last.fm is unable to differentiate between artists with the same name, so things aren't being properly scrobbled and I assume most bands aren't being compensated at all.