technically it's supposed to represent any band that's doing it on their own... being completely independent from a major record label... mind you just like alternative the word has been used enough to get some marketing definition...
seems like to be a REAL indie your music has to be lo-fi... you can't wear nice clothes... you need to have 'intellectual' lyrics... just about anything you do has to be done in the name of 'art'... and you have to do as much as you absolutely can on your own because getting someone to help makes you less indie than me...
