Ya, the industry has changed. Demo is old. Record companies don't really do development deals anymore. They want you polished,to have fans, manager, your company set up, budget, and hits ready to go. No more half ready and prospects.
And the demos now a days have to be almost album ready sound wise.
You need a music lawyer, manager, or have good ties with an A&R. And even with all that it's hard. Just do what you do! Grind on the streets. Get a buzz. Get tracks played in clubs. Get on the radio. Advertise on web and other outlets. The A&R are bound to see you and hear the buzz.
Get your product in the hand of every opportunity you see. Sooner or later you have to get a connection from someone...
I remember I met this one A&R and he had boxes of demo CD's. He said he doesn't even look at all of them because it would take at lease a year! So, if you send in your demo, just remember you might not hear back from an A&R. Doesn't mean your stuff is weak, just means they haven't heard it...