When a site starts up, they don't need to go cut individual deals and setup the transfer technology with every label and artist. They can approach a few companies like the one I worked for, write a plugin and get a huge amount of content right away. The labels don't want to monitor every site that starts up and send content and handle royalties. They could set usage rules and the content would be sent to the appropriate sites.
Once sites get huge like iTunes, they cut their own deals with the major labels. But without services like this there is no way small artists and music sites could ever survive, it would be far too time consuming.