As it goes for electronic music demos I think that at least on trance scene where 99% producers sound alike (they do, no arguments on this one) the key is to attract attention or make friends with people who have contacts on "higher levels". For example giving your tracks to DJ's who then might give those tracks to other DJ's and eventually it attracts attention of the record companies.
But if you think that your music is different than the other lot (or your music is not DJ oriented), send demos. I think that if you have personal sound and have something special in your music, you're very likely going to get a record contract through demos.
I bet that all bigger companies get loads of demos that sound alike. As the rule of any kind of demo recording is that if it doesn't attract listener's interest less than in minute, it's thrown away and forgotten. If you get about twenty demo CD's a day you really don't have time to listen to them all completely. Other thing is that most of the demos aren't listened at all. Why's that? Because of the cover. If your demo looks like it's made in two minutes (burning included) it's not very attracting. Make good covers. Spend time on your demo. Show that you have taken trouble to make the demo.
Another effective way is to show the record company fellows that you want a record contract. If you have a live act or you're DJ'ing your own stuff send them a letter (not e-mail, a real letter) and ask them to see your live performance. This of course requires that the event is near the record company people. For example calling people from UK to see your live set in Bulgaria isn't a good idea.
In a nutshell that's what I'd do.
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