Who would have thought that eight men and women, each wielding a simple four-string instrument, might be the ones to discover a new paradigm for the music industry?

The Ukulele Orchestra of Great Britain (a knowingly grandiose title) have no deal with a record label, and have hardly ever, to my knowledge, appeared on mainstream British TV. Yet, at the weekend, their world tour came to London with a concert at the Royal Albert Hall, and the arena where Nureyev once danced and Dylan sang echoed to the feelgood sound of the ukulele. This was not just a sell-out concert: the tickets all went very shortly after going on sale, and, from Mönchengladbach to Melbourne, this unlikely troupe of musical heroes fills large theatres with adoring fans.

So how do they do it, this band with no recording contract? The Ukulele Orchestra have been going for 27 years, and they seem to have worked out pretty early on that they could make a good living as a live act. What's more, instead of seeking a deal with an established label, they'd publish their own records themselves. They took to the road, cut out the middle man and, in so doing, were unwitting pioneers for a strategy that many see as an answer for the challenges of the digital age.

Curiously, the internet has been the Ukulele Orchestra's friend. They are one of the big hits on YouTube – go see their rendition of the Sex Pistols' “Anarchy in the UK” immediately - and, although they may profess to be bitter about the public downloading their entire back catalogue for free, there's little doubt that this is the channel through which their popularity has been funnelled.

The Albert Hall audience was good-humoured and middle-aged, and seemed to cover a wide demographic. I know the editor of The Times is fan of the orchestra, and I happened to sit next to a giant of British publishing, but the ukulele is a very democratic instrument – cheap to buy and relatively easy to learn – and this was a crowd with as little pretension as the uke itself. They revelled in the virtuosity of the orchestra, who were equally at home adapting Paganini or Black Sabbath, and the highlight was an extraordinary ukulele mash-up which involved Handel, Gloria Gaynor, Cat Stevens and the Eagles.

In a controversial ending to the concert, George Hinchliffe, the orchestra's leader, used the F-word. In this context, however, that means George Formby. And heaven knows what devotees of the Lancashire troubadour would make of the orchestra's parodic version of “Leaning on a Lamp Post”, played in the style of a band from Soviet Russia. It was brilliantly realised, and had all the hallmarks of the Ukulele Orchestra: humour, ingenuity and outstanding musical aplomb. It made me want to take up the ukulele again. But that's another story...