A band that exists on in the sense of fictional works such as movies, books, and TV shows but has no real presence in the real world. So they really exist in the sense that there are real muscians and producers out there making the music but not really real. Clear as mud?
Being fictional, they are often used to directly enhance the story or themes in the fiction they are found. Sometimes a band under a fictional guise is free to take a difference stance which leads to more and better artistry. They also maybe used to poke fun too with parody.
Here is a short list of some fictional bands in no particular order and hopefully refactored and edited as time, my memory, and help from other noders permit:
ps. No matter how much you want to believe it, N'Sync and the like don't count!