First off, I applaud that you play original material. It is what it is. If that is what makes the band good, then you have every right to stand up for it. Of course it gets discouraging to play in front of empty rooms all the time. It has happened to everyone playing originals (aka the artists we are covering all the time).
I really think it is time to let go of the idea that Entertainment = Covers, and Originals = Musical Ineptitude, Arrogance, being Condescending or whatever.
It is perfectly possible to be extremely inept and condescending when playing covers, and perfectly possible to be extremely entertaining when playing originals
There is no such thing of "knowing what the people want". The only thing I know is what I want, and the only thing you know is what you want. There is such a thing as "deciding for other people what they want, and then advertise/coerce them into believing that that is what they want". It is how money is made, and we all need to make a living somehow, but nothing to be proud of from a principled point of view, in my book. The only thing I do know is that I only can be convincing and communicating/committing 100% to what I try to bring across - original or cover-, if I believe in what I do.
Just a few suggestions (apologies if they were made elsewhere already)
-If you really believe in your music as it is: maybe put some serious effort into making a record and promote it properly (digital distribution is worldwide distribution). Look for some pointers if there's a scene, an area, whether close or far away, that does like what you do
-I'd consider any form of rock a theatrical and visual as much as a musical art form. As a jazz musician I'm a big fan of the Who and the MC5 live - and the stage act/visualization that came with those bands informed the musical performance and vice versa. What is your 'message' and how are you illustrating that visually/theatrically?
-If you really want to play local , maybe translate your material in a different language, if you will? For example, i found The Blind Owl Band the other day (guy is here on TB), which struck me as Black Sabbath disguised as bluegrass. Another band (here from Staten Island) are The Budos Band, which does instrumental old school hard rock-ish riffs wrapped in a African-inspired 70ties funk thing. Not necessarily the way you should do it, but how about disguising/translating your material where you can mix the familiar with the original?