June 30, 2008 / 3:44 PM / 10 years ago

Major labels benefit from non-music sales: report

LONDON (Reuters) - British record companies saw revenues from non-music sales rise sharply in 2007, partly compensating for declining recorded music sales, a report said on Monday.

Chris Martin of British band Coldplay performs during a concert, part of the "Viva la vida" tour, in Barcelona June 17, 2008. REUTERS/Albert Gea

The BPI (British Phonographic Industry), which represents the country’s recorded music business, said non-music sales increased by 13.8 percent in 2007 to 121.6 million pounds ($242 million) from 106.9 million in 2006.

The growth reflected the expansion in the use of music in advertising, film and video games and from merchandising, touring and sponsorship deals, the BPI said.

Although physical and digital music sales account for the vast bulk of labels’ revenues (1.4 billion pounds in 2007), “there are encouraging signs that these new revenue streams will contribute substantial additional revenue in years to come.”

The shift away from recorded music sales, which are struggling to cope with online piracy and alternative choices like video games, has encouraged some of the world’s biggest pop stars to sign all-encompassing contracts.

The “360 degree deals” cover all aspects of the business rather than just new music, and when Madonna left label Warner Music Group to sign such a deal with tour promoter Live Nation last year industry experts expected others to follow suit.

U.S. singer Prince gave away an album for free with a British Sunday newspaper last year in a move designed to promote his extended tour, while Coldplay recently allowed people to download a single from their new album at no cost.

“Today’s record business is unrecognizable to that of five years ago,” said BPI chief executive Geoff Taylor. “Labels have rapidly evolved into digitally literate businesses that generate significant revenues through licensing.”

The global recorded music market consists of hundreds of independent labels and four major groups — Universal, Sony BMG, Warner and EMI.

(Editing by Keith Weir)

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