Universal Music International chairman and CEO Lucian Grainge gave an optimistic keynote address at the BPI's annual general meeting in London, as the U.K. trade body issued figures showing an increase of 7% year-on-year for record company revenues from outside traditional unit sales.

The BPI said that U.K. record labels' revenue from sources beyond traditional retail sales - including licensing of recordings to third parties and multiple-rights income such as touring and merchandising - totaled £195 million ($315 million) in 2008. This was up 7% from the £182 million ($294 million) in 2007.

These additional revenues have shown a second consecutive year of growth and now account for 18% of record companies' domestic income, the BPI said.

"Although selling CDs and digital downloads remains at the core of record company investment and revenues, licensing of innovative business models is helping new, significant revenue streams flourish," said BPI Chief Executive Geoff Taylor in a statement.

This chimed with Grainge's keynote at the Mayfair Hotel, in which he urged the fellow BPI members in the audience to "stop this spiral of negativity" that surrounds the biz and described music delivery via the Internet as "the greatest opportunity of my entire career."

He also cautioned against the industry getting bogged down in legal action or lobbying, when it could be finding partners for new business models.

Describing the industry as being at the "most significant crossroads in its long history," he added that "not enough is being done to protect British talent."

Although mindful of the daily moment of fear that consumers "don't like what we create or if they do they will steal it," Grainge said his main concern was protecting and investing in new talent

"Should we be focusing so much of our attention on how to accommodate these new business models of distribution?" he asked, stressing that talent is the "heartbeat" of the industry and that he wanted to discover "the next Blur, the next Oasis." He also expressed concern that not focusing on new talent could mean the next generation of potential music stars ends up as "bus boys, beauticians and bureaucrats" because they never got the support of a record label.

Although Grainge accepted the need for a "dual process" to defend labels repertoire from any infringement or exploitation alongside the development of talent, he said the industry must avoid getting "stuck in a swamp of legislative debate" and that he wouldn't allow it to be "destroyed by inaction."

"Progress must be made not only by our lawyers and lobbyists but by everyone in this room," said Grainge.

"I refuse to accept that we are sitting around trying to defend an old business model," he added, citing deals with new services such as Spotify and Nokia Comes With Music and the proposed unlimited MP3 service from Virgin Media. "We have to start talking to companies outside our industry."

"The role of the record company has never been more important than now," said Grainge, as he spelled out the need to support talent and pursue global digital distribution methods that consumers want.

Digital licensing, which includes income from ad-supported models such as Spotify and We7 as well as bundled subscriptions like Comes With Music, showed the biggest growth in 2008 according to the BPI. Revenue from these services more than quadrupled in a year to £13.8 million ($22.3 million).

Broadcasting and public performance licensing collection from licensing body PPL was up 7% year-on-year, bringing in £78.7 million ($127.1 million) of income for labels - 40% of the overall licensing total.

Artist-related income from multiple-rights deals amounted to £49.9 million ($80.6 million) for labels in 2008. The BPI did not supply a 2007 figure.

However, synchronisation license income declined from £23.4 million ($37.8 million) in 2007 to £20.7 million ($33.4 million) in 2008, although the BPI said this reflects broader economic pressures facing the U.K. advertising industry.

The bulk of record companies' income is still represented by physical and digital unit sales, according to the BPI, with a total of £1.3 billion ($2.1 billion) in retail revenue in the U.K. during 2008.

Meanwhile, the BPI AGM elected four unopposed designated major representatives for the BPI Council. They are John Reid, CEO, Warner Music U.K. and Europe and vice-chairman Warner Music International; David Joseph, chairman and CEO of Universal Music U.K.; Max Lousada, president of Atlantic Records U.K.; and Nick Gatfield, EMI's president of new music for North America and the U.K./Ireland.

The three elected designated independent representatives are: Dramatico Entertainment chairman Mike Batt, First Night Records managing director John Craig and Infectious Records founder/owner Korda Marshall.