Record companies are seeing a real rise in revenue from non-traditional sources, according to new figures published by the BPI.

The U.K. record industry trade body says that new revenue streams now account for 11.4% of domestic income, totaling £121.6 million ($240 million) in 2007, up 13.8% compared to the £106.9 million ($212 million) reported in 2006.

Physical and digital music sales still dominate income, generating £1.4 billion ($2.7 billion) in retail revenue and £943 million ($1.8 billion) in trade income in the U.K. in 2007.

Licensing and multiple-rights income, however, are now generating significant revenue for the industry, the report shows. New partnerships and business models have enabled labels to increase their earnings from licensing, while a broader range of artist services is also generating income.

Digital sales have increased rapidly, now accounting for around 85% of all
Top 20 singles sales. Digital formats now make up 8.6% of all U.K. record company sales income.

Digital licensing income is also increasing: on-demand streaming services on mobile and online platforms, including advertising-supported services such as We7 and Yahoo Music, saw income from new digital business models grow by 55.7%.

Synchronisation licence income from commercials, films and games continued to grow strongly in 2007, up by 20.1%. There was also a 14.8% increase in record label income collected by Phonographic Performance Ltd (PPL) from broadcast and public performance licensing.

Revenue from new multiple-rights deals, such as merchandise, touring and sponsorship deals, helped record companies increase income in this area by 16.2% in 2007.

"The core business of record companies is investing in talent, working in partnership with artists to create great music and to help to find it an audience," says BPI chief executive Geoff Taylor in a statement. "Selling CDs and digital downloads remains the main way in which we recoup that investment, but increasingly new streams of revenue are coming into the picture.

"As consumption patterns change, music companies are finding new ways to recoup the huge investments they make in music. They are using new technology to find new audiences and offer consumers more choice. Today's record business is unrecognizable to that of five years ago. Labels have rapidly evolved into digitally literate businesses that generate significant revenues through licensing."

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