Restriction-free music sales soar on 7digital.com

LONDON (Reuters) - Web site 7digital.com, which has forged deals with Warner Music and other top labels to offer music downloads without anti-piracy restrictions, has quadrupled its annual sales, it said on Monday.

The music industry had relied on protection called digital rights management (DRM) to fight against illegal downloading but many labels are now offering tracks in the restriction-free MP3 format in an effort to increase digital sales.

7digital.com said it had seen a huge increase in traffic since it signed music majors Warner, EMI and independent labels to sell their music in the MP3 format.

It now expects Vivendi's Universal Music and Sony BMG, to adopt the same approach by the end of the year.

"It is now clear that MP3 downloads represent the future for digital music," Chief Executive Ben Drury said. "With two of the four major labels now supporting MP3 in the UK, we expect to see the whole market supporting MP3 in the not-too-distant future".

The group said site traffic had risen 130 percent since January and sales increased more than 300 percent year-on-year to June 2008.

Drury told Reuters they had also seen an increase in album sales for MP3 catalogue.

Music groups are desperate to boost sales of digital music following the drop in physical sales such as CDs and the impact of piracy.

Analysts also expect the move to MP3 to open up the digital market to more competition against the likes of Apple's iTunes which dominates the market.