"Glee" brings joy to beleaguered music industry

By Jill Serjeant

LOS ANGELES (Reuters) - Its characters may feel like a bunch of unloved high-school misfits, but the quirky musical TV comedy "Glee" is putting smiles on the faces of music industry executives searching for new revenue in an era of plunging album sales.

Two months into the 2009-10 TV season, "Glee" is drawing a weekly audience of 8.6 million viewers to the Fox television network. Fans have bought more than two million tunes sung by the show's cast on iTunes, and soundtracks are being compiled and sold in traditional stores.

Revenues are being split among Fox and the record company, and artists and music publishers are being paid licensing fees for songs "Glee" uses in musical numbers in each episode.

"Record labels have been desperate for new revenue," said Steve Knopper, contributing editor for Rolling Stone magazine. "They are trying to figure out any way to make money and one pretty reliable way is to sync up with a hot TV show."

That's exactly what Sony Music Entertainment's Columbia Records did last January when the Fox network shopped a pilot of "Glee" to record labels months before it aired.

Columbia won the deal to partner with News Corp's Fox on the release of all "Glee" music on Apple Corp's iTunes, as well as on traditional soundtrack albums.

Columbia also has broad "360" deals -- all-encompassing agreements -- with the previously unknown actors playing the "Glee" kids. The deals cover first rights to recording contracts, and a percentage of earnings from concert revenue, endorsements, merchandising and ringtones.