The following report is courtesy of Sam Williams from NYPost.com: THE SANCTUARY GROUP, a British investment firm that represents two of the tour's heavy-metal acts, will be ringing up sales as well. While traditional labels have abandoned aging metal and hair bands such as SLAYER and JUDAS PRIEST, Sanctuary sees the promise of a loyal - and lucrative - fan base. By concentrating on T-shirt sales, DVDs and concert tours, as compared to the piracy-pummeled record business, Sanctuary made $270 million in revenue last year. Sanctuary's loyalty has earned it artist kudos, and it has tripled the number of bands represented since 2000, picking up 60 new acts. At the same time, the company launched the U.K.'s largest independent record label, Sanctuary Records. "It's a very clever business model," said Numis Securities media analyst Richard Hitchcock, one of many financial fans to hold up a lighter in glowing tribute. "They are trying to capture as much value from the music value chain in a way the major labels just haven't been able to do." Company CEO Merck Mercuriadis said he's only doing what all good record labels used to do: building a lifelong relationship between bands and their core audiences. "Our focus as an industry should be to develop talent that makes music a priority for the enthusiastic listener," Mercuriadis said. "You've got an entire generation, maybe two generations of product managers in the record industry that view marketing as something you do to support radio play." Founded in 1981 by the managers of British heavy metal group IRON MAIDEN, Sanctuary has spent the last 23 years figuring out how to keep a band in touch with its core audience without the benefit of significant airplay. Turning to concerts, T-shirts, and DVDs, the company has strengthened its hand to the point that top acts now come to Sanctuary for full range of services. Three of the four headliners at this year's Ozzfest - Judas Priest, Slayer, and Slipknot - are Sanctuary-managed. The fourth - BLACK SABBATH - lets the company sell portions of its back catalog outside the U.S. As slumping music sales have forced major labels to focus their marketing efforts on a few top-selling acts, Sanctuary has cherry-picked stalwart road acts. It works with KISS (DVD distribution), METALLICA (overseas representation) and LYNYRD SKYNYRD (records). Sanctuary also scoffs at the major labels' historical focus on distribution and sales over touring and merchandising. According to the industry magazine Pollstar, North American tour grosses jumped 19 percent to $2.5 billion last year. So far, the only major concern among investors and analysts is the cost of acquiring talent. Sanctuary's debt load has more than doubled to $130 million, a number Investec analyst Malcolm Morgan would like to see reduced in the coming months as summer tour receipts roll in. "At the moment, the bears would say they're simply buying their position," Morgan said.

Found via: Hard News.