by Neil Shoebridge

Australian singers and music groups such as AC/DC, INXS and Kylie Minogue might have built successful careers overseas, but Australian music companies have rarely been able to follow their lead.

The British arm of Michael Gudinski's Mushroom Records generated strong sales during the second half of the 1990s with artists like Peter Andre, Garbage and Ash, but then faded away.

Now another Australian company is finding success overseas not in the hyper-competitive pop music sector, but the niche category of world music.

World music is a small business, with sales of $US250 million in 2003, or just 0.8 per cent of the $US32 billion ($44 billion) global music business. But it is growing: sales rose 2.5 per cent during 2003, compared to a 7.6 per cent decline in total global music sales.

That growth, plus the fact most large music companies ignore the world music category, is good news for Chris Murphy, the former INXS manager and rooArt Records owner, and Kerry Stokes's Seven Network.

Mr Murphy owns 64 per cent of Petrol Records, which he set up three years ago to market world-music compilation albums here and overseas.

Petrol was born from Digital One, an online music and digital radio business that Mr Murphy set up in 2000 with Seven as a shareholder. When Digital One folded, Seven became the owner of 36 per cent of Petrol.

Revenue and profit figures are not available, but Mr Murphy said Petrol was aiming for a 5 per cent share of the world music market globally by 2009.

Petrol has released 31 albums over the past three years. All of them are compilation albums, mainly featuring songs by obscure artists. Each costs between $15,000 and $25,000 to produce, compared with $250,000 or more for a local pop music album.

The albums fall into three categories: music from a specific country (such as Cuba, Brazil, India and Greece); music that reflects specific cities (Tokyo, Paris, Berlin, Melbourne), and different music genres (blues, soul, salsa, lounge, chill).

Petrol's first release, Cuba: The Greatest Songs Ever, has sold 35,000 copies in Australia, a big number for a world-music album. Other albums are also nudging the 35,000 mark including the Tokyo and Paris albums.

But Mr Murphy did not set up Petrol just to sell small quantities of albums in Australia. From day one, he struck deals with music distributors in North America, Europe and parts of Asia.

Over the past two months, Petrol albums have been launched in Virgin Megastores' United States music outlets and by Time-Life Music, one of the biggest direct marketers of music in the US. Two weeks ago, Virgin's 181 music stores in Britain took delivery of 15,000 Petrol albums, which go on sale on July 22.

Petrol's general manager, Kirsten Leigh-Pratt, said Virgin's US stores had sold 5000 copies of eight Petrol albums a month since May, and sales were expected to build as more titles were added.

The distribution deal with Time-Life could become Petrol's biggest money-spinner. Time-Life is one of the biggest retailers of music in the US: its Christian music compilation albums, for example, routinely sell more than 1 million copies each.

Ms Leigh-Pratt said Time-Life started marketing four albums from Petrol's Greatest Songs Ever series in late June and sold 30,000 copies in the first week. She said sales in the first year could be up to 500,000 copies.

Although Mr Murphy ran an online music company, Petrol's albums are only available through traditional distribution channels such as direct marketing and retail stores.

Ms Leigh-Pratt said that would change in the next few months: three companies are currently bidding for the contract to sell downloads of Petrol albums via the internet.

"The music industry is on the verge of its greatest explosion," Mr Murphy said.

"Thanks to online digital services, the baby boomers are a monster about to be reawakened. One of the biggest buyer sectors will be reintroduced to the world of music through the internet."

The booklets in Petrol's albums include information such as recipes from the music's country of origin or guides to bars, clubs, restaurants and so on in various cities.

Ms Leigh-Pratt said including that information was part of a strategy to turn Petrol into a "lifestyle brand".

In December, the company will launch a range of DVDs, which she described as "ambient images set to music". Other new products are being developed.