Universal Increases Market Share

Despite Universal Music reporting that illegal downloading and a weakened dollar were behind a 7.1 percent drop in profits for 2007, the world’s largest music company has increased its market share from 25.7 percent to 28.8 percent.

The French-based company dominated both the recorded and music publishing sectors, according to Informa Telecoms and Media publication Music & Copyright.

The purchase of BMG Music Publishing has helped it break the stranglehold that EMI and Warner Chappell have held over the publishing market.

It has 22.2 percent of the market, ahead of EMI at 19.8 percent, Warner Chappell at 14.8 percent and Sony/ATV at 11.6 percent. The independents collectively have more than a third of the market.

The recorded music market shrank 10 percent to about $17.6 billion in 2007, the eighth straight drop and the biggest since sales peaked in 1999. The figures suggest Universal still isn’t hurting as much as some of its rivals.

The second-most successful of the majors was Sony-BMG, which had 20.1 percent, ahead of Warner at 14.4 percent and EMI with 10.9.

"Because this dominance is even stronger in current releases, it has led to concern that UMG’s size is a destabilizing influence in what remains a declining market," Music & Copyright editor Phil Hardy wrote in a report on the figures, questioning whether it was healthy to have one group dominating both music divisions.

Hardy said the trade value of physical and digital recorded music sales fell 8.3 percent in 2007 to $18.9 billion.

Of that, digital sales rose to $2.9 billion from $2.1 billion in 2006, equivalent to slightly less than 15 percent of total sales.

"Any hope of digital making up for the downturn of physical sales anytime soon has now gone," said Simon Dyson, Informa’s principal music analyst.

"We’re in the middle of a massive realignment in the music industry which is likely to end with an industry worth considerably less than it was just 10 years ago."