April 3, 2008 / 11:12 PM / in 9 years

Universal extends music market share: report

LONDON (Reuters) - Amy Winehouse and Mika helped Universal Music extend its dominance of the recorded music sector in 2007, taking its share of the market to almost 30 percent, according to new research.

The global recorded music market consists of hundreds of independent labels and four major groups -- Universal, Sony BMG, Warner and EMI -- which have all been hit by the move to digital sales and piracy in recent years.

According to the Informa Telecoms and Media publication Music & Copyright, Universal continued its strong success in 2007, dominating both the recorded and music publishing sectors.

It grew its market share of the recorded music market to 28.8 percent from 25.7 in 2006. Sony BMG was second with 20.1 percent, ahead of Warner at 14.4 percent and EMI with 10.9.

EMI was hit particularly hard by the changes in the industry but it also struggled in 2007 with a poor release schedule.

The group, which is home to Coldplay and The Beatles, was taken over by Terra Firma last year in a 2.4 billion pound ($4.8 billion) deal.

The editor of the respected Music & Copyright, Phil Hardy, questioned whether it was healthy to have one group dominating both music divisions.

“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,” he said in the report.

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, Principal Music Analyst at Informa. “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.”

In music publishing, Universal had 22.2 percent of the market, ahead of EMI at 19.8 percent. Warner Chappell had 14.8 percent and Sony/ATV had 7.4 percent. The independents made up 35.8 percent of the market.

Reporting by Kate Holton; editing by Elaine Hardcastle

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