(Above: Market shares by genre. Overall market in green, digital market share in purple.)

The press and investors want to see one thing from a music company: strength in digital sales. One way to look at it would be to compare a music group's U.S. digital sales as a percentage of overall sales. That's a quick and easy measure, but given that digital music's early adopters are heavily skewed toward certain music genres, such a measure can give a misleading view of a music group's success with its digital strategy.

Paul Sloan of Business 2.0 wrote an article titled "Why Warner Doesn't Need EMI" that rationalized a solo WMG because, in part, WMG's "digital sales that far outpace (those of) its rival." Sloan gave no numbers to back up the statement, and mentioned that "Warner is a leader in selling so-called bundled albums on Apple's digital music store." The only applicable stats he gave were WMG's digital revenue share versus that of EMI: 9% to 6%, respectively.

As Coolfer mentioned last week, WMG's higher digital market share can be partly explained by the very nature of its catalog. The company's two strongest labels, Atlantic and Warner Bros, are particularly strong in pop/rock and hard music. Year to date, WMG has 19.1% share of the album market, but 32.7% of the alternative album market and 25.9% of the hard music album market.

Continue reading "Behind Digital Market Shares: Some Of It Is Just Math" »