About a month ago I posted a graph that showed EMI's year-to-date market shares for digital albums and CDs. The cumulative figures showed EMI's digital market share had increased in the month after the company dropped DRM at iTunes.

Over the last two months, EMI's overall market share dropped 1.7%. An encouraging sign for its digital strategy? For the most part, yes. It appears that EMI would have fared worse over the last two months without gains from its digital strategy.

To properly look at how the strategy is working, it's best to look at EMI's numbers versus the market shares of the other majors. The above graph shows EMI and Sony BMG have lost market share over the last two months while Universal Music Group and Warner Music Group have increased their market shares. The other striking thing here is that the change in digital, CD, total album and digital tracks market shares of all three of EMI's competitors go in the same direction. That is to say that if Sony BMG's CD share dropped, so did its digital album and digital track share, and if UMG's digital share increased, so did its other shares.

Let's look at album market shares. EMI has increased its digital album market share by 5% in the last two months, but its CD share has dropped 2.6%. EMI's total market share -- including all other formats -- has dropped 1.7%. Note that CD and digital are going in the opposite directions. Also note that the end result, the total change, is negative. EMI and iTunes have been able to get people to buy more digital albums, but total market share has dropped. Is this because of a CD-for-digital substitution or because EMI's releases were relatively weak compared to those of its competitors?

EMI's June/July release schedule was not strong. EMI has barely been in the Top 40 over the last two months. New releases by Interpol, Korn, Now 24 have landed in the Top 40. Most of EMI's best-selling albums are holdovers like Corrine Bailey Rae and Norah Jones below #50. The light schedule could explain a good portion of the decline in overall market share, but why didn't EMI's digital track share go up? Even after giving consumers a DRM-free option, EMI's share of digital track sales actually dropped 1.4% in June and July.

The difference in digital album and track market shares can best be explained by the differences in pricing. Album purchasers are more drawn to unprotected downloads than are track purchasers. That is probably because DRM-free tracks' higher price of $1.29. DRM-free albums cost the same as protected albums. Both have the old, standard $9.99 price tag. Consumers may view $9.99 for a DRM-free album as a better value, and so they are buying more. But $1.29 for a DRM-free track? Consumers appear not to see a similar increase in value. Given the weak release schedule, though, it's hard to read too much into the decrease in digital track share. With stronger new releases, EMI's digital track share could easily have increased. Slightly fewer tracks sold at a higher average price could lead to an increase in overall revenue, so a drop isn't all that bad.

Sony BMG has fared even worse and reflects what EMI's market shares would be in the absence of an improved digital album share. Its overall album share dropped 2.8% and its digital track share sank 1.6% When all three drop in tandem, that tells me the company's release schedule is the prime reason, not a change in strategy. Relatively weak releases will lower market share while a stronger release schedule will increase market share. Because their three shares rose in tandem, UMG and WMG market shares appear to be related to their release schedules as well.

Is EMI's increase in digital album market a short-lived burst of consumer enthusiasm, the result of shrewd marketing or an indication that its overall strategy will pay off? It's just too early to tell. The publicity surrounding EMI's DRM-free downloads has surely had a a positive impact. My gut tells me the gain in album market share is not a short-lived burst, but a good thing won't go unnoticed by EMI's competitors. A competitive advantage like this can dry up quickly.