Universal Music Group increased its griphold as the largest U.S. distributor of albums with a market share increase of one percentage point to 32.3%, in the nine-month period ended Sept. 30, according to Nielsen SoundScan. Considering the declining market, that number translates into a 12.2% decline in scans. UMG's album count dropped to 108.9 million units from the 122.8 million copies it generated in the first nine months of 2006.

Sony BMG Music Entertainment, ranked No. 2, was the only distributor to lose market share this year, with its slice of the pie falling to 24.7%, versus the 26.8% it had in the first nine months of last year.

The Warner Music Group is third and growing as its marketshare year-to-date at the end of the third quarter reached 20.2%, a one percentage point increase over the 19.2% it had last year. Rounding out the rankings, the independent sector -- excluding major-owned indies like Ryko, RED, and Fontana -- finished with a 12.8% piece of the pie, up a tick from the 12.7% it had in the corresponding nine months last year. And EMI Music held steady at 10%.

In looking at the overall U.S. market, music transactions finished the third quarter with 951.3 million so far this year, a 16.8% increase from the 814.6 million counted at this point last year. That's largely due to the 612.2 million digital track downloads, which was up 46.3% from the 418.6 million downloads generated in the corresponding period last year. But album sales are down 14.2% to 337.3 million units from the 393.1 million units that were scanned in the same period last year. Within that, CD sales are down 18.5% to 300.6 million units, as compared with about 369 million units last year. But digital album downloads continue to grow, and stood at 35.8 million units, representing 10.6% of all album scans.

So far in the first nine months of 2007, 20 albums have broken the million unit milestone this year, led by Daughtry's self-titled album, which has scanned just over two million units. But that's down from the 26 titles that earned that distinction in the same period last year, when their were two multiple platinum albums, the "High School Musical Soundtrack," which stood at 3.1 million units and Rascal Flatts "Me and My Gang," with 2.5 million units.

As the album declines, digital tracks continue to rise with 26 titles breaking the million-unit mark so far this year led by Gwen Stefani's "Sweet Escape," and Fergie's "Big Girls Don't Cry." Both titles round off to 2.03 million downloads, although Stefani has the edge by 1,209 copies. Last year, at this point, only 10 track downloads had scanned more than one million units.