DMGI - Digital Music sales up, losses down
Thursday August 10, 8:40 pm ET
Driven in part by a larger library of music available for sale, Sacramento-based Digital Music Group Inc. racked up second-quarter revenue of $840,000, more than 15 times the revenue it posted in the year-earlier period.
Even considering the second-quarter 2005 revenue of all three businesses that were combined early this year when Digital Music Group went public, revenue still rose nearly sevenfold, from $123,000.
The company still lost money, however. The net loss for the quarter was $589,000, or 7 cents per share, compared with $384,000, or 17 cents a share, in the same part of 2005. The pro forma loss for all three businesses in the year-earlier period would have been $418,000, or 9 cents per share.
Shares (Nasdaq: DMGI - News) closed at $5.80 Thursday, up 70 cents over Wednesday's closing price. The quarterly results were released after the market closed.
Digital Music Group, based in Sacramento, buys digital rights to music and musical video content and provides it in digital form for downloading through outlets such as Apple Computer Inc.'s iTunes Music Store. There were 1.1 million paid downloads of the company's music recordings during the quarter, a five-fold increase year-over-year.
Average tracks available for sale rose to 69,700 in the second quarter compared to 46,000 in the first quarter of this year, and 8,300 during second-quarter 2005. Revenue associated with the increase in tracks was partially offset by a decline in the average monthly download rate per track -- 5.3 times compared to 8.3 times in last year's second quarter -- the company said. The decline was due in part to a decrease in the rate of downloads from the company's best-performing catalog, which contains a large number of holiday songs and tribute albums.
Published August 10, 2006 by the Sacramento Business Journal
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