An SEC filing related to the merger of The Orchard with Digital Music Group reveals two digital music distributors loosing money. (SEC) In 2006 The Orchard, which as a private company did not have reveal financial details, had a net loss of $5.97 million on revenue of $14.9 million for an accumulated loss of $16.5 million.
Can two losers combine to make a winner or is this just an investment shell game?
DMG does not have a very impressive catalog for a publicly traded company and often seemed to overpay to get it. Much of The Orchard's business model is based on higher than industry standard distribution fees at a time when competitors are slashing commissions.
How can "combined cost savings" cure those ills?