Here's more proof that the transition to digital isn't making up for the losses occurring in the traditional music business .
Warner Music Group, the third largest of the four top record labels reported a net loss of $46 million for its fiscal fourth quarter. During the same period last year, Warner reported a loss of $18 million. Revenue declined 13 percent to $752 million from $867 million a year ago.
Warner, the home of such acts as Green Day and Linkin Park, reported digital revenue of $197 million or a 7.1 percent increase from the same period in 2009. Digital now accounts for a full quarter of the company's entire business.
The bad news for Warner comes as sales growth for downloads is flat. Few music services are generating any excitement with consumers. Illegal file sharing continues to thrive even after the Recording Industry Association of America, the industry's trade group, was successful at litigating popular file-sharing service LimeWire into oblivion.
Now wouldn't be a bad time for Google Music to finally make its debut. Music insiders said earlier this year that Google is hard at work on a digital music service. Google managers have discussed tying the service closely to YouTube and the company's search engine. Google may also enable users to store their music on the company's servers and access their tunes from Web-connected devices, the sources said.
Apple is also working on a streaming music service, insiders have told CNET, but nobody seems to know when that might be unveiled.
The top record companies are eager for someone to compete with Apple and hopefully instill some excitement back into digital music. Some at the labels believed Google would launch before the end of the year but my sources said recently that any launch would likely come after the start of the year.
It can't come soon enough for Warner Music or its competitors.