Can the Orchard ever turn the corner on profitability? Despite record-setting revenues during the recent quarter, the company is still showing losses. And, continued layoffs and cost-cutting, a pare-down that helped reduce the bleeding. During the period, the company shed $0.4 million, better than a year-ago deficit of $1.1 million Revenues grew 16 percent to $17.8 million.

Sounds manageable enough, and only a stretch from crossing into the black. The company is now selling 2.1 million tracks – up 49 percent from last year – and paid downloads ramped another 7 percent to 17.5 million units.

But the macro questions surround the sustainability of a model ultimately predicated on paid music transactions. Actually, the answer may be difficult to discern in the near future, as majority owner Dimensional Associates is now planning to take the company private. That is expected to happen during the third quarter, according to recent guidance from the company.