Digital Music Group, the most recent digital music-related company to go public with its February initial public offering (IPO), posted both a quarterly and annual loss today but did see major gains in both revenue and downloads over prior periods.

For the quarter ended 2004, the Sacramento-based startup, which buys the digital rights to oldies, rarities, and out-of-print recordings and licenses them to online stores like iTunes, posted a loss of $402,000, a small improvement over a loss of $467,000 for the same period in 2004. The company has rights to sell more than 200,000 music recordings in digital format, and has 65,000 tracks currently for sale through download services. Its top 50 sales list includes artists like Fats Domino, Chuck Berry, and Bobby Rydell.

For all of 2005, the company lost $1.69 million, or 36 cents per share, for the year ended December 31, compared to a loss of $767,000, or 16 cents per share, in 2004.

But given that the company was barely in business a year ago, it did see substantial gains in both overall revenue and downloads through the major paid services.

Digital Music Group reported revenue of almost $1.06 million last year, up from just $73,000 in 2004. For the fourth quarter, the company had sales of $597,000, up from $49,000 for the same period a year ago.

Likewise, users of iTunes and the like downloaded Digital Music Group tracks 873,500 times in the fourth quarter, a monumental leap from the 76,800 downloads in the same period in 2004. That mark was also a sharp improvement over 367,400 downloads in the third quarter--a 138 percent increase.

"The increase in downloads was primarily driven by the delivery of additional tracks to online music stores and the rapidly increasing popularity of digital music with consumers," company cofounder and CEO Mitchell Koulouris said in a conference call.

The news sent shares in the company, which completed its IPO February 7, up 20 cents to $9.50 on the day.

iTunes continues the be the dominant revenue stream for the company at 87 percent, down slightly from 93 percent in 2004.

In a separate announcement, the company said its hired Karen Davis, former chief financial officer of TASQ Technology Inc., a subsidiary of First Data Corp., as its CFO. She replaces Clifford Haigler, who will serve as a consultant with the company after March 31.