The latest round of earnings releases by music and music-related entertainment companies was a collection of troubled performances and requests for cautious optimism. As has been the case for many quarters, these companies emphasized the positives as they ride out this downturn, rebuild and try to be well positioned for the future.

Halfway through 2009, there are a number of problems companies will need to overcome. Recorded music revenue suffers from two problems: the continued fall of CD sales (down almost 21% year over year) and a stagnation of digital download revenues (basically flat for the last five or six months).

Entertainment retailers continue to shy away from the CD, but have had uneven success shuffling their product mixes to bring in customers. As a result, expect music inventories to shrink even more as music is swapped out for other products and more under-performing stores are closed.

Publishing is the bright spot, relatively speaking. Unfortunately, its health is tied closely to that of recorded music. Promoters have been dealing well with a sour economy but have few signs a recovery will take place in the immediate future. Forecasts have gross domestic product shrinking by 2.8% in 2009 and growing between 2% and 2.8% in 2010. White House and Congressional budget officials predict the unemployment rate will top 10% by the end of this year and will worsen in 2010.

Here's a recap of recent earnings releases:

-- Warner Music Group's fiscal Q3 was a mixed bag. The company posted a net loss of $37 million on revenues of $769 million. Total revenue was down 9% while digital revenue was up 11%. However, digital revenue grew only 1.2% sequentially and publishing revenue was hit by a 21% decline in mechanical royalties. The company continued to contain costs -- SG&A was down 14% -- but free cash flow was only $11 million. A few items from WMG's earnings call are worth noting: more than half of its artist roster is not signed to multi-rights deals, WMG does not anticipate the arrival of a new physical format that will result in a transformation, and Paramore's direct-to-consumer box set edition of Brand New Eyes is outselling the standard CD version 13 to one (which hints at the opportunity that lies in direct-to-consumer sales).

-- The Orchard turned further away from profitability in Q2, in part because of costs associated with getting its physical distribution arm up and running. The company's Q2 revenue increased 12.3% to $15.06 million. Loss from operations increased 30.2% to $1.15 million and net loss increased 38.6% to $1.09 million. Gross margin rose a point to 27%. In spite of the Q2 performance, the company has a promising long-term strategy that will take more time to bear fruit.

-- Trans World has staved off disaster but has little to show for its efforts, as exemplified by its Q2 results. The entertainment retailer's total sales dropped 23% to $166 million and net loss was $17.8 million, a $2 million improvement over last year's Q2. Comp store sales dropped 15% and the company ended Q2 with 697 stores (versus 789 last year). Trans World has lowered its inventory (as it has closed stores), reduced borrowings under its line of credit, improved gross margin and lowered SG&A. All good developments, but they struggled to make a dent in the decline in revenue. Q2 comp store music sales were down 18% and CD sales dropped 23%. Music still represents a large part of the retailer's business -- 38% versus 39% last year. As of Monday afternoon, Trans World's market capitalization stood at a mere $32.3 million.

-- Entertainment retailer Hastings' Q2 was not as bad as that of Trans World. Revenues dropped 6.7% to $117 million while net loss improved slightly to $0.4 million. Music revenue dropped 15.6%, however, and video game revenue sank 20.9%. The company took a conservative approach by lowering its capital expenditures, debt and inventory.

-- Ticketmaster's Q2 had ups and downs. Revenue fell 7.1% to $355 million while net income dropped 86% to $3.1 million. Ticketing revenue sustained a big drop of 18.4% to $311 million. The artist service division had revenue of $43.1 million and operating income of $1.3 million. Losses in concerts negated gains in sports and family segments.

The loss of Live Nation volume stung Ticketmaster as the former customer accounted for 3.5 million of Ticketmaster's 3.9-million decline in ticket sales. In the Q2 earnings call, Ticketmaster emphasized increased adoption of paperless ticketing (the upcoming Miley Cyrus tour, as well as Nine Inch Nails and some Bruce Springsteen dates) and the likelihood of improved ticket sales in the future. Consumers have not taken risks, the company explained, and next year will stop putting off ticket buys.

And, of course, the company made its argument for the proposed merger with Live Nation (the Department of Justice is expected to rule on the merger in Q4). A combined company, said CEO Irving Azoff, it the "instrumental piece" in transforming the company and knocking down barriers that prevent each company from transforming alone.

Live Nation, the hopeful partner of Ticketmaster, had a mixed report as it continues to carry out its long-term strategy. A drop in revenue overshadowed cost containment measures and gains in ancillary revenue streams. Revenue was down 5.9% to $1.1 billion. The Q2 net loss was $27.2 million and the loss from continuing operations was $26.8 million.

A good gain in ticketing revenue was trumped by a 18.9% drop in International revenue. Ticket sales for future events looked good as deferred revenue increased $628 million, nearly $100 more than in Q2 2008. Total deferred revenue stood at $894 million at the end of Q2, a 14% increase. In its Q2 earnings call, Live Nation said it had sold 83% of its planned ticket sales for the year (versus 77% last year). Revenue per fan dropped to $78.16 from $81.82 (currency movements were a problem there) while North American amphitheater per-head ancillary revenue grew 3.5%.

-- Universal Music Group's Q2 earnings will be announced when Vivendi presents its H1 2009 results on Sept. 1.