Warner Music Group, the company behind Muse, REM and Nickleback, has announced losses of around $34 million. This second quarter deficit is worse than the loss of $19 million it made a year ago.

The company has blamed the lower revenue on an increase in taxes and a decrease in CD sales, as more and more music buyers migrate online for their tunes. It has also cited illegal downloads as a reason the company is losing money.

Digital downloads up

Even though the company has made a loss, its digital revenue is up a whopping 48 per cent. The digital arm of its company now accounts for just over 20 per cent of sales. This equates to around $164 million.

Warner is also gaining money on the sale of mobile ringtones but even this combined with online sales hasn’t been enough to stop the slump.

To counteract the losses, Warners has announced it is to diversify revenue streams. According to The Guardian, it is to recoup money from ticket sales, merchandising and making deals with MySpace.