Digital distributor The Orchard filed its 10-K yesterday (go here for an easier to read press release). The company is a perfect example of the new music company: Revenues are steadily increasing, but margins are modest and the big question is when will there be enough scale to turn a profit?

Revenues increased 91% to $28.6 million for 2007. Net loss increased 26.6% to $7.6 million. Q4 revenue increased 99% to $9.9 million. The net loss for Q4 was $2.4 million. Hinting at the cost benefits of the Digital Music Group-The Orchard merger, operating expenses as a percent of revenue decreased last year to 50% from 66%.

• Total downloads sold in 2007 were 23,287,000
• The U.S. accounted for 76.6% of 2007 revenues
• iTunes accounted for 54% of revenue in 2007 and 51% in 2006. eMusic accounted for 11% and 12%.
• Mobile accounted for 10% and 5% of revenues in 2007 and 2006, respectively.
• Subscription revenue (which includes eMusic) was $3.02 million in 2007. Total subscription revenue was a shade under $5 million in 2007, meaning non-eMusic subscription revenue accounted for about 6.9% of total revenue.