Digital Music Group Announces Long-Term Distribution Agreement With Lobster Records

Digital Music Group Announces Long-Term Distribution Agreement With Lobster Records

SACRAMENTO, Calif., May 10 /PRNewswire-FirstCall/ -- Digital Music Group, Inc. (NASDAQ:DMGI), a content owner and distributor of digital music recordings focused on past-hits, out-of-print, back catalog, and independent label recordings, today announced that it has entered into a long-term distribution agreement with Lobster Records, a California-based independent label, whose catalog includes albums from Capitol Records recording artist Yellowcard. Under the terms of the distribution agreement, DMGI will distribute Lobster Records' catalog to online music stores worldwide on an exclusive basis for a five-year period. Previously, DMGI had a short-term digital distribution agreement with Lobster Records.

Expanding Lobster Records' Audience

The Lobster Records catalog will continue to be integrated into the Digital Music Group distribution network and be delivered to online music stores worldwide. "Lobster Records is a great label that we've had a strong relationship with over the last year," said Mitchell Koulouris, Chief Executive Officer of DMGI. "We're pleased to solidify our partnership with a long-term distribution agreement in order to bring their music to more people through the digital music market place." Additionally, DMGI intends to release portions of the Lobster Records catalog through ringtone, mastertone, and over-the-air download sales channels as they are added as part of the Digital Music Group distribution network.

Lobster Records: Quality Modern Rock

Founded in the mid-1990s, Lobster Records is the home to a growing catalog of independent music. "We're very excited about securing a long-term distribution arrangement with Digital Music Group," said Steve Lubarsky, President of Lobster Records. "We see the power of the digital music marketplace and want to work with Digital Music Group to take full advantage of the opportunity we have through the digital sales channels."

About Lobster Records

Lobster Records is a California-based independent music label whose catalog includes albums from Yellowcard (Capitol), Over It (Virgin), and "next big things" Lorene Drive and Park. For more information please visit www.lobsterrecords.com.

About Digital Music Group, Inc.

Founded in 2005, Digital Music Group, Inc. (NASDAQ:DMGI) is focused on helping consumers worldwide to experience more music, in more ways. Digital Music Group acquires the digital rights to music recordings and processes these recordings into digital format for distribution to online music stores such as Apple iTunes Music Store, MSN Music, RealNetworks, Napster, Wal-Mart Music and Yahoo! Music, where they are available for purchase by consumers via downloading. For more information, please visit www.digitalmusicgroupinc.com.

Digital Music Group is a trademark of Digital Music Group, Inc. Other names mentioned herein are the property of their respective owners.

Forward-looking Statements

This release contains forward-looking statements (including, without limitation, information regarding Digital Music Group's licensing of the Lobster Records catalog and making the Lobster Records catalog available in the current and future digital channel) that involve risks and uncertainties that could cause the results of Digital Music Group to differ materially from management's current expectations. Actual results may differ materially due to a number of factors including, among others: potential delays in receiving the master recordings; potential changes in consumers' tastes and preferences in music; our ability to digitize the recordings, our ability to make the catalog available in ringtone, mastertone and other channels; and our dependence on Apple iTunes Music Stores and other online music stores to make the digital albums available for purchase by consumers. The matters discussed in this press release also involve risks and uncertainties described in Digital Music Group's most recent filings with the Securities and Exchange Commission. Digital Music Group assumes no obligation to update the forward-looking information contained in this release.

Press Contact
Digital Music Group, Inc.: Anders Brown, Chief Operating Officer,
Telephone: (916) 239-6010 x2504.

Investor Relations Contact
Digital Music Group, Inc.: Karen Davis, Chief Financial Officer,
Telephone: (916) 239-6010 x2505.

Allen & Caron Inc.: Jesse Deal, Account Manager,
Telephone: (212) 691-8087, e-mail: Jesse@allencaron.com

Source: Digital Music Group, Inc.

CONTACT: Media, Anders Brown, Chief Operating Officer, ext. 2504, or
Investor Relations, Karen Davis, Chief Financial Officer, ext. 2505, both of
Digital Music Group, Inc., +1-916-239-6010; or Jesse Deal, Account Manager of
Allen & Caron Inc., +1-212-691-8087, Jesse@allencaron.com, for Digital Music
Group, Inc.

Web site: http://www.lobsterrecords.com/

Web site: http://www.digitalmusicgroupinc.com/

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