Digital Music Group Acquires Chancellor Records

Digital Music Group Acquires Chancellor Records

SACRAMENTO, Calif., June 26 /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, announced the acquisition of Chancellor Records, including the master recordings of its entire catalog which consists of more than 2,000 tracks. Founded in the 1957 by Bob Marcucci and Pete DeAngelis, this ground-breaking label fueled the teen idol revolution in the late 1950s and '60s with such artists as Fabian, Frankie Avalon and Claudine Clark.

The catalog features two number one singles, 13 "Top 10" singles, 27 "Top 40" singles, and three "Top 10" albums. The label was also home to the early recordings of pop idols Johnny Burnette and Johnny Rivers. Mr. Marcucci earned the nick name "The Idol Maker," and in 1980 his life and experiences as mentor and personal manager was made into the movie by the same name, starring Ray Sharkey.

"We are excited about this acquisition," said Mitchell Koulouris, Chief Executive Officer of Digital Music Group, "because Chancellor Records is such an important part of music history. The label produced a number of timeless hits by some of the most revered artists of the pop era, yet less than ten percent of the Chancellor catalog is available in digital formats at online music stores. We're looking forward to making the entire catalog available to music lovers everywhere through the digital music marketplace over the coming months."

Digital Music Group will begin work immediately to integrate the Chancellor Records catalog into the Digital Music Group distribution network so the entire catalog can be available to consumers worldwide. Included in the Chancellor Records catalog are many songs that have not been available since the mid-1960s and versions of several songs that have never been released to the public.

"Digital Music Group shares a passion and a vision for what the digital music market place can mean for Chancellor Records," said Bob Marcucci, President of Chancellor Records. "We are excited about the acquisition and what that means to the fans of our artists everywhere."

DMGI also intends to release portions of the Chancellor Records catalog through ringtone, mastertone, and over-the-air download sales channels as part of the Digital Music Group distribution network.

About Chancellor Records

Established in 1957 in Philadelphia by Bob Marcucci and Peter DeAngelis, Chancellor Records was home of the hits of teen idols such as Fabian and Frankie Avalon as well as Claudine Clark's "Party Lights". The catalog features two number one singles, 13 "Top 10" singles, 27 "Top 40" singles, and three "Top 10" albums. Chancellor Records is also home to the early recordings of pop idols Johnny Burnette and Johnny Rivers. For more information, please visit www.chancellorentertainment.com/records.html.

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 the 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.dmgi.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 acquisition of the Chancellor Records catalog and making the Chancellor 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.

Contact: Media: Investors:
Len Hall, VP Media Relations Jesse Deal, Account Manager
Allen & Caron Allen & Caron
949 474 4300 949 474 4300
len@allencaron.comjesse@allencaron.com
or or
Anders Brown, COO Karen Davis, CFO
Digital Music Group, Inc. Digital Music Group, Inc.
916 239 6010 x 2504 916 239 6010 x 2505

Source: Digital Music Group, Inc.

CONTACT: Media, Len Hall, VP Media Relations of Allen & Caron,
+1-949-474-4300, len@allencaron.com, for Digital Music Group, Inc.; or Anders
Brown, COO of Digital Music Group, Inc., +1-916-239-6010, ext. 2504; or
Investors, Jesse Deal, Account Manager of Allen & Caron, +1-949-474-4300,
jesse@allencaron.com, for Digital Music Group, Inc.; or Karen Davis, CFO of
Digital Music Group, Inc., +1-916-239-6010, ext. 2505

Web site: http://www.chancellorentertainment.com/records.html

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

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