DMGI Announces Expansion Into TV and Film Digital Distribution

DMGI Announces Expansion Into TV and Film Digital Distribution

Content Distribution Agreements for Gumby, Clutch Cargo, I Spy, My Favorite Martian, and Other TV and Film Catalogs Anchor Expansion Strategy

SACRAMENTO, Calif., Nov. 9 /PRNewswire-FirstCall/ -- Digital Music Group, Inc. (NASDAQ:DMGI), a content owner and global leader in the digital distribution of independently owned music and video catalogs, today announced that it has expanded its business model to include the digital distribution of television, film, and video catalogs. As part of this announcement, DMGI also reported the closing of a number of long-term distribution agreements with television, film, and video catalog owners representing more than 4,000 hours of video content which will be marketed as content channels under the brand name "DMGI Network."

DMGI intends to continue to build its television, film, and video catalog. The market for digital video content is not as developed as for music content, and there are no assurances that it will develop in the same manner or to the same extent. However, this strategic move positions DMGI to take advantage of its expertise, systems and relationships to become the distributor of choice for independent video catalog owners, helping them to access the online video and mobile stores which sell this content and stimulate digital demand.

"We're very excited about the addition of television, film, and video catalogs, which are an ideal fit into our existing business model," said Mitchell Koulouris, Chief Executive Officer of DMGI. "Much like the pre-recorded music market three years ago, we believe the TV and film markets have begun their migration from physical distribution to digital distribution. We have a strong start with the long-term distribution agreements announced today, and believe we have in place a technology platform and digital distribution channel to make DMGI a leading choice for video content owners in this emerging digital marketplace."

DMGI Network: Something for Everyone

The channels and associated television, film, and video catalogs announced today include:

* Classics: this channel includes classic TV series from the 1950s, 60s,
and 70s, including: I Spy (82 episodes), Daniel Boone (165 episodes),
My Favorite Martian (107 episodes), The Invisible Man (26 episodes),
The Cisco Kid (156 episodes), Peter Gunn (114 episodes), and The
Adventures of Robin Hood (113 episodes).

* Kids: this channel includes both modern and classic content for kids,
including: The Gumby Show (110 episodes), Gumby Adventures (116
episodes), The Shari Show (26 episodes), Clutch Cargo (52 episodes),
and Courageous Cat and Minute Mouse (125 episodes).

* Sports: this channel includes sport-themed video content, including:
White Knuckle Action Sports, a catalog of over 200 clips and
feature-length films featuring the top athletes in extreme sports such
as snowboarding and skateboarding; The History of College Football, and
The History of College Basketball.

* Comedy: this channel includes both skit and stand-up comedy from some
of the top names in the history of comedy, including: Sam Kinison's
HBO(R) Specials (5 hours), Cheech Marin and Friends Live from South
Beach, Sinbad: Son of a Preacher Man and Afros and Bellbottoms, Steve
Harvey: Don't Trip, He Ain't Through with Me Yet, and Bizarre, a
popular comedy/variety show starring John Byner and featuring the
stunts and antics of "Super Dave" Osborne (150 episodes).

* History: this channel includes more than 40 hours of historic content
and documentaries including The Great Inventors; The Korean War In
Color; World War II in Color; Kamikaze in Color; Greatest US Space
Liftoffs; Greatest Soviet Space Liftoffs; Soviet Space Disasters;
historic speeches by Woodrow Wilson, Franklin Roosevelt, Lyndon
Johnson, Winston Churchill, John F. Kennedy, and Richard Nixon; and
historic newsreels from the mid-1920s to the mid-1960s.

* Edge: this channel contains more than 1,000 hours of edgy content that
spans from the ridiculous to the raunchy and includes great series'
such as The Best of Hooters(R) Swimsuit Competitions, pop culture
animation and parodies from Five Guys in a Garage, Greatest Demolition
Derby Crashes, Xtreme Pro Wrestling(R), Backyard Wrestling(R), Rage in
the Cage(R) (including more than 1,000 fights and fight tips), ten
classic Kung Fu Martial Arts films, and Juiced, the edgy and hilarious
practical joke reality show starring O.J. Simpson.

* Urban: this channel contains more than 50 hours of high-quality content
for the sophisticated Urban generation of 18-40 year olds living in a
post hip-hop urban culture. The diverse programming in this category
includes comedy to full-length feature films including Flip The Script
(starring Robin Givens), Blood of a Champion (Deborah Cox, Bokeem
Woodbine), Boss'N Up (Snoop Dogg), and Forbidden Fruits (Fredro Starr,
Keith Sweat), among others.

"Our goal with the DMGI Network is to create a simple framework that can encompass video content that has something of interest to audiences of all ages and demographics," said Mr. Koulouris. "Today's announcement of our long-term distribution agreements in TV, film, and video, coupled with our already extensive catalog of music recordings and music videos, underscores our commitment to be a leading distributor of digital entertainment properties. We are looking forward to continued growth in our catalogs for both video and music by working with content owners worldwide to help them access the digital media market."

DMGI's agreements with video content owners are very similar to its long-term license agreements with music catalog owners. While not all agreements included in today's announcement are identical, they generally feature similar terms such as DMGI being authorized as the exclusive digital distributor for the video programs for certain territories (such as North America or Worldwide) for terms ranging from five to nine years, with renewal options in some cases. After the term of the agreements, all rights revert to the content owner. DMGI intends to package the performances into segments, digitally process the video for delivery to online and mobile retailers, and market the video content under its DMGI Network brand. DMGI will share in the future sales generated by this video content at a negotiated rate with the content owners. Additionally, DMGI pays a cash advance which is recoupable against the content owners' share of future sales. Until the advance is recouped, DMGI receives 100 percent of the sales proceeds. The total advances associated with the long-term agreements announced today are $2.3 million.

For more information on the catalogs and content announces today, please visit www.dmgi.com/video/.

About DMGI

Founded in 2005, Digital Music Group Inc. (NASDAQ:DMGI) is a content owner and global leader in the digital distribution of independently owned music, TV, film and video catalogs. DMGI acquires the digital rights to media catalogs and digitally encodes them into multiple formats for distribution to online music, mobile, and video stores. Our retailers include: the iTunes Music Store, Google Video, RealNetworks, Napster, Wal-Mart Music, Yahoo! Music, InfoSpace, Moderati, Zingy, 9Squared, and many others. 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 the expansion of Digital Music Group's business model to include the digital distribution of television, film, and video catalogs, DMGI's plans to make its television, film and video catalog available for purchase by consumers through online video and mobile stores, DMGI's plans to build its television, film and video catalog, DMGI's plans to package performances into segments, digitally process them and market video content through a DMGI Network brand, the sharing of future sales with content owners, DMGI's goal to create a simple framework utilizing the DMGI Network, DMGI's commitment to be a leading distributor of digital entertainment properties, and continued growth of DMGI's catalogs for both video and music) 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: unforeseen difficulties assembling new video, film and television content; our ability to process video recordings with our current technology platform and capacity without significant increase in our operating costs; potential delays in the acceptance of the digital distribution of video content by consumers; potential changes in consumers' tastes and preferences in television, film and video content; our ability to add new video distribution channels; and our dependence on Google Video, the iTunes Music Store and other online distributors to review, process and make all of our video content available for purchase by consumers in a timely manner and without limiting the type or amount of video content they will accept. 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

Beck Media & Marketing: Todd Beck or Steve Spignese, Telephone:
(310) 689-7363 e-mail: todd@beckmedia.com or
steve@beckmedia.com

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, Todd Beck, todd@beckmedia.com or Steve Spignese,
steve@beckmedia.com, both of Beck Media & Marketing, +1-310-689-7363, for
Digital Music Group, Inc.; or Investors, Karen Davis, Chief Financial Officer
of Digital Music Group, Inc., +1-916-239-6010, ext. 2505; 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.dmgi.com/video

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

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