DMGI Announces New Channel Partnership with Veoh

DMGI Announces New Channel Partnership with Veoh

DMGI to distribute TV and video content to leading video site

SACRAMENTO, Calif., May 30 /PRNewswire-FirstCall/ -- Digital Music Group, Inc. (NASDAQ:DMGI), a content owner and global leader in the digital distribution of independently owned music, television, film and video catalogs, today announced it will begin offering its television and film content through Veoh, a leading pioneer in Internet television, that operates the Veoh.com video destination on the Internet.

"Veoh has emerged as one of the most popular video destinations on the web," said Mitchell Koulouris, Chief Executive Officer of DMGI. "We believe that Veoh's youth-oriented demographic is ideal for our DMGI Edge, DMGI Comedy, DMGI Sports and DMGI Music content."

DMGI currently controls the digital distribution rights to more than 4,000 hours of video content, ranging from classic television favorites such as Gumby, I Spy, My Favorite Martian, and The Mr. Bill Show to comedy from Sam Kinison, Andrew Dice Clay, and Jamie Foxx, to contemporary content from superstar A&E illusionist Criss Angel.

Veoh has created a virtual community where content owners and producers can find whole new audiences for their shows. Veoh fans can interact with other fans online; share shows with friends; subscribe to their favorite series or channels so they don't miss any new ones; or even save their favorite episodes to watch them offline.

"We are very pleased to make DMGI's well known video content available to our growing viewer base," said Dmitry Shapiro, Veoh's Chief Executive Officer. "We surpassed 10 million viewers last month, and based on their demographic profile and viewing habits, we know the DMGI content will be very popular at Veoh."

For more information on the DMGI video catalog, please visit http://www.dmgi.com/video/.

DMGI plans to begin distributing content through Veoh during the summer of 2007.

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 and video content. DMGI acquires the digital rights to media catalogs and digitally encodes them into multiple formats for distribution to digital entertainment services operating over the Internet and wireless, cable and mobile networks. Our digital entertainment service partners include: the iTunes Store, Google Video, YouTube, AOL/In2TV, RealNetworks, Napster, Wal-Mart Music, MusicNet, Verizon, Sprint, InfoSpace, Moderati, Zingy, 9 Squared, and many others. For more information, please visit http://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 DMGI's distribution of videos through digital entertainment services, including Veoh) that involve risks and uncertainties that could cause the results of DMGI 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 and processing the video content; the market demand for digital video recordings and potential changes in consumers' tastes and preferences in video; and our dependence on digital entertainment services for the distribution and sale of our video content. The matters discussed in this press release also involve risks and uncertainties described in DMGI's most recent filings with the Securities and Exchange Commission, including its Annual Report for 2006 on Form 10-K filed with the SEC on March 30, 2007 and its Quarterly Report on Form 10-Q filed with the SEC on May 14, 2007. Digital Music Group assumes no obligation to update the forward-looking information contained in this release.

Press Contact

Foeller Communications: Kurt Foeller, Telephone: 415-578-3251
e-mail: dmgi@foellercom.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

First Call Analyst:
FCMN Contact:

Source: Digital Music Group, Inc.

CONTACT: Kurt Foeller of Foeller Communications, +1-415-578-3251,
dmgi@foellercom.com, for Digital Music Group, Inc.; or investors, Karen Davis
Chief Financial Officer of Digital Music Group, Inc., 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.digitalmusicgroupinc.com/

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