Destiny Media Technologies Announces Third Quarter Results

Destiny Media Technologies Announces Third Quarter Results

Play MPE System Access Fees Surge 250% Sequentially

Further Sequential Growth Anticipated

VANCOUVER, British Columbia, July 16 /PRNewswire-FirstCall/ -- Destiny Media Technologies (BULLETIN BOARD: DSNY) today announced financial results for the third quarter of fiscal 2007, highlighted by sharply higher system access fees for its proprietary Play MPE(TM) secure digital media distribution system and the launch of Clipstream 3, the company's newest- generation solution for playing user-generated audio and video over the Internet.

For the three months ended May 31, 2007, access fees from Destiny's proprietary Play MPE secure digital media distribution system surged to $165,735 which is 250% of $65,860 reported for the second quarter of fiscal 2007, reflecting the transition from the pilot phase to full transaction-based pricing and the expansion of the system into Canada. Total Play MPE transactions increased 229% to 15,164,920 in Q3 2007 from 4,613,725 in Q3 2006.

"We expect Play MPE access fees to increase to at least $190,000 in the fourth quarter of fiscal 2007 based on anticipated growth in usage with existing paid customers. We anticipate a larger sequential increase in the first quarter of fiscal 2008 as we complete the implementation of our pricing model and additional pilot phase customers in the U.S. and Canada go to commercial contract," said CFO Fred Vandenberg.

Record labels that have entered into commercial agreements to use Destiny's Play MPE system for the distribution of pre-release media are reducing costs by sending fewer physical CDs, and some are already delivering content exclusively through the MPE system. Customers also benefit from the unique security and tracking features of the Play MPE system. "Industry awareness of the advantages of Play MPE is rapidly increasing, and we are confident that additional labels will enter into agreements with us," Vandenberg said. He added that the Company's credit card-based upload system to accommodate the promotional media distribution requirements of smaller independent labels is scheduled to go on-line in July.

As anticipated, third quarter revenue from the Company's proprietary Clipstream 3 system for embedding streaming audio and video into web pages was significantly below prior year, reflecting Destiny's focus on establishing Clipstream 3 partner relationships rather than direct sales to end users. "We expect these investments in new partnerships in the advertising and market research verticals to generate renewed growth in Clipstream 3 revenue beginning in the first quarter of fiscal 2008," Vandenberg said.

Clipstream 3 is the simplest way to provide instant video and sound on virtually any internet browser, and does not require users to install software or open their computers to potential security threats. With Clipstream 3, content owners simply encode, then upload the video and audio content to an existing web site. In contrast, competing solutions use complicated third party streaming servers that need to be integrated with the main webserver.

Play MPE Transaction Results

Q3 200
2080 singles totaling 1,245,397 transactions
321 bundles representing 4241 songs totaling 7,920,170 transactions
46 albums representing 1144 songs totaling 3,220,190 transactions
443 box sets representing 1572 songs totaling 2,779,163 transactions
Total transactions: 15,164,920

Q3 2006
534 singles totaling 890,884 transactions
115 bundles representing 1523 songs totaling 1,509,373 transactions
31 albums representing 1018 songs totaling 955,351 transactions
267 box sets representing 945 songs totaling 1,258,117 transactions
Total transactions: 4,613,725

Financial Results
Three Months Three Months Three Months Nine Months
Ended Ended Ended Ended
November 30, February 28, May 31, May 31,
2006 2007 2007 2007
$ $ $ $

Revenue 167,581 172,417 259,208 599,206
Operating expenses
[Note 1]
General and
administrative 111,202 154,477 223,977 489,656
Sales and marketing 243,618 274,281 372,168 890,067
Research and
development 112,617 234,585 272,904 620,106
Amortization 13,296 13,765 16,530 43,591
480,733 677,108 885,579 2,043,420
Loss from operations (313,152) (504,691) (626,371) (1,444,214)
Other earnings (expenses)

Interest Income - - 18,525 18,525
Interest and other
expense (3,378) (3,850) (3,134) (17,388)
Net loss (316,530) (508,541) (610,980) (1,436,051)

Net loss per common
share, basic and
diluted (0.01) (0.01) (0.01) (0.01)

Weighted average
common shares
outstanding, basic
and diluted 41,936,223 42,287,793 44,356,271 38,402,761

Note 1: Included in
operating expenses
are non-cash stock
compensation as
follows:
Non-cash stock
compensation 137,565 363,717 136,114 637,396

About Destiny Media Technologies

Destiny Media Technologies, Inc. (http://www.dsny.com/) (DSNY.OB) is a leader in developing easy-to-use tools for distributing media through the Internet. The company's products include: Clipstream(TM) playerless streaming, Radio Destiny(TM) internet radio software and MPE(TM). Destiny's MPE suite of products includes PODDS online music store software and infrastructure, PODDS Internet jukebox software and the Play MPE media distribution system for sending content securely through the Internet. Established in 1991, Destiny is headquartered in Vancouver, Canada.

Safe Harbor Statement

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

Company Contact:
Fred Vandenberg, CFO
Destiny Media Technologies, Inc.
(604) 609-7736 (ext. 236)
Email: fredv@dsny.com

Investor Contact:
Neil Berkman
President
Berkman Associates
(310) 826-5051
info@berkmanassociates.com

First Call Analyst:
FCMN Contact:

Source: Destiny Media Technologies

CONTACT: Fred Vandenberg, CFO of Destiny Media Technologies, Inc.,
+1-604-609-7736 (ext. 236), fredv@dsny.com, or Investors, Neil Berkman,
President of Berkman Associates, +1-310-826-5051, info@berkmanassociates.com

Web site:

http://www.dsny.com/

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