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Digital Music Group and Digital Music Video Market

Digital Music Group, Inc. announced that it has expanded its business model to include music video content. As part of this announcement, DMGI also announced three long-term distribution agreements with music video catalog owners as well as a new channel relationship with Google Video. Additionally, DMGI announced the expansion of its iTunes Music Store relationship to include music videos.

The three music video catalogs announced today are: * Hard 'N' Heavy: Hard 'N' Heavy was a video magazine that featured the best heavy metal, hard rock and early-'90s alternative bands, with video clips interspersed with interview footage. The 10-minute segments are a treasure trove from the era when big hair and pointy-headstock guitars ruled rock 'n' roll.

* Beyond Warped: Beyond Warped is a video series that chronicles someup-and-coming bands, along with other well-established artists, from the second stages of the 2004 Vans Warped tour. Included in the catalog are acts such as The Lordz of Brooklyn, Guttermouth, Duane Peters and the Huns, and From First to Last, as well as a two-hour documentary chronicling the tour from a behind-the-scenes perspective.

* San Juan Music Group: From San Juan Music Group comes a number oflive-concert videos from the world of soul and R&B (the Spinners, the Stylistics, the Chi-Lites, Chic), country (Mickey Gilley, Freddy Fender, Poco, Pam Tillis, Lynn Anderson), pop (Dionne Warwick, Air Supply), rock (Starship) and jazz (Duke Ellington, Louis Armstrong).

Collectively, these catalogs represent a variety of music video clips, interviews, and live performance highlights from many different artists across many different genres. Each music video will be released in a 5 - 30 minute video segment and be delivered to the online music video marketplace where it will be made available to consumers.

"We are very excited to announce the expansion into the music video market, " said Mitchell Koulouris, Chief Executive Officer of Digital Music Group. "With the growing popularity of portable video devices such as the Apple iPod, consumers are looking for high quality content. Today's acquisitions bring high quality downloadable video product to these consumers." Koulouris added, "The market is growing rapidly and this is a natural extension of our business model and our focus on music. Because processing digital music videos is very similar to processing digital sound recordings, our operations team already has the knowledge and capacity required to enter this market with little or no incremental operating cost."

Additionally today, Digital Music Group announced the expansion of its sales channel to include Google Video, which delivers music videos to consumers via downloading and streaming, as well as an extension of its current relationship with the iTunes Music Store to include music videos.



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