DG Systems Deploys U.S. Robotics X2 Modems Across Its Digital Distribution Network; Greater Throughput Enables DG to Better Serve Its Advertising Customers.

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 13, 1997--Digital Generation Systems Inc. (NASDAQ:DGIT) today announced that it has upgraded more than 1,500 modems in high-volume radio stations on its digital network to U.S. Robotics' X2 technology.

The upgrade has increased distribution throughput to the stations by more than 40%. The higher-speed modems will continue to be deployed at many of the other 5,000 stations on DG's digital network.

The deployment of the higher-speed X2 technology in DG's audio receive-playback terminals in radio stations has enabled the company to increase the number of ads it can distribute to these stations in a given period of time by more than 40%. As a result, advertisers can digitally transmit multiple radio spots requiring fast, 1-hour or 4-hour turnaround to DG's online stations, even during peak periods of demand.

"The deployment of X2 technology has enabled us to increase the speed and capacity of our distribution network and to significantly reduce transmission costs with a relatively small investment," said Henry Donaldson, DG Systems president and CEO. "This is truly a win-win for DG, its advertiser customers and its network of stations."

DG Systems' digital video distribution services enable advertising agencies to deliver spots digitally to stations, significantly enhancing video quality and control while reducing time to market. Through DG's digital network, advertisers can utilize "just-in-time" advertising to respond effectively to competitive campaigns or changing market conditions, by inserting or substituting new creative in selected markets within a matter of hours.

Founded in 1991, DG Systems is a leading provider of electronic distribution services to the broadcast industry, linking hundreds of advertisers, agencies, music companies, and syndicators with over 6,000 radio and television stations in the United States. Together, DG Systems and Mediatech, its recently acquired subsidiary, serve more than 700 advertising agencies, representing over 5,000 major advertisers. DG Systems can be reached at 415/276-6600 or www.dgsystems.com on the World Wide Web.

This release contains forward-looking statements relating to the company and the capabilities of its digital distribution network. These forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to DG Systems' business are set forth in the company's Form 10-Q filed with the Securities and Exchange Commission on Aug. 14, 1997. -0-

Note to Editors: DG Systems and Mediatech are trademarks of Digital Generation Systems, Inc. All other trademarks are the property of their respective holders.

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DG Systems

Patrice Malone/Tom Shanahan, 415/276-6600

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