DG Systems Expands Digital Network to 250 Television Stations; 250 television stations to receive commercials with digital speed and quality.

SAN FRANCISCO--(BUSINESS WIRE)--June 20, 1996--DG Systems (NASDAQ:DGIT) announced today that more than 250 television stations will join DG's network for the high speed delivery of commercials from advertisers and ad agencies to radio and television stations and cable operators. DG Systems is the company that created the broadcasting industry's largest digital distribution network for advertising with more than 4,500 radio stations currently installed. DG Systems has electronically delivered more than 400,000 commercials in digital form so far in 1996.

Among the more than 250 participating television stations are 60 stations in the top 30 markets including WAGA (Atlanta), WHDH (Boston), WLS (Chicago), KXAS (Dallas/Fort Worth), KTVD (Denver), KABC (Los Angeles), WSVN (Miami), WTAE (Pittsburgh), KPIX (San Francisco), KOMO (Seattle), and WJLA (Washington, DC).

"DG Systems' reputation and expertise in the digital delivery of advertising has enabled us to quickly penetrate the television market," said Henry Donaldson, president and CEO of DG Systems. "We have dedicated the past four years to building a technology and operational infrastructure that has reshaped the radio broadcasting industry. Our more than 650 customers in the advertising community have demanded the same capability for their television advertising initiatives, and we are pleased to be making rapid progress in meeting their needs."

"DG Systems' strong record in audio distribution gives us confidence that its video service will once again meet our high standards," said Todd Challe, production manager, Calvin Klein Cosmetics Company. "DG Systems' ability to distribute video as well as audio means one-stop shopping for electronic delivery is finally available."

The Digital Delivery Revolution

Compared to the current system of air freight delivery using analog tapes or analog satellite systems onto station tape machines, electronic delivery of commercials offers advertisers and agencies significantly greater flexibility in the execution of advertising campaigns. Commercials can be sped to broadcasting outlets in minutes, with dramatically greater quality and clarity of reproduction.

Prior to DG Systems, most production studios delivered video or audio on tape via overnight parcel service, a process which often lacked the quality and control demanded by advertisers. In turn, stations were required to manually thread, queue and store numerous tapes. No same-day delivery was possible with these systems. Though analog satellite distribution was available, it lacked automated confirmation of receipt and required manual set-up at the stations.

As radio advertisers have realized great benefits from digital delivery, music labels and other providers of short-form programming have also begun to utilize the system to deliver new music releases and other content to the more than 4,500 stations that make up the DG Systems network. In addition to stations, DG Systems has more than 4,500 corporate advertisers, 650 agencies and 250 production studios on-line. These content providers benefit from DG Systems' advanced network operations capability, which delivers levels of quality, reliability and service unmatched by any other company in the industry.

How It Works

DG Systems will provide selected post-production houses with specialized software and encoding hardware, which compresses video using the MPEG-2 standard. The compressed video files are then transmitted directly to DG Systems' Network Operations Center.

DG Systems will provide each television station with the Pentium-based rack-mountable ADvantage Digital Video Playback System and an accompanying Hughes Network Systems DirecPC satellite dish. The ADvantage unit incorporates a video monitor and a 9-giga byte hard drive with an initial capacity to store up to 250 30-second television commercials. The simple, menu-driven interface allows station personnel to preview commercials as well as sort by client, delivery date, air date and ISCI code. The video, which is automatically downloaded from satellite to the DG Systems ADvantage unit, can be fed to existing tape systems or directly into a digital on-air server.

DG Systems will confirm each delivery to the advertiser, providing the same high level of reliability and service the company has offered for radio deliveries for over four years. DG Systems will also deliver spots to stations and cable headends not yet on-line with its digital network, creating a truly one-stop shop for advertising agencies and their clients to reach all 1,200 television stations, 10,000 cable headends, and 10,000 radio stations in the United States.

As with its radio delivery services, DG Systems will initially offer three guaranteed levels of service for video delivery -- same-day, next-day and two-day. Same-day service offers an enormous competitive marketing weapon for markets with a frequent need to update advertisements.

Founded in 1991, DG Systems is the largest provider of electronic distribution services for advertising, music, news and programming for the broadcast industry. The company electronically links more than 4,500 radio stations in the United States and Canada with hundreds of advertisers, agencies, production studios, syndicators and music companies. The company offers a family of services for quick and reliable delivery of superior-quality advertisements, new music singles, and short-form programming to radio and television stations, along with associated traffic instructions and supporting promotional material. DG Systems is headquartered in San Francisco, with field offices in New York, Chicago, Los Angeles and Atlanta. DG Systems can be reached at 415-276-6600 or www.dgsystems.com on the World Wide Web.

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