DG Systems Inaugurates Digital TV Delivery Service with New Toyota Camry Commercial; Over 300 television stations sign up to go on-line with DG Systems.

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 1, 1996--The first paid digital delivery of a television commercial on DG Systems' high-speed electronic network was completed last week as DG Systems delivered a commercial for the new Toyota Camry.

The spot television advertising buy included 42 television stations, a growing number of which are coming on-line to the DG Systems digital network.

With DG Systems' new service, advertisers can digitally send commercials to standards-based video receivers located in television stations across the country. DG Systems created the broadcasting industry's largest digital distribution network for the radio industry, already 5,000 stations strong, and is now bringing the same benefits of speed, digital quality, and digital storage to the television market. More than 330 television stations and 10 cable interconnects have already committed to join DG Systems' digital network.

The initial digital TV spot delivery by DG Systems was part of a regional buy for Toyota - Northern California Dealers placed by Hoffman/Lewis, its advertising agency based in San Francisco.

"DG Systems is leading the television market's digital delivery effort with its new service," said Nancy Hytone Leb, Hoffman/Lewis' account supervisor for the Toyota account. "The speed, quality and efficiency we have experienced so far with DG Systems makes us confident that digital distribution will be a powerful new capability for the television advertising industry."

"We are excited to be working with DG Systems on its first series of digital spot deliveries for television, much as we were for its initial digital radio deliveries four years ago," said Susan Aaronson, traffic manager, Hoffman/Lewis. "We were pleased with DG Systems' flexibility and high-quality service in completing these first deliveries."

The spot was transmitted via Hughes Network Systems DirecPC digital delivery satellite service to the on-line stations on DG Systems' network. Minutes later, as the spot arrived at the stations, the commercial was downloaded directly into DG Systems' ADvantage Digital Video Playback System (DVPS) located in the stations' production facilities. Stations which are not on-line received high-quality dubs from DG Systems' centralized video duplication facility in Louisville, Kentucky.

DG Systems believes that its ADvantage DVPS implementation of the MPEG 2 standard for video compression provides stations with higher image quality for television commercials compared to analog deliveries by satellite or tape cassette.

Digital delivery through the DG Systems network directly to the ADvantage DVPS (which can store up to 250 thirty-second commercials) can also streamline station operations by eliminating the need for stations to manually download satellite deliveries or manage tape cassettes.

"We are excited to bring the benefits of our digital delivery capabilities to the television market," said Henry Donaldson, DG Systems' president and CEO. "We have a proven track record in managing and distributing a high volume of digital deliveries to broadcast stations. This is the next step toward providing our advertising customers with one-stop shopping for all their audio and video distribution and fulfillment needs."

Among the more than 330 television stations which have committed to join DG Systems' network are more than 70 stations in the top 30 markets, including WAGA (Atlanta), WHDH (Boston), WLS (Chicago), KXAS (Dallas/Fort Worth), KTVD (Denver), KABC (Los Angeles), WSVN (Miami), KYW (Philadelphia), WTAE (Pittsburgh), KRON (San Francisco), KOMO (Seattle), and WJLA (Washington, DC). More than 10 of these stations are currently on-line, with the total expected to exceed 150 by year end.

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 5,000 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 Washington D.C. 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, its ADvantage Digital Video Playback System product and its digital television commercial delivery service, including the estimated number of television stations committed to installing the product and becoming part of the company's digital video delivery 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 August 6, 1996. DG Systems, ADvantage Digital Video Playback System and ADvantage DVPS are trademarks of Digital Generation Systems, Inc. All other trademarks are the property of their respective holders.

CONTACT: Thomas Associates Inc.

Robert Schettino, 415/596-2700

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Susan Ice, 415/596-2700

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DG Systems

Jeff Byrne, 415/276-6600

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