The Orchard(R) and Digital Music Group Complete Merger

The Orchard Enterprises Inc., a leading global digital distributor
and marketer of music, and Digital Music Group, Inc. (formerly NASDAQ
symbol "DMGI"), a content owner and leader in the digital distribution
of music and video catalogues, today announced that the two companies
have completed their previously-announced plans to merge. The combined
company (the "Company") will begin trading on November 14, 2007 on the
NASDAQ Global Market under the symbol "ORCD." Current Orchard
president and chief executive Greg Scholl will lead the combined
company as CEO, and headquarters will be at The Orchard´s offices in
New York City. It is anticipated that the DMGI business will rapidly
be integrated with The Orchard. The combined business will all be
conducted under the name "The Orchard."

The Company controls a substantial catalogue of entertainment
assets, with over one million music recordings available for sale and
thousands of hours of television, film and video programming. It is a
market leader for independent distribution of digital music and video,
with powerful marketing, promotion, distribution and operations
capabilities throughout the world. The Company serves artists, labels,
music publishers, television, film and video library owners and other
rights holders by developing new and inventive ways to market and sell
digital content. In addition, for digital and mobile retailers,
advertisers, consumer brands and technology companies, the Company
provides a single point of access to one of the world´s largest and
highest quality digital content catalogues that spans global
superstars and niche and specialty artists.

"The Orchard and DMGI create a powerful combination in the rapidly
growing digital media industry," said Mr. Scholl. "DMGI adds exciting
new artists and record labels to The Orchard´s already extensive music
catalogue, and offers an immediate and significant leadership position
in the digital distribution of independently owned TV, film and video
content."

Mr. Scholl added, "We anticipate rapidly integrating the companies
to reduce costs aggressively. At the same time, we anticipate driving
revenue through proactive and productive outreach to DMGI´s clients to
ensure they take full advantage of the increased distribution and more
sophisticated retail sales and marketing capabilities that The Orchard
offers."

At a special meeting held today, the merger and a reverse stock
split were approved by DMGI stockholders. The reverse split was
necessary to maintain a NASDAQ Global Market listing, and the Board of
Directors today authorized a one-for-three reverse split to be
effective on November 14, 2007, when the stock will begin trading
under the symbol "ORCD."

For legal purposes, DMGI is acquiring The Orchard, although the
combination will be accounted for as a reverse merger with The Orchard
deemed to be the "acquiror" for accounting and financial reporting
purposes. As consideration in the business combination, DMGI has
issued (or reserved for issuance pursuant to deferred stock awards)
3,021,364 shares of common stock on a post-split basis (or 9,064,091
shares on a pre-split basis) and 448,833 shares of convertible
preferred stock to the shareholders of The Orchard, including its
principal shareholder Dimensional Associates, LLC. Each share of
preferred stock is convertible into, and has voting rights equivalent
to, 3.33 shares of common stock on a post-split basis (or 10 shares of
common stock on a pre-split basis), with a liquidation preference of
$55.70. After closing of the merger, the shareholders of The Orchard
collectively own approximately 60% of the Company´s voting shares
outstanding (assuming conversion of the preferred stock and including
shares reserved for issuance under deferred stock awards).

As contemplated by the merger agreement and set out in DMGI´s
proxy statement, Greg Scholl, Viet Dinh, Danny Stein and Michael
Donahue have been appointed to the Company´s Board of Directors, and
will serve along with David Altschul, Terry Hatchett and Clayton
Trier, who remain Directors of the Company.

Barth Ballard has relinquished responsibilities as interim CEO and
has agreed to serve in a transition role during the integration of the
companies, after which time he will resign from the company. Richard
Rees, who agreed in September to serve in an interim role as Vice
President of Business Development ahead of the finalized merger
agreement, has submitted his resignation, effective today. Tuhin Roy,
who served as Chief Strategy Officer of DMGI and President of DMGI´s
subsidiary Digital Rights Agency, has submitted his resignation,
effective today. DMGI´s Digital Rights Agency subsidiary brand (along
with the Psychobaby, DMI and Digital Music Group brands) will be
integrated into The Orchard, and the company will retain one brand and
one identity as The Orchard.

About the Company

The Orchard is a leading digital distributor and marketer of music
and, with the acquisition of DMGI, becomes a music and video content
owner and first-mover in the digital distribution of independently
owned video content, such as music videos, episodic television shows,
feature-length films, short films, and cartoons and other animated
features. The Company is represented in 29 countries and controls an
unparalleled catalog of music encompassing thousands of labels and
every conceivable music genre and era. The Company supplies music and
video to the leading digital music stores and mobile operators
throughout the world, and executes global marketing and promotion
programs locally, with experts in every major music territory managing
initiatives tailored to each country´s unique dynamic. The Company
works as a close business partner with its label clients and provides
retail sales and marketing, an extensive suite of online promotional
programs, synchronization placement, global royalty collection, global
publishing administration, and in select cases, co-production
investment capital. The Company also provides strategic media services
to an impressive roster of digital retailers and leading consumer
brands, ranging from publishing research, licensing and administration
through comprehensive online and offline branding programs.

Forward-Looking Statements

This release contains statements that are considered to be
forward-looking statements within the meaning of federal securities
law (including, without limitation, information regarding the
Company´s marketing, promotion, distribution and operations
capabilities and the opportunity for combined revenue synergies and
cost reductions) that involve risks and uncertainties that could cause
the actual results of the Company following the merger to differ
materially from management´s current expectations. Actual results
could differ materially from those anticipated in such forward-looking
statements as a result of many reasons, including risks, uncertainties
and factors which include, but are not limited to:

-- our ability to successfully integrate the operations of The
Orchard and DMGI and achieve the anticipated operational
synergies and cost reductions;

-- revenue and earnings expectations which are difficult to
predict because of our limited operating history and emerging
nature of the digital media industry;

-- our limited operating history in the acquisition, processing
and sale of digital video content;

-- acceptance and adoption of the digital format by consumers and
potential changes in consumers´ tastes and preferences in
music and video, and the extent to which our content will
appeal to consumers;

-- our ability to successfully identify, acquire for a
commercially reasonable valuation, and process additional
catalogs of music and video content;

-- competitive and economic conditions in our industry;

-- our ability to renew multi-year agreements for digital rights
to music and video content as they expire;

-- our limited ability to influence the pricing models of digital
entertainment services;

-- we may not have proper legal title to the digital rights
associated with music and video content that we purchase or
license, or others may claim to have such rights;

-- potentially long delays in receiving the master music and
video recordings that we acquire rights to;

-- our dependence on digital entertainment services to review,
process and make all of our digital offerings available on a
comprehensive and timely basis for purchase by consumers;

-- music and video piracy;

-- availability, terms and use of capital to continue to grow our
business;

-- our dependence on Apple iTunes Store for the majority of our
revenue;

-- our ability to successfully enter into new sales channel
relationships;

-- the differing interpretations of and potential ambiguities in
U.S. copyright laws; and

-- maintaining adequate internal operating and financial controls
over our business and financial reporting.

Many of the factors listed above are and will be beyond the
Company´s control. Given these uncertainties, you should not place
undue reliance on such forward-looking statements. The matters
discussed in this press release also involve risks and uncertainties
described in DMGI´s most recent filings with the Securities and
Exchange Commission (SEC), including its Annual Report for 2006 on
Form 10-K filed with the SEC on March 30, 2007 and its most recent
Quarterly Report on Form 10-Q filed with the SEC on November 13, 2007.
The Company assumes no obligation to update the forward-looking
information contained in this release.