DMGI Expands Into Digital TV Distribution

Digital Music Group Inc. is expanding its business model to include the digital distribution of television, film, and video catalogs. DMGI says it has closed multiple distribution agreements with television, film, and video catalog owners representing over 4,000 hours of video content, to be marketed as content channels under the name "DMGI Network."

Among the assets are shows under a "Classics" channel such as I Spy, Daniel Boone and My Favorite Martian; a "Kids" channel including The Gumby Show; a "Comedy" channel including the late Sam Kinison’s HBO specials and an "Edge" channel featuring pro wrestling and Juiced, a reality show starring O.J. Simpson.

According to the company, the distribution agreements grant DMGI exclusivity to digitally distribute the programming in certain territories for periods ranging from five to nine years, after which rights revert to the content owners.

The company says it will share in future sales with content owners, and will pay a cash advance recoupable against the content owners’ share of future sales. Until the advance is recouped, DMGI receives 100% of revenues from sales. The total advances from these deals are $2.3 million.