November 17, 2010

As you know, we previously announced that The Orchard has agreed to merge with Digital Music Group (DMGI). We’re pleased to report that DMGI announced the scheduling of a special meeting of the company’s stockholders for November 13, 2010, at which point the merger will be considered and voted upon. Should shareholders vote in favor of the merger, we would expect to close the merger soon thereafter.

This merger will strengthen our position as a global leader in digital distribution and marketing services.

The combination will offer The Orchard:

• A powerful and expanded set of independent record labels – more leading independents from all over the world; and
• A significant catalogue of film, television and music videos. Of course, regardless of the merger, we will continue to provide you with an ever-expanding suite of services, including:
• A primary focus on selling your music and building audiences for your artists;
• Digital marketing beyond retail outlets -- including digital publicity, podcast and internet radio servicing, promotional track placement, social networking, blog marketing and brand marketing tie-ins;
• Master use licensing placement: marketing your music for inclusion in TV, film and advertising;
• Mechanical clearance services for ex-U.S. labels selling in the U.S., and collection of Sound Performance Recordings globally; and
• A sophisticated digital delivery and accounting infrastructure that gets your music up quickly and accurately, all over the world, and ensures you are paid correctly and on time.
• … and lots of exciting new tools and services soon to be announced (so, stay tuned! You’re going to like them).

We remain committed to serving you, and look forward to a long future working with you to continue to build your business. If you have questions, please contact your Orchard representative.

The Orchard And Digital Music Group (DMGI) Agree To Merge

The Orchard has agreed to merge with Digital Music Group (DMGI). Once the merger is finalized (conditioned, of course, on government approval and completion of the merger in accordance with applicable rules and regulations, etc.), the company will be called The Orchard, and our management team will run it. This move strengthens our position as a global leader in digital distribution and marketing services. The combined company will feature:

• A powerful and expanded set of independent record labels — leading independents from all over the world;
• A significant catalogue of film, television and music videos; and
• A strong global company headquartered in New York City and London, with operations in 27 countries.
Of course, we will continue to provide you with an ever-expanding suite of services, including:
• A primary focus on selling your music and building audiences for your artists;
• Digital marketing beyond retail outlets — including digital publicity, podcast and internet radio servicing, promotional track placement, social networking, blog marketing and brand marketing tie-ins;
• Master use licensing placement: marketing your music for inclusion in TV, film and advertising;
• Mechanical clearance services for ex-U.S. labels selling in the U.S., and collection of Sound Performance Recordings globally; and
• A sophisticated digital delivery and accounting infrastructure that gets your music up quickly and accurately, all over the world, and ensures you are paid correctly and on time.

We remain committed to serving you, and look forward to a long future working with you to continue to build your business. If you have questions, please contact your Orchard representative. We will keep you apprised of all developments as they happen.

It's an exciting day for us, and we're thrilled to share it with you!