Valley Media & GMO Enter Agreement to Market Digital Audio Postcard

Business Wire, Nov 18, 1999

WOODLAND, Calif.--(BUSINESS WIRE)--Nov. 18, 1999--

Valley Media, Inc. (Nasdaq: VMIX), a recognized leader in the full-line distribution of music and video entertainment products, today announced it has signed an agreement with Global Music One (GMO) to help market GMO's proprietary Digital Audio Postcard or DAP.

Delivered via the web or a targeted e-mail database, Digital Audio Postcards are self-contained multimedia files that require no additional plug-in players. DAPs can be used as cost-effective business-to-business and business-to-consumer marketing tools.

Valley Media and GMO have teamed up in an agreement under which Valley is licensed to offer the Digital Audio Postcard to all audio and video suppliers as well as Internet and traditional retailers.

"We believe this arrangement will have great practical benefits for both Valley and GMO," said Michael Fallone, Valley's Vice President of Marketing. "With the Digital Audio Postcard, GMO has developed a true innovation in the way music, video and DVD can be marketed via e-mail and on the web. Valley is well positioned to market this technology.

"As a business-to-business wholesaler and Internet fulfillment provider, Valley has numerous sales and marketing contacts within the audio and video industry on both the retail and vendor sides of the business.

"This agreement makes sense for everyone - GMO gets valuable support from Valley's marketing team and Valley gets an innovative, new medium to offer our vendors and customers as an additional value-added service," added Fallone.

GMO's DAPs offer CD-quality compressed audio faster than comparable web formats and allow for a two-stage graphic display, utilizing dynamic text that is live and updateable. DAPs can provide a hyperlink to an online retailer selling the featured product or to an artist or supplier website that offers more detailed information about the product or artist.

GMO provides a full suite of data tracking services to gauge promotional effectiveness of any DAP they produce.

"The Digital Audio Postcard puts content ahead of technology, which could represent a significant shift in the way digital media is disseminated on the Internet," said Anthony Stonefield, CEO of GMO.

"We are absolutely thrilled to have joined with Valley Media, a pioneer in e-commerce fulfillment, to revolutionize online entertainment marketing."

DAP samples and additional information can be found at www.valley-media.com/DAP.html.> About Valley Media:

Valley Media (Nasdaq: VMIX) is a recognized leader in Internet fulfillment, the full-line distribution of music, video and DVD product and independent distribution, publications and proprietary database products. Valley Media operates facilities in seven states with primary distribution facilities in Louisville, KY, and Woodland, CA, where its corporate headquarters are located.

Additional information regarding Valley Media is available at www.valley-media.com.

About GMO:

GMO, a five-year-old technology and service company headquartered on the Digital Coast in Los Angeles, is a leader in the convergence space where Internet content is developed, distributed, managed and tracked. GMO is a product innovator and technology incubator whose management team combines the expertise of the music, broadcast, and Internet and broadband industries.

The company's business alliances and customers include AT&T, Excite@Home Network, Compaq, HBO, Nokia, Aiwa, EMI-UK, Ticketmaster, Film Four (UK), Virgin Records, Valley Media, MTV Europe, and Aris-Solana Technologies.

GMO also provides production, hosting and technical support to AT&T's a2b music(SM) platform and has developed and executed numerous online initiatives for major recording artists including Aerosmith, Tori Amos, Counting Crows, Cowboy Junkies, Garbage, Lenny Kravitz, Paul McCartney, Loreena McKennitt, Alanis Morissette, Willie Nelson, Bonnie Raitt, Squeeze, Sting and YES.

This press release may contain forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by words such as "will," "expects," "anticipates," "plans," or "intends" and by other descriptions of future circumstances or conditions.

Actual results may differ materially from those projected in these forward-looking statements.

Factors that could affect Valley Media's actual results include, without limitation, risks and uncertainties related to the following factors: intense competition, customers' ability or preference to buy product direct, slower growth rates of Internet sales, new electronic delivery technologies and copyright or royalty disputes.

More information about these and other factors that could negatively affect Valley Media's financial performance and the value of its common stock is contained in Valley Media's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K.

Readers of the 10-K should pay particular attention to the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Factors Affecting Operating Results."