Profile: DG FastChannel, Inc. (DGIT.O)

DG FastChannel, Inc. (DGF) is a provider of digital technology services that enable the electronic delivery of advertisements, syndicated programs, and video news releases to traditional broadcasters, online publishers and other media outlets. The Company operates three nationwide digital networks out of its Network Operation Centers (NOC), located in Irving, Texas (Irving NOC), Atlanta, Georgia (Atlanta NOC) and New Jersey (New Jersey NOC), which link more than 5,000 advertisers, advertising agencies and content owners with more than 21,000 radio, television, cable, network and print publishing destinations, and over 5,000 online publishers electronically throughout the United States, Canada, and Europe. Through its NOCs, the Company delivers video, audio, image and data content that comprise transactions among advertisers, content owners, and various media outlets, including those in the broadcast industries. The Company offers a digital alternative to dub and ship delivery of spot advertising. Its services include online creative research, media production and duplication, distribution, management of existing advertisements and broadcast verification.

On June 5, 2008, the Company acquired Vyvx advertising services business (Vyvx), including its distribution, post-production and related operations, from Level 3 Communications, Inc. On October 2, 2008, the Company acquired Enliven Marketing Technologies Corporation (Enliven). Enliven has two principal operating units, Unicast Communications Corp. (Unicast) and Springbox Ltd. (Springbox). Unicast offers an online advertising campaign management product and Springbox is an Internet based marketing firm.

Advertising Distribution

DGF provides primarily electronic and, to a lesser extent, physical distribution of broadcast advertising content to broadcast stations throughout the United States and Canada. It operates a digital network, connecting more than 5,000 advertisers and advertising agencies with more than 4,000 television, cable and network broadcast destinations, approximately 10,000 radio stations, and over 6,500 print publishing destinations across the United States and Canada. Video and audio transmissions are received at designated television and radio stations on DG FastChannel Spot Boxes, Client Workstations and Digital Media Managers. The servers enable stations to receive and play back material delivered through the Company’s digital distribution network.

Through its Irving NOC, the Company monitors the spots stored in each of its servers and ensures that space is always available for new transmissions. It offers various levels of digital video and audio distribution services to advertisers distributing content to broadcasters. These include DGFC Priority, which guarantees arrival of the first spot on an order within one hour; DGFC Express, which guarantees arrival within four hours; DGFC Standard, which guarantees arrival by noon the next day, and DGFC Economy, which guarantees arrival by noon on the second day. It also offers a set of services enabling advertisers to distribute audio or video spots provided after normal business hours.

Online Advertising Solutions

The Company offers an online advertising campaign management and deployment product known as the Unicast Advertising Platform (UAP). UAP permits publishers, advertisers, and their agencies to manage the process of deploying online advertising campaigns. This process includes creating the advertising assets, selecting the sites, on which the advertisements will be deployed, setting the campaign parameters (ad rotation, the frequency with which an ad may be deployed, and others), deployment, and tracking of campaign results.

The UAP integrates creative assembly with campaign management and detailed performance analysis. UAP offers a suite of products, including Unicast Transitional (full screen and partial screen video and interactive ads that are shown to consumers as they navigate between pages), Unicast In-Page (video and interactive ads embedded within Web pages, including standard and expandable banners, pre-roll and post-roll ads), and Unicast Over-the-Page (video and interactive ads that float/play over the top of an Internet site page).

Long-form Programming Distribution

The Company delivers its digital video broadcast services through its Digital Media Gateway (DMG), owned and operated by Pathfire, Inc. (Pathfire), its wholly owned subsidiary. The DMG consists of hardware and a suite of software applications that enable content creators and distributors to ingest, digitize, transport, store and prepare digital video media assets for broadcast. The DMG incorporates an Internet protocol (IP) multicast network of satellites and can deliver all forms of video content, including news, Video News Releases (VNRs), syndicated programming, infomercials, and Electronic Press Kits (EPKs). Another feature of the DMG is a terrestrial-based, return-path network, which automatically tracks and notifies the Atlanta NOC of transmission failures, system health problems and content usage data. When notified of a transmission failure, the system automatically resends lost data packets using the minimum bandwidth necessary to complete the transmission. The DMG also uses the terrestrial network to send notification that the complete digital video transmission has been received in the DMG server at the broadcast television station.

Online Creative Research

DGF owns and maintains an online database of content and credits of United States television commercials for the advertising and television (TV) commercial production industry. Its SourceEcreative database includes information relating to commercials, individuals and companies. SourceEcreative allows users to find out, which director, post house, composer or other production resource worked on specific spots, enabling advertising agencies to identify creative and production resources, and to accelerate their creative development process. Information can be provided through fax, phone, e-mail or over the Internet.

Creative and Digital Marketing Solutions

Springbox provides fee-based professional services for creating content and implementing visualization solutions. Springbox provides Web-based marketing solutions for global clients. Springbox provides creative solutions that can be leveraged across the UAP and integrated with the Company’s rich media ad delivery capabilities. Springbox allows the Company to provide full service interactive marketing solutions for its clients.

Media Production and Duplication

The Company’s production and duplication capabilities allow it to provide customers with ancillary services, which are offered in addition to its primary distribution service. Its services include storage of client masters or storyboards, editing of materials, tagging content, dubbing, video duplication and copying of media onto various physical multimedia formats, such as Compaq disc (CD), digital versatile disc (DVD) or tape.

Media Asset Management

The Company’s digital media asset management solution simplifies spot management, access, storage and collaboration for its customers. Its media asset management solution is integrated with its distribution system, enabling automatic archiving of trafficked spots, online search, send-for-review and review-and-approval capabilities, automated digital storyboarding, streaming previews, an order and market data history for each spot, script attachment capability and online search, sort, retrieve and hardcopy fulfillment.

Broadcast Business Intelligence Products

The Company’s broadcast verification solution, through various alternative detection networks, allows its customers to monitor and confirm accurate airplay of their broadcast commercials. This service offering relies on remotely controlled tuners and servers operated by others in secure locations to monitor the stations in each market.

The Company competes with Comcast ADN, TelAmerica, Microsoft, AOL, Akamai, Limelight Networks, Eyeblaster, Eyewonder, aQuantive, DoubleClick, 24/7 RealMedia, Pointroll, Google Inc., Yahoo!, MSN, IAC, MIVA and InfoSpace.