Digital Classics was selected by Investors Chronicle as one of 10 Star Penny Share Buys out of 250 companies analysed

Digital Classics was set up in 1999 to broadcast music via the internet. Unfortunately the business struggled to take off, necessitating a change of direction. So it acquired Iambic, a TV production company that recently produced a programme on the life of Michael Jackson.

Digital Classics now has a vast collection of performing arts content - the bulk comprises classical music, opera and dance. The challenge has been increasing distribution, and the real scope to drive this came earlier this year when the group agreed to acquire rival RM Associates. RM is a leading distributor of music, arts documentaries and performing programming and also has an extensive catalogue and sells this as well as third party products to TV, cable, satellite, in-flight entertainment and DVD supplies.

Digital Classics estimates that the combined group will have a catalogue of over 2,000 hours- at least 3 times greater than that of it's nearest rivals- and it doesnt rule out the possibility of growing it further still. The emergence of themed Digital channels all over the world has led to a surge in demand for arts-related content and Digital Classics is in a strong position in terms of pricing.

Recent results confirmed that Digital Classics returned to profit in the last 2 months of 2003 and a 2m placing has strengthened the balance sheet. Merging with RM provides scope for cost savings and increase margins.

There has been good news coming from DTC for the whole of 2004 but sp has not reflected same.