New Strategic Relationship to Drive Additional Revenue Through Enhanced Services

AUGUST 28, 2006 - China Digital Media Corporation (the "Company") (OTC Bulletin Board: CDGT) announced today that the Company has entered into a subscription and cooperation agreement (the "Agreement") to acquire a minority ownership interest in Arable Media Limited, a Hong Kong registered company ("Arable"), which specializes in the development of middleware software and applications for digital TV set-top-box and digital broadcasting system. The Company will also become the exclusive distributor and wholesaler of Arable's products and applications.

"This strategic relationship will now enable us to develop additional applications for our digital set-top-box," said Daniel Ng, Chairman and CEO of China Digital Media Corporation. "We believe that Arable could assist us in developing customized applications for our digital TV subscribers which could provide new sources of revenue from our existing customers. We will focus on selling these new services in Nanhai and other cities."

For more information on us, please go to our website at http://www.chinadigimedia.com.

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About China Digital Media Corporation

China Digital Media Corporation focuses its business in three main areas: Cable TV Operations, Programs Production and Advertising Sales. Arcotect (Guangzhou) Limited, a wholly owned subsidiary of CDGT in China, is the sole contractor and operator of digital television services in Nanhai, a city with 410,000 cable TV subscribers. As of today, Nanhai's cable television operation provides 148 television channels which comprises of 48 basic channels and 100 pay channels. The pay channels are categorized into various value added packages.

About Arable Media Limited

Arable Media Limited, Hong Kong registered company, is engaged in the business of developing middleware software and applications for digital TV set-top-box and digital broadcasting system to enhance capabilities and functionalities of digital TV set-top-box such as those deployed by the Company in its digital roll-out program in the City of Nanhai. Arable Media Limited owns certain technologies in MPEG2 video processing for digital TV broadcasting.

For more information, please contact:

Investor Relations
China Digital Media Corporation
Tel: +852-2390-8600

Daniel Schustack
CEOcast, Inc.
Tel: +1-212-732-4300