Onstream Media Reaffirms Strategy and Long-Term Business Outlook Amidst Shareholder Inquiries about Decline in Common Stock Price POMPANO BEACH, FL – September 12, 2008 – Management of Onstream Media Corporation ( OTC: ONSM ), a leading online service provider of live and on-demand digital media communications and applications, today expressed continued confidence in its long-term business outlook. The comments were in response to shareholder inquiries regarding the decline in the Company’s share price. Randy Selman, Onstream’s CEO stated, “Onstream remains well-positioned to benefit from the ongoing demand for media distribution via the Internet. We believe we have the most robust tools available in the industry, and a growing customer base of top-tier corporations who are increasingly looking for solutions that allow them to monetize and distribute their rich media content. The pending acquisition of Narrowstep provides us with one of, if not the last, key components we need for the Digital Media Services Platform. In addition, this strategic acquisition gives us additional resources to execute our strategic plans. Despite these challenging market conditions for publicly traded companies, and in particular for small-cap stocks like Onstream, we believe that Onstream remains well positioned.” Management, during its fiscal third quarter conference call, increased full-year fiscal 2008 guidance to a record breaking $17.5 million in revenues, representing 45% year-over-year top-line growth. This estimate includes the contribution from Infinite Conferencing and is an increase compared to the previous guidance of approximately $17.0 million. This guidance does not include our key catalysts for growth including Qwest, the Auction Video initiatives and sales of iEncode, which are not expected to result in any meaningful revenue contribution for the remainder of fiscal 2008, although management expects them to positively impact 2009 revenues. About Onstream Media: Select Onstream Media customers include: AAA, AXA Equitable Life Insurance Company, Bonnier Corporation, Dell, Disney, National Press Club, NHL, MGM, PR Newswire, Televisa, BT Conferencing, Shareholder.com (NASDAQ), and the U.S. Government. Onstream Media's strategic relationships include Akamai, Adobe, eBay, FiveAcross/Cisco and Qwest. For more information, visit Onstream Media at http://www.onstreammedia.com or call 954-917-6655. Media Relations: Investor Relations: Cautionary Note Regarding Forward-Looking Statements Certain statements in this document and elsewhere by Onstream Media are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward- looking statements include, but are not limited to fluctuations in demand; changes to economic growth in the U.S. economy; government policies and regulations, including, but not limited to those affecting the Internet. Onstream Media undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in Onstream Media Corporation's filings with the Securities and Exchange Commission . Additional Information and Where to Find It Onstream intends to file with the SEC a Registration Statement on Form S-4, which will include a joint proxy statement/prospectus of Onstream and Narrowstep and other relevant materials in connection with the proposed transaction. THE JOINT PROXY STATEMENT/PROSPECTUS WILL BE MAILED TO THE STOCKHOLDERS OF ONSTREAM AND NARROWSTEP. INVESTORS AND SECURITY HOLDERS OF ONSTREAM AND NARROWSTEP ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ONSTREAM, NARROWSTEP AND THE PROPOSED TRANSACTION. The joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by Onstream or Narrowstep with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. Investors and security holders may obtain free copies of the documents filed with the SEC by Narrowstep at narrowstep.com or by contacting Narrowstep Investor Relations via telephone at (609) 945-1772. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Onstream at www.onstreammedia.com or by contacting Onstream’s Investor Relations via telephone at 646-536-7331. Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction. Narrowstep and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Narrowstep and Onstream in favor of the proposed transaction. Information about the directors and executive officers of Narrowstep and their respective interests in the proposed transaction will be available in the joint proxy statement/prospectus. Onstream and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Onstream and Narrowstep in favor of the proposed transaction. Information about the directors and executive officers of Onstream and their respective interests in the proposed transaction will be available in the joint proxy statement/prospectus. |