Update on US Strategy

Zoo Digital Group PLC 18 October 2005 18 October 2005 ZOO DIGITAL GROUP PLC ('ZOO' or 'the Group') ZOO OUTLINES US STRATEGY Further to a separate statement made today, ZOOtech Ltd ('ZOOtech'), the DVD technology division of ZOO Digital Group plc, has announced its future strategy and outlined market opportunities in North America. Management Focus on US Market Given the market size of DVD production and the large relative size of individual deals for its technology, ZOO is looking to further develop its US business and will focus greater resources and management time in driving sales in this area. In particular Board members Robert Deri (CFO) and Dr Stuart Green (CTO) will be working more closely on the opportunities that the US presents. As a result of this greater focus at a Board level, Cees Zwaard, CEO of ZOOtech will be leaving the business. Specific activity will include deepening existing relationships with the major organisations and working closely with customers regarding process improvement, reduction of client in-house production budgets and software solutions to meet client's requirements for next generation HD-DVD and Blu-Ray. As part of this activity two members of the technical staff are relocating to the US on long-term secondments in order to work closely on current developments and future opportunities. Hollywood Studio Market Menu Regionalisation is only one of a number of applications for the DVD-EXTRA STUDIO technology. In addition to ZOO seeking further menu regionalisation opportunities in Hollywood, the Group is developing other DVD-EXTRA STUDIO based products in conjunction with major entertainment corporates and Hollywood studios. Significantly, the technology has proved to be compatible with production systems and compliant with the DVD industry's extremely high standards. It is anticipated that both the number of studios using the technology, and the number of applications for the technology, will grow considerably. Ian Stewart, Chief Executive of ZOO Digital Group plc commented: 'Our technology is being increasingly used by a number of organisations, has been rigorously tested and is completely proven. Its potential, both in terms of the number of customers and applications, is huge and we are now focusing on maximising the opportunities Hollywood and the US present and building on the very important relationships we have worked so hard to establish.' - ends - Enquiries: Rob Deri CFO, ZOO Digital Group plc 0114 241 3700 James Chandler/Helen Thomas Weber Shandwick Square Mile 020 7067 0747 John Llewellyn-Lloyd Noble & Company Limited 020 7763 2200 Notes to Editors: About ZOO Digital Group PLC ZOO is divided into two separate divisions; ZOOtech Ltd ('ZOOtech') and ZOO Digital Publishing Ltd ('ZDP'). ZOOtech Ltd ('ZOOtech') ZOOtech focuses on R&D and licensing of DVD-EXTRA, the Group's highly original development software capable of creating complex interactive content for standard DVD players. The strategy for ZOOtech is simple; to create the industry standard tool for the production of interactive DVD content and drive revenues through licensing worldwide in a combination of up front fees and royalties. About Menu Regionalisation The 'DVD-EXTRA STUDIO Regionalisation Utility' automates the creation of all regionalised DVD's. The technology maximizes customers' time by using the original menu as the template to automatically create different language or regionalised versions. The regionalisation process is therefore standardised removing error prone manual processes and improving productivity. More importantly, each customer can leverage the assets created for one project by storing translations and then use these translations for subsequent projects. Translation costs are reduced as dictionaries are standardised and formatting of menus becomes flexible based on the rules created for each regional version. The cost reductions and labour savings are directly proportionate to the number of languages used on a project i.e. the cost savings rise as more languages are used. This information is provided by RNS The company news service from the London Stock Exchange