Strategic Review

Zoo Digital Group PLC 01 February 2006 1 February 2006 ZOO DIGITAL GROUP PLC ('ZOO' or 'the Group') STRATEGIC AND MANAGEMENT REVIEW Further to the announcement issued on 23 January 2006, ZOO announces that it has completed its initial strategic assessment and management review. Strategic Review ZOO Digital Publishing Ltd ('ZDP'), ZOO's games publishing business currently focuses on two areas of activity: • Traditional video games publishing on platforms such as Playstation,Xbox, PC etc • The creation and publishing of interactive DVD-Video (iDVD) titles Given the weak prospects for the traditional video games publishing market, ZDP will significantly downscale its video games activities. In addition the Group will undertake a number of cost saving measures in video games operations, many of which have already been implemented. Conversely, the interactive DVD business is demonstrating excellent potential for growth. Sales of iDVD products in general performed well over the Christmas period. ZDP's three products captured 25% of the iDVD market by value with 'Who Wants To Be A Millionaire' at number two and 'Telly Addicts' at number four. Therefore the focus of ZDP moving forward will be on iDVD activities and the Board is considering its strategic options for ZDP as part of the overall review. ZOOtech, the technology division of the Group, continues to make progress with a number of significant contracts and priority will be given to ensuring such opportunities will deliver ongoing revenues. Given the potential growth of the software into the US market ZOOtech is actively seeking a strategic partner to maximise the opportunity. In addition, ZOOtech's DVD-EXTRA technology was used to create nine of the top ten iDVD titles sold in the UK over Christmas. Dr. Stuart Green, who pioneered the creation and application of ZOOtech's unique DVD interactive software technology, will be responsible for leading this strategy. Management Review Ian Stewart has stepped down from his role as CEO and Dr. Stuart Green, currently Chief Technical Officer, will replace him with immediate effect. Ian Stewart will take on a role as Non Executive Director and support Stuart Green in the completion of the strategic review and implementation of the changes assisted by the board including the other independent Non Executive Directors. Dr Green commented: 'Throughout our discussions with Hollywood studios and production facilities it has become clear that ZOOtech's software can make a significant difference to the DVD production process for both current and next generation Video Discs. I look forward to leading this progression in my new role and thank Ian Stewart for his continued support'. Ian Stewart commented: 'The changes made will ensure that the Group is focused on the areas that will deliver growth whilst positioning ZOOtech for its progression in the US. Our new management structure and strategic aims will help us achieve this and I very much look forward to supporting Stuart in his new role'. - ends - Enquiries: Dr. Stuart Green James Chandler/Helen Thomas ZOO Digital Group plc Weber Shandwick Square Mile 0114 241 3700 020 7067 0747 John Llewellyn-Lloyd/Alasdair Robinson 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 ('ZDPL'). 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. ZOO Digital Publishing Ltd ('ZDPL') ZDP focuses on the publishing and distribution of interactive entertainment products across multiple platforms such as interactive DVD, PS2, Xbox, GBA and PC. This information is provided by RNS The company news service from the London Stock Exchange