Trading Statement

Zoo Digital Group PLC
19 January 2007


For immediate release                                            19 January 2007


                             ZOO DIGITAL GROUP PLC
                             ('ZOO' or 'the Group')


                                 TRADING UPDATE


ZOO Digital Group plc today announces an update on trading following the
Christmas period.


ZOO Interactive Video Limited ('ZIV')


Current indications show that the Christmas retail sell-through of the consumer
products created by the now discontinued interactive DVD publishing business,
ZIV are behind our expectations, and consequently results for the Group for the
full year will be materially behind market expectations. The Group closed ZIV,
the interactive DVD title developer, in October 2006 and is retaining revenues
for the products developed prior to its closure.


Although it is disappointing that the financial performance of ZIV is expected
to fall behind original expectations, leading to a significant shortfall in
revenue, this supports the Board strategy to withdraw from the business of
acquiring intellectual property rights for consumer product development.


ZOOtech Limited


Following the refinancing of the Group in September 2006, a strong cash position
of approximately £1.75 million on the balance sheet has allowed the Board to
focus purely on ZOOtech, the technology division. ZOOtech earns revenues from
interactive DVD royalties and its Regionalisation Tool and Templated Authoring
System. Interactive DVD royalties have been affected by the lower than expected
sell-through of these consumer products. However, ZOOtech has been successful in
securing on-going utilisation-based contracts for its Regionalisation Tool and
Templated Authoring System. The Board is confident that these will generate
recurring revenues on a monthly basis, reducing ZOO's dependency on the seasonal
interactive DVD market and creating a more predictable business profile.

The user base for DVD-EXTRA continues to grow and expand into new territories.
Interest from Hollywood studios in the Regionalisation Tool and the Templated
Authoring System, which deliver significant benefits for the video title
production industry, continue to be received enthusiastically and the Board
expects these to build a recurring revenue stream for the ongoing future growth
prospects of the Group.

                                    - ends -

Enquiries:

ZOO Digital Group plc                         Tel: [phone]
Stuart Green - Chief Executive Officer
Helen Gilder - Group Finance Director


KBC Peel Hunt                                 Tel: [phone]
Richard Kauffer


Weber Shandwick                               Tel: [phone]
Chris Lynch/Helen Thomas



Notes to Editors


ZOO Digital Group ('ZOO') is an innovative software solutions company that helps
video publishers and rights owners maximise revenues and profits by exploiting
their content across multiple platforms, languages and territories. ZOO has a
portfolio of over 60 patents (granted or pending) and a depth of knowledge in
digital media processes which has few rivals.


ZOO's key products include:


Interactive DVD software - world leading tool for creating interactive DVDs.
Most of the interactive titles played on any household DVD player are made with
ZOO's software. Notable titles include 'Who Wants to be a Millionaire?',
'Question of Sport' and 'Madagascar - Animal Trivia Game'.


Linear DVD production software - technology to automate the production of linear
(movies & TV shows) digital media. With this automation comes a significant
reduction in time-to-value for the intellectual property, as well as radically
changing the economies of publishing back catalogues.


Multi-language production software - technology to 'localise' text that appears
in digital media. This software automates the localisation process for video
publishers. Previously, highly-skilled technicians were required to manipulate
graphical data. Now, with ZOO's software, text that needs translation is
extracted and replaced with corresponding translations - reducing time, errors
and labour costs.







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