Placing

Zoo Digital Group PLC
19 November 2003

19 November 2003



                             ZOO Digital Group plc
                        ('ZOO Digital' or 'the Company')


       Placing of New Ordinary Shares and Notice of Extraordinary General
                                Meeting ('EGM')


                         Seeking to raise £5.75 million
 Placing of 54,761,904 New Ordinary Shares of 0.2p each at a price of 10.5p per
              share with new and existing institutional investors


ZOO Digital Group plc announces today it is seeking to raise £5.75 million
before expenses through a placing with new and existing investors of 54,761,904
New Ordinary Shares of 0.2p each at an issue price of 10.5p per share to provide
additional funds to continue the development of its business.


Funds raised will be used to:


•  Accelerate the development of the Company's DVD-ExtraTM technology

•  Invest in sales and support in Europe (including the UK) USA, and the 
   Far East

•  Further invest in comprehensive patent protection and filing of additional 
   patents

•  Provide additional working capital to continue the development of the 
   business and to repay the Company's long-term indebtedness.

It is envisaged that funds raised will be allocated 40 percent for the
development of the DVD-ExtraTM technology, 25 per cent for investment in sales
and support, 10 per cent for investment in patent protection and filing of
additional patents and the remainder to provide additional working capital for
the business.

Attached to this announcement are extracts from the circular, which sets out the
background to the proposals and further details on them.  Copies of the
circular, including the Notice of EGM, will be posted to shareholders today, and
are available from the Company's Nominated Adviser and Broker, Noble & Company
Limited, 76 George Street, Edinburgh, EH2 3BU, free of charge, for a period of
one month.

Ian Stewart, chief executive officer of ZOO Digital commented:

'We are delighted with the support that investors have shown.  ZOO is now able
to move the business forward at a greater pace to ensure we maximise the many
and varied opportunities that exist with DVD-ExtraTM technologies.'


For further information please contact:

Ian Stewart, Chief Executive, ZOO Digital Group plc           0114 241 3700

Robert Deri, Finance Director, ZOO Digital Group plc          0114 241 3700

John Llewellyn-Lloyd, Noble & Company Limited                 0207 367 5600

James Chandler/Gemma Smith, Beattie Financial                 0207 398 3300


The following text is an extract from the circular that has today been
despatched to shareholders:


Introduction

Your Board today announced proposals for a capital raising to provide the
Company with additional funds to continue the development of its business. The
Company is seeking to raise £5,750,000 gross of expenses as set out herein. This
is to be effected by means of a placing with new and existing institutional
investors of 54,761,904 new ordinary shares of 0.2p each in the capital of the
Company ('New Ordinary Shares'') at an issue price of 10.5p per New Ordinary
Share ('the Placing'').

Ian Stewart, Chief Executive Officer, has undertaken to subscribe for 7,142,857
New Ordinary Shares in the Placing at the issue price of 10.5p per New Ordinary
Share. This is deemed as a related party transaction under the AIM Rules.

The Placing is conditional upon the passing of a resolution by the Company's
shareholders at an extraordinary general meeting ('EGM'') approving the Placing,
authorising the allotment of shares and approving the disapplication of
pre-emption rights ('the Placing Resolution''), and admission ('Admission'') of
the New Ordinary Shares to AIM, a market operated by the London Stock Exchange.
The purpose of this document is to provide you with information about the
Placing and explain why your Board considers the Placing to be in the best
interests of the Company. Application will be made to the London Stock Exchange
for the New Ordinary Shares to be admitted to trading on AIM. It is expected
that, conditional upon the passing of the Placing Resolution at the EGM,
dealings in the New Ordinary Shares will commence on or around 17 December 2003.
The New Ordinary Shares will rank pari passu with the existing ordinary shares
in the Company.

Notice of the EGM to be held at 10 a.m. on 12 December 2003 at the Company's
offices at Parkhead House, 26 Carver Street, Sheffield, S1 4FS, at which the
resolutions to enable the Placing to take place will be proposed, is set out on
page 6 of the circular sent to shareholders today.


Background to and reasons for the Placing

The Company specialises in the development and publishing of interactive
entertainment for various digital platforms including DVD, PS2, Game Boy
Advance, PCs, public consoles and fixed Internet.  In addition, the Company has
also developed a technology called DVD-Extra which enables complex interactive
content to be developed for standard DVD players.

The Company was admitted to trading on AIM in 2000, as KaZOO3D plc and
subsequently merged with The ZOO Media Corporation Limited in May 2001, before
changing its name to ZOO Digital Group PLC. It has recently signed a second
exclusive licensing agreement with Vision Video Limited, a subsidiary of
Universal Pictures UK, to create an interactive football DVD game using its
DVD-Extra authoring system.

The Company has strong expertise in two areas, games publishing and DVD
authoring software.

In gaming, the Company concentrates mainly on licensing and publishing existing
games rather than on the development of new titles. The Company has published
and distributed a catalogue of quality titles predominantly on GBA, PS2 and PC
platforms.

In DVD, the Company has developed a technology called DVD-Extra. The software
enables DVD authors to introduce new interactive functionality, playable on
standard DVD players, to the DVD. It vastly reduces the time and cost taken to
produce such content.

The Directors believe that there is an opportunity to raise funds from a small
number of institutional investors at the present time, and wish to avail the
Company of this funding. Your Board has decided to effect the fundraising by way
of a placing following a limited marketing exercise, rather than offering all
shareholders the opportunity to acquire shares in an offer as the costs, and,
more particularly, the time taken to produce a prospectus may adversely affect
the Company's ability to raise the required funds. In addition, given the
current shareholder structure, in which the Directors hold over 32 per cent. of
the share capital, the take-up in any pre-emptive offer would, in all
likelihood, be relatively low.


Use of funds

The funds raised under the Placing will be used:

   •   to accelerate the development of the Company's DVD-Extra technology;

   •   to invest in sales and support in Europe (including the United Kingdom), 
       the USA, and the Far East;

   •   to further invest in comprehensive patent protection and filing of
       additional patents; and

   •   to provide additional working capital to continue the development of
       the business and to repay the Company's long term indebtedness.

It is envisaged that the funds raised will be allocated 40 per cent as to the
development of the DVD-Extra Technology, 25 per cent as to the investment in
sales and support, 10 per cent to investment in patent protection and filing of
additional patents and the remainder to provide additional working capital for
the business.


Taxation

On 17 November 2003 the Company made written application to the Inland Revenue
for approval that the Company is a relevant company for the purposes of Schedule
28B ICTA 1988 and that as such the New Ordinary Shares will be regarded as
eligible shares for the purposes of an investment by a Venture Capital Trust.

By the same letter, approval was sought from the Inland Revenue that the present
activities and organisation of the Company, with regard to its status as a
company quoted on AIM, are such as to enable the Company to issue certificates
confirming the eligibility of the New Ordinary Shares for the purposes of the
Enterprise Investment Scheme.

Detailed legislation exists in respect of qualifying investments by both Venture
Capital Trusts and under the Enterprise Investment Scheme, which sets out
conditions that must be met by both the Company and the investors in it.

Whilst the Directors are not currently aware of any reason why shares in the
Company should not qualify for relief under the relevant legislation, investors
should seek advice from their own advisers to ensure that their circumstances
comply as required by this legislation.

The Directors intend to apply to the Inland Revenue for confirmation that an
investment in the Placing shares may be treated as a qualifying investment for
VCT and EIS purposes following Admission.


Extraordinary General Meeting

On page 6 of the circular sent to shareholders today is a notice convening the
EGM of the Company to be held at the Company's offices at Parkhead House, 26
Carver Street, Sheffield, S1 4FS at 10 a.m. on 12 December 2003, at which the
Resolutions set out in such notice ('the Resolutions') will be proposed.


Recommendation

The Directors (other than Ian Stewart) consider, having consulted with Nobles,
that the terms of the Placing are fair and reasonable insofar as the Company's
shareholders are concerned. Accordingly the Directors (other than Ian Stewart)
consider the approval of all the Resolutions, including the Placing Resolution
upon which the Placing is conditional, to be in the best interests of the
Company's shareholders as a whole.

Your Directors (other than Ian Stewart) unanimously recommend you vote in favour
of the Resolutions, as they have irrevocably undertaken to do in respect of
their own beneficial holdings amounting to, in aggregate, 19,700,708 Ordinary
Shares, representing approximately 8.76 per cent. of the current issued share
capital of the Company.

As a related party under the AIM Rules, Ian Stewart has not taken part in the
Board's deliberations in relation to the Placing.

                                    - ENDS -


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