Company Information

Information about ZOO is provided in the following sections:

ZOO Digital Group plc is an international software company that creates software based solutions to automate real world situations where video and printed media are adapted into different formats and languages. ZOO has unique experience in the localization of a wide variety of products, from printed marketing materials to web sites, product packaging, marketing materials, digital video products, books, DVDs and Blu-ray Discs.

We are generally focused on the worldwide digital media production markets, particularly entertainment, where our customers include Hollywood studios, music and book publishers and other producers and publishers of creative media products. Our software technologies transform digital workflows through re-engineering traditional processes, and we provide a range of associated implementation, production and custom development services.

We have experienced staff with an in-depth knowledge and understanding of our target industries. Our localization team has extensive experience in the implementation of various localization strategies and is knowledgeable in the key territories of Europe, Asia and the Americas.

Company Overview

ZOO provides software and related services that support the authoring, re-purposing and distribution of creative media. ZOO’s software works with printed materials, audio and visual content, and can adapt these materials to different languages, sizes, and technical formats. The business licenses its software and also provides implementation, creative and production services to make this process extremely quick and cost effective and clearly differentiated in the market.

ZOO is distinct from competitors in that it combines a software product development facility creating proprietary software systems together with an allied creative and production unit. ZOO’s services, which were developed initially for the home entertainment industry, are highly attractive to any global business that is looking to streamline the way it manages its content distribution and brand identity.

The ZOO proposition offers very impressive efficiencies in both time and money, and is therefore particularly well positioned to succeed in a tougher economic climate.

ZOO generates revenues through the licensing of software based workflow solutions which are charged on a recurring basis, and through the provision of related value-added services .

ZOO employs over 100 staff in its office locations in the UK and USA. The company is headquartered in Sheffield, UK, where it operates its software product development facility, creating its Media Collaboration Platform to enable significant efficiencies for a wide range of production and creative services. ZOO’s commercial centre and production facility are based in Los Angeles, California, from which it operates teams engaged in providing creative and production services for clients primarily in a number of industries including entertainment and book publishing. The Los Angeles location places ZOO close to the major Hollywood studios, a number of which are significant customers.

Customers include some of the world’s largest entertainment groups for which ZOO has deployed its software solutions and also provides a range of services to cost efficiently repurpose existing media associated with feature films, episodic TV content, videogames, books and other consumer products into a variety of different language and format versions and other derivatives. This enables ZOO’s customers to create international products and marketing campaigns more quickly, efficiently and at a lower cost.

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History

ZOO Digital Group was founded in 2001 through a merger of two UK businesses – Kazoo3D plc and ZOO Media Corporation Ltd. – with an initial focus on the development of entertainment software across a variety of platforms including the internet and set-top boxes. Its work in the field of creative media repurposing began in 2003 as a result of an exploratory project to identify more efficient processes for assembling interactive video content on DVD and other platforms.

The company pioneered the development of rich interactive media for inclusion on DVD-Video discs, opening up a range of new applications of this format in the areas of casual gaming, entertainment, marketing and education. Through the use of its proprietary software, ZOO has been either directly or indirectly responsible for a wide range of consumer products created on behalf of international media companies including Disney, Universal Pictures, EMI, Mattel, Hasbro and Warner Bros. Over a number of years, ZOO engaged with toy companies, DVD game publishers and Hollywood Studios to produce award-winning DVD games for all ages. ZOO’s approach combined the creative and technical elements when producing a game in order to ensure the highest quality, best value and most compelling experience.

ZOO’s innovative DVD software provided inroads into major video publishers including a number of Hollywood studios with which ZOO began working in 2005 on a number of new initiatives. ZOO’s strength lies in analysing current practices, methods and workflows for media preparation and identifying alternative approaches where workflow management, software automation and centralization of processes can bring significant benefits. This has been brought to bear on a number of activities that take place during the complex process of producing creative media products and elements for international release.

In 2006 ZOO created software to automate the regionalization of video title content into multiple languages. This software is now being used by organizations within Hollywood to reduce the costs and time-to-market of international marketing campaigns where it provides ZOO with a recurring revenue stream.

In 2007 the company’s Media Collaboration Platform was broadened to support the preparation of the digital data incorporated on DVD-Video discs to ensure compliance with exacting technical specifications and demanding customer requirements. This software is now used by leading Hollywood studios to create video titles for worldwide release, reducing the time taken by as much as 90%, and generating recurring revenues for ZOO. Studios benefit from reduced costs, shorter time to market, greater reliability and ease of production. In some cases administrators employed by the studios are now performing production functions that hitherto were outsourced to skilled and experienced technical experts.

In August 2007 ZOO acquired the business assets of Scope Seven Inc, a DVD services specialist based in El Segundo, California. This enabled ZOO to broaden its offering to include creative and production services aligned with its proprietary software, providing an attractive mix of software and service. The group has since been fully integrated and now operates as the implementation services arm of ZOO Digital. Scope Seven served the entertainment sector from the inception of the DVD format, with clients including Warner Home Video, 20th Century Fox, NBC/Universal, HBO and the BBC, amongst many others.

ZOO’s media repurposing capabilities were extended still further in 2008 with the development of software systems to support the automated adaptation of print media into different languages, formats and sizes. This capability is applicable to any company engaged in international marketing campaigns and enables the time and cost associated with production of adapted elements to be reduced by up to 50%. These systems are now in use by and on behalf of major Hollywood studios to create product packaging, posters, point of purchase and other print artwork across multiple languages, and provide recurring revenue to ZOO.

In 2009 ZOO’s product suite was extended further with its first on-demand solution – the Translation Management System (TMS). This system is used to manage and co-ordinate international marketing campaigns, including the translation of text into over 60 languages, and is fully integrated with ZOO’s desktop software tools. The TMS is licensed on a “Software as a Service” basis, generating recurring revenues.

ZOO secured UK government funding of £350,000 in late 2009 from the Technology Strategy Board to work on a research project entitled Commercialising Motion Picture Archives. This project, which includes the British Film Institute as a partner, will deliver systems that deal with the enhancement and repurposing of film and video materials and their adaptations into multiple commercial formats.

In 2010 ZOO launched a new toolset for automatically creating localized Blu-ray Disc titles for multiple languages. The regionalization capabilities of the Blu-ray automated authoring toolset are delivered through integration with ZOO’s Translation Management System. Both systems were adopted by major Hollywood studios during the year.

ZOO formed a strategic partnership in 2010 with a large US packaging specialist, Multi Packaging Solutions (MPS). MPS made an investment in ZOO and the two companies began collaborating together to secure sales of ZOO’s products and services in a number of new markets.

In the same year ZOO launched a new toolset, the Interactive Content Editor, to support the automated preparation of Electronic Sell Through products for Apple’s iTunes and other platforms, and announced that a major Hollywood studio had begun using this solution.

The first fruits of the partnership with MPS came in 2011 in the form of the adoption of ZOO’s software by a videogame publisher.

Over several years of working closely with leading film studios ZOO has benefited from the experience of dealing first hand with the complex product development and marketing programmes that are typical in the entertainment industry. These insights have allowed the company to identify opportunities for new software systems that automate and centralise workflows and processes, enabling ZOO to create attractive propositions for its customers that are priced to provide time and cost savings while generating recurring revenues for ZOO.

ZOO’s diversification into wider markets began in 2011, in part through new customer wins brought about by the MPS partnership, and in part through a broadening of the product set.

In June 2011 ZOO announced its progress in the music and book publishing industries, the former achieved through building on the success of the iTunes production toolset, and the latter as a result of the development of the ZOO eBook Builder. This addition to the Media Collaboration Platform provides book publishers with an efficient and cost-effective way to repurpose traditional books for sale online, across a wide range of genres including picture books, comics, travel guides, cookery books and reference publications. This new tool works in conjunction with ZOO’s software for managing collaborative workflows, adapting materials into multiple languages, and providing storage and distribution of content for multiple eBook vendors. ZOO began working with a number of traditional publishers in the US and Europe to enable high quality adaptations of existing products for sale online. According to a recent report from Futuresource Consulting, in 2010 the eBook market grew by more than 200% to a value of more than US$900m.

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Market and Industry Overview

ZOO’s products and services address a requirement that exists within many markets and industries where content and/or products are made in one form and then repurposed for international exploitation. For example, when a consumer product is created in North America, the packaging and marketing materials for that product must be translated and conformed to the local conventions and requirements of each of the countries in which the product is to be sold.

ZOO initially focused primarily on the US entertainment industry which has a clear need to capitalize on the investment in filmed content by exploiting products internationally. ZOO’s expertise in the area of video content makes the entertainment industry particularly attractive due to the range of complementary services the company can offer. More recently the company has expanded into other markets and industries, including videogames, music and book publishing.

Using the entertainment market by way of example, it is usually the case that a client will initially create a new product, such as a feature film, for the domestic North American market. Consequently, the language of the soundtrack, any captions, credits and title sequences will all be in US English, and all posters, advertising materials and other print items will be designed for the North American consumer. As the product is adapted for the home entertainment market the video and audio will be digitized, compressed and encoded for a variety of distribution formats including DVD, Blu-ray Disc, Electronic Sell Through and Video on Demand. Product packaging will be created together with the print materials to support the US marketing campaign.

The international exploitation of such a product has traditionally involved a complex, costly and labour intensive process to create translations of all dialogue and visible text elements for each language required by the studio’s marketing department. For a new movie release from one of the major Hollywood studios there could be 60 or more different language variants that are needed. Traditionally each variant has been created by starting with the domestic US content and manually applying local language treatments. In this way, the original version is repurposed to yield new language variants, each of which may be exploited across multiple viewing and distribution platforms, giving rise to the need for yet more product adaptations. Such product/language versions are typically created by service vendors operating either close to the studio (in the case where this regionalization work is centralized) or in the foreign territories.

The traditional solution to this problem is provided through the use of human labour. Given that the work of transforming a video product for different platforms and languages is a repetitive process, in a manual workflow this incurs significant cost and time. It is also vulnerable to human error.

ZOO’s products and services are targeted at organisations that wish to repurpose existing content into different language and format variants. What differentiates ZOO’s offerings is that its Media Collaboration Platform is employed to drive significant efficiencies, enabling work to be done more easily, in less time and at lower cost. ZOO’s expertise lies particularly in the fields of video and print, and its proposition is therefore well suited to entertainment companies, publishers and other producers of globalized consumer goods.

ZOO is working currently with major Hollywood studios, other video producers, videogame companies and book publishers. In some cases its technologies are licensed for use in-house by the client’s staff, and for others ZOO provides creative and production services to deliver a highly competitive alternative to the traditional vendors. In all cases customers enjoy more reliable results in a shorter timeframe at a lower cost.

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Strategy and Objectives

ZOO competes with traditional service providers operating in a number of industries that typically perform their work using exclusively off-the-shelf software systems. For example, professionals working with graphical elements for digital delivery or print will use software tools such as Adobe® Photoshop® or Adobe InDesign®. ZOO’s strategy is to offer easy-to-use software that works in conjunction with standard industry packages together with highly competitive services delivered using this software. ZOO’s approach transforms traditional workflows through the use of automation and by redefining processes to bring new efficiencies and benefits. This software enables ZOO to offer a significant competitive advantage resulting in solutions that can be delivered at lower cost to produce results more quickly and reliably.

ZOO generates its revenues by licensing software using a recurring revenue pricing model, and by providing related value-added production and creative services. Through the use of its proprietary automation software, ZOO can scale its operations relatively easily and capitalise on the large and growing international market for creative media authoring, re-purposing and distribution.

The efficiencies of ZOO’s approach enable customers to reduce the time to market of their consumer products. In the home entertainment market this is a particularly valuable selling proposition at a time when counterfeit products result in significant lost revenue for the studios. By reducing the time between release in movie theatres and the availability of DVD and Blu-ray products, the window of opportunity for illegal copies is shortened, thereby curtailing some of the lost revenue that would otherwise be suffered.

ZOO focuses its product development and service offerings on three main types of content:

The company has developed a Media Collaboration Platform that delivers differentiation and competitive advantages in these areas.

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Products and Services Overview

ZOO’s proprietary Media Collaboration Platform is a modular system that delivers significant efficiencies in a number of areas including:

Through its facilities in both Los Angeles and the UK and also in conjunction with international business partners, ZOO provides a range of complementary services that includes:

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