DVD EXTRA, the technology that should see this company through to profits and a very bright future.
DVD-Extra

During the year the Group accelerated its development of a revolutionary
authoring software for producing interactive DVD-Video discs that will play on
any standard consumer DVD player. We applied for and received a SMART grant
award of 188,000 from the Department of Trade and Industry to assist with the
research and development. DVD-Extra unlocks the hidden interactive capabilities
that exist in every player, and allows developers to produce titles that exhibit
many of the properties of multimedia CD-ROM on a standard, unmodified, DVD
player.

ZOO's principal offering is a product for authoring interactive DVD-Video discs
called DVD-Extra Studio. This tool operates in a similar way to multimedia
authoring products that are designed for creating CD-ROM applications for PC and
Macintosh, but produces DVD-Video disc images as its output. It performs a
similar function to so-called DVD authoring products that are designed
specifically for creating DVD-Video discs, but due to the patent-pending
authoring method it employs, it offers substantial cost savings for companies
that are involved in the production of DVDs and also enables more sophisticated
functionality to be developed.

ZOO will license DVD-Extra Studio to multimedia developers and Compression and
Authoring facilities. Charges will be levied on a pay-per-use basis, such that
customers will pay a fee to ZOO for each project that uses DVD-Extra Studio.

The Group has applied for patents to protect the core DVD-Extra technology and
is continuing to further develop and protect its intellectual property
worldwide.

Outlook

Following the successful fundraising of 1.5m gross through the share placing
which was completed on 2nd June 2003 the Group looks forward to positive
progression. The portfolio of products is expanding, with a focus on the
development of our own intellectual properties. The board believes that the
combination of publishing low risk licensed product and in-house own brands
together with the huge potential of DVD-Extra Studio places the Group in an
excellent position for a move to profitability and significant future growth.

The Group plans to exploit the DVD-Extra technology internationally and has
established an Early Adopter Programme consisting of around twenty companies
including Technicolor, Warner and Comchoice, leading to the first commercial
release of the product within twelve months. We believe that the uniqueness of
DVD-Extra and the filing of international patents will allow ZOO to build and
maintain significant differentiation over other authoring tool providers.

John Barnes, Chairman

Ian Stewart, Chief Executive Officer.G

yes skids its been about the websites since the beginnig of the month
newswire seem a bit slower than some,i hope the game does better on pc
not too well liked on other formats,but i believe they have improved it,

Can't understand the drop today when the prospects for the company sound better than ever.
As usual, patience will reward holders.

WT.

Walktall...it is cos' of the profits being less than expected but the rest of it very positive. Zoo is a good long term share I shall keep it tucked away. It doesn't owe me anything as I have doubled my money on two separate occasions on Zoo so I shall wait.

Di

Me too Dynamite.

WT.

I think the drop will be short lived. Possibly a lack of stock has shifted it down.

skids

Citywire tip: Feeding time at the Zoo
Published: 16:30 Friday 18 February 2005 TOTAL PAGES: 5
By: Joanne Wallen

Zoo Digitals shares plunged nearly 11% today, but the bad news is short term and the fall could well be a buying opportunity.


http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=72187

azhar

Thanks for that. Exactly my thoughts, but went out for tea with the grandchildren without finishing my ruminating, on ZOO thoughts, that is, though our tea-party was also a bit like the zoo with Grandad making monkey faces through one of these windows with what looks like a bottle bottom. Blast, now Di will think I'm rather old - second thoughts; she may like her men more mature! Will get onto it sharp on Monday.

Eric

Here Eric...old boy :-) every post you make has me in it...you are building me up as a superstar...I ain't- just good at the mo at picking good stocks. All this praise and I am bound to fail (I don't really think I will fail though). 2005 is looking to be an exceptional year and I know you have alot of the same stocks. Have a look at my latest two stocks GFM and HYR.

Zoo is not doing so well price wise at the mo....but the potential is still there. I am hoping for some positive stuff in the papers today.

Eric you should come to the TRaders Day on the 8th April...or do you have to work, if so how do you manage to be so active on here, especially as an old man 8-) tease...hehe.
Di

di: Its true that great minds think alike, although they also say that fools seldom differ. I think the former is OK here as we are both steaming ahead with similar portfolios. Will look at GFM and HYR although getting to mental saturation point. Haven't done a Traders Day - presumably details are up top. Seen anything in the press on ZOO? Any kids pre-school? I'm fascinated by this Bubble of BGT - with the Bondai contract, I think there is a long way to go.

Eric

http://press.arrivenet.com/ent/article.php/595517.html

Hiya Eric...Hopefully we will have a wonderful year as you say our portfolios are similar and I now have VTI as well as I could not decide between HYR which was sold off from VTI and the parent VTI. Of my three new shares GFM is the best short term bet I think and I don't think it will be very long before it reaxhes the 'magic' pound. I bought some more of it yesterday.

No Eric my children are 10, 12, 12 and 14 so not much trading going on this week being half term and I must get the VAT return finished by the end of tomorrow. Yes details of the Traders Day 8th April is on of the BB's should be interesting. I am gearing up for full scale spread betting from September onwards when our youngest goes to high school and no more school runs for me! Yay. Guess you have all that to come.

Zoo well Ake has posted another bit of news and lets face it Zoo seems to have lots of snippets but no real news. I think it will be a while before Zoo comes good. Although I remember Oct 2003 when it flew upwards and I bought and sold it twice and doubled my money twice in a week. It will only take a good RNS or AFX and it will be away so Zoo is a good share in a varied portfolio IMHO.

I'll have a look at BGT Eric.
Di

Hi Di Twins, eh! Boys or girls and are they identical? Double trouble we used to call ours - in primary they really got in the neck: what would happen was that Sally would be in trouble, teacher would sort her out only to hear a noise from the other side of the room and Jill was the cause. Amazing what they are up to now after failing 12+. Our sequence was boy, twin girls, girl; one in Phuket now, one in Vancouver, one recently back from Tajikhistan and in Canmbridge; the loyal one as Sal calls herself, in London.

Go for CFDs I would say: not that I've tried spread-betting, but CFDs if you play them with a degree of care, are terrific multipliers and I just don't see a downside. SOS from Jill in Phiket at the weekend: wanted to buy a bungalow and needed a deposit of 20K. Not a problem I said having totted that up comfortably since January, you would have thought for that very reason! the next SOS was from Vancouver - you could just go on...

I see Zoo as one for a relatively small stake and put it by rather than to trade it. Will top up as opportunity has it and be ready for a bigger move. I read the trading statement as very bullish although the market was disappointed, but I saw the real news as the improved prospects for the current year.

Look forward to meeting you at Traders Day. Eric

ZOO DIGITAL
Summary
Synopsis
Investors should expect to see some real breakthroughs
from ZOO Digital Group over the next 12 to 18 months.
The games publishing arm, which generates the bulk of group
revenues, is set to grow substantially on the back of its
new interactive DVD titles and a
shift to licensing and distributing fewer, higher quality,
games titles. The technology division should announce contracts
with large-scale users of its DVD authoring platform,
underpinning its contribution to profits from 2005 onwards.

I wish!

Nice positive move so far today.

http://www.gamesindustry.biz/press_release.php?aid=7186

Buy Zoo Digital Group at 12p*
Writes Mick Baxter, Video games specialist
As I mentioned with my BIT tip last month, computer videogames is one of the fastest growing and most lucrative sectors in retail. The same can be said for DVD's. In fact the No.1 DVD last year, Shrek 2, far outsold the No. 1 video game, GTA: San Andreas. Hollywood studios count on DVD sales and rental revenues to offset ballooning movie budgets and those sales in 2004 were a record $15 billion. ZOO Digital Group is a play in both sectors.

ZOO recently put out a trading statement which was initially seen as a disappointment by the market. However the in-depth statement gave an insight as to how far ZOO has grown, and is well positioned to continue to grow within the computer videogame and DVD sectors. There are deals already in place that will add significantly to next year's revenue and indications of many others, close to signing, that I believe will totally change investors' perception of the company.

The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital although the potential returns are theoretically unlimited. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares.

Knowledgeable investors within the gaming sector have had two main problems with ZOO. One is that it's publishing arm is aimed at lower margin products and the other that interactive DVD games cannot compete with AAA PC and console titles in terms of gaming experience.

As for the first issue, not only has the quality of its catalogue improved, mostly recently shown by Psi-Ops scoring 80% in PC Gamer, but their distribution is expanding across the globe. ZOO Digital Publishing is set to approximately double turnover to 11 million pounds by year end. It is not burdened with development risk as the majority of products are purchased fully complete on a royalty basis from third party developers. With the expected decrease in console prices leading into next generation consoles, ZOO look well positioned to continue their impressive growth.

Secondly, the complaint that interactive DVD games can't compete with PC and console titles is irrelevant. The truth is they can't, but they are not intended to. 'Who Wants To Be A Millionaire?' is in effect a modern parlour game, just like 'Trivial Pursuit' was in its day. Even so, in the lead up to Xmas, an interactive DVD game developed by ZOOtech reached the heady heights of No.23 in the UK 'All Format Game Charts'.

ZOOtech is not just about DVD games, it is a premier provider of tools for the production of interactive DVD-Videos. The tools which are being patented world wide are transforming the use of DVDs the world over. 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 via a combination of up front fees and royalties.

To get an idea of how its many uses are growing, a read of the recent trading statement is a must, even though I believe it to be deliberately understated. For instance, the statement gave Snap TV this brief mention: "In entertainment we are working closely with several companies on products and roadmaps for iDVD games. These include 'Snap TV' with two major trivia games and the French game company Microids has signed a license agreement to produce a major adventure game, expected to be launched by the end of 2005."

A few days later, ZOOtech in the US issued a press release about the launch across America of these two games. They are an NCAA licensed American Football game and a Basketball Trivia game. This is in fact the same licence that Electronics Arts have on other formats that in the US sell over two million games every year. The comments from Snap TV also endorse the product and give an insight as to why 'DVD Extra' could become the tool of choice: "DVD-EXTRA offered us incredible flexibility. We changed designs on the fly and automatically updated projects to reflect those changes. We can create more products in less time, which allows us to better test and improve our games" and "DVD-EXTRA STUDIO also gives Snap TV the opportunity to create new DVD games with exciting new features that we previously thought were not possible.".

With such a ringing endorsement, it is perhaps no surprise to hear whispers of Disney, Fox and Hasbro filling in the missing names from the trading statement. There is always a risk with such stories, but as major names are signed and titles announced, ZOO's market cap can be expected to grow, potentially to many multiples of its current size.

*I hold shares in Zoo Digital.

Share Price: 11.5 - 12.5p

Stockmarket: AIM

Symbol: ZOO

Mkt Cap: 34 million

Mick Baxter is a private investor, well known for having specialist knowledge in the video games sector. He contributes the occasional tip for UK-Analyst. Mick Baxter is not himself FSA authorised, however this article has been approved for publication by t1ps.com limited.

strong buying going through today

Excellent for that iriedread. You beat me to it.