September 3, 2008

PhotoChannel Finalizing Terms to Acquire Works Imaging

PhotoChannel Networks Inc. (TSX VENTURE: PN)(OTCBB: PNWIF) ("PhotoChannel" or "PNI") the leading innovator in digital media solutions for retailers today announces it is in the final stages of agreeing terms to acquire WorksMedia Limited, operating as Works Imaging ("Works"). Works, headquartered in the United Kingdom, provides retailers with kiosk and desktop software to create and order photo products such as PhotoBooks, calendars and other photo gift products. The terms of the deal will be announced upon official signing of the agreement which is expected to close in the first quarter of fiscal 2009.

"PhotoChannel has identified desktop photo product creation software as an area of growth for the company and as such has been searching for a product to complete our digital image ordering solution for retailers," says Peter Fitzgerald, Chairman and CEO of PhotoChannel. "We believe the Works software fits very well with our online platform and furthermore the Works team understands what retailers need. Combining our online platform's website front end and backend routing tier capabilities with Works' kiosk and desktop software capabilities makes for an outstanding opportunity to drive more revenue for our retailers and in turn PNI. The Works technology compliments our existing software very well."

"Linking up with PhotoChannel will allow the Works technology to gain much wider worldwide acceptance in very short order," says Harley Ware, Managing Director, Works Imaging. "The PNI platform leads the market and when combined with our desktop and kiosk software footprint will accelerate the market share acquisition of the company and its retail customers. We look forward to closing this transaction shortly."

About PhotoChannel - Founded in 1995, PhotoChannel operates PNI Digital Media to provide services for major retailers, wireless carriers and content providers. The PNI Digital Media Platform connects consumer ordered digital content with retailers that have on-demand manufacturing capabilities for the production of merchandise. PNI Digital Media generates transactions for retailers and their thousands of locations worldwide including Wal-Mart/Sam's Club, Costco, CVS/pharmacy, Kodak and Tesco. For more information please visit

 Contacts: PhotoChannel Networks Inc. Mr. Kyle Hall (604) 893-8955 ext. 313  PhotoChannel Networks Inc. Ms. Niti Maini (604) 893-8955 ext. 313 Email: [email protected]  PhotoChannel Networks Inc. Investor Information 1-800-261-6796 Website:

SOURCE: PhotoChannel Networks Inc.