Delivering the Next Generation of Global Content Services

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Delivering the Next Generation of Global Content Services ZOO Digital Group plc Annual Report and Accounts 2015 Stock Code: ZOO Delivering The Next Generation Of Global Content Services ZOO Digital Group plc Our Business Annual Report and Accounts 2015 Our Performance www.zoodigital.com Our Governance Our Financials Welcome to ZOO Digital Group Contents Operational Highlights ZOO Digital is a provider of cloud-based Our Business • Significantgrowth in localisation • Approved by Apple to deliver motion media production services and software to 03 Highlights with client numbers more than picture and television content directly to global creative organisations, predominantly 04 Group at a Glance doubling in the period. iTunes and appointed as one of four in the entertainment industry. Our full service 06 Our Services global partners to provide localisation proposition includes localisation of audio-visual Our Performance • Workflowmanagement and and digital packaging services. content (embracing subtitling, captioning and 11 Chairman’s Statement centralised subtitling platform dubbing), digital distribution solutions for a 12 Strategic Report adopted by BBC Worldwide. • Newconvertibleloannote secured growing number of Over The Top digital video 17 Corporate Governance Statement raising $1.2m (£0.8m) in new working platforms and creative workflow systems. 18 Directors and Advisers capital support. Our services enable clients to capitalise on new Our Governance routes to market and deliver localised content to their 20 Directors’ Report customers across multiple platforms. 23 Directors’ Remuneration Report Key Financials Our clients enjoy reduced time to market, higher Our Financials quality and lower costs. We do this by delivering 28 Independent Auditor’s Report differentiated production services through the 29 Consolidated Statement of REVENUE EBITDA LOSS OPERATING LOSS application of our innovative cloud software. In this Comprehensive Income way we provide flexible solutions that combine 30 Consolidated Statement of $11.5m $0.7m $2.1m services with software licensing to meet the diverse Financial Position (2014: $9.6m) (2014: $0.4m) (2014 : $2.1m) needs of clients of all sizes across the creative media 31 Company Statement of Financial industries. Our software is used to create localised Position entertainment products, packaging and marketing 32 Consolidated Statement of campaigns for some of the best known brands in Changes in Equity the world. 33 Company Statement of Changes in Equity 34 Consolidated Statement of Cash Flows 35 Company Statement of Cash Flows 36 Notes to the Financial Statements 68 Group Directory 2 3 ZOO Digital Group plc Our Business Annual Report and Accounts 2015 Our Performance www.zoodigital.com Our Governance Our Financials Group at a Glance ZOO Digital Group plc (“ZOO”) provides a range of software enabled services that support the workflows associated with design, development and distribution of creative media, particularly video content. These include localisation Smarter Workflows and access services for audio-visual materials, involving subtitling, captioning for Creative Media and dubbing. By centralising asset storage, order The group’s largest customers include placement, review and approval processes major Hollywood studios, for which the via secure cloud-based platforms, ZOO’s production, marketing and distribution of proprietary software helps clients to increase film and TV properties in numerous formats their speed of production, reduce costs and across many geographies and languages has protect brand integrity. Our services enable previously been a lengthy, costly and largely Workflow Solutions clients to capitalise on new routes to market manual process. Our services empower our and deliver localised content efficiently to clients to operate with greater control, to a for the Creative Media Industries their customers across multiple platforms. higher quality and at a lower cost. Increasingly the group’s propositions are Our Services benefiting a variety of companies across ZOO provides production services delivered through At ZOO we help our clients to manage sectors where the development of media cloud-based software to support creative media their businesses better by delivering fully products, localisation, printing, packaging preparation and publication, enabling diverse groups managed services and by licensing and and marketing involves complex processes in of individuals to collaborate efficiently via the internet. tailoring a range of software-enabled multiple countries and languages, and efficient While we may think of creative media in the form services that increase productivity, reduce collaboration becomes a significant challenge. of consumer products and content, such as film and waste and improve management information. video, videogames, music and books, it now plays Our cloud-based platforms provide the an ever increasing role in the operations of most B2B capabilities of workflow management and and B2C organisations. The preparation of product process automation. The production services packaging and marketing materials involves the we offer are built upon these systems, most design, production, review, approval and localisation significantly for localisation of and access to of creative media and is undertaken by commercial audio-visual materials including subtitling, organisations across all sectors, both large and small. captioning and dubbing. Subtitles are As businesses strive to reach global audiences, usually textual translations of dialogue into creative media must be produced in the local other languages while captions are native languages of customers all around the world, often language text designed primarily to provide as part of simultaneous product releases across access for the deaf and hard of hearing. many territories. In many industries there is a drive to create more products, faster, in a greater number of languages and at lower cost. This often requires a huge effort by many collaborating groups – suppliers, distributors, licensees, territory offices, legal departments, translators – involving complex workflows with plenty of opportunity for human error. 4 5 ZOO Digital Group plc Our Business Annual Report and Accounts 2015 Our Performance www.zoodigital.com Our Governance Our Financials The introduction of DVD technology in 1996 led to an explosion in demand for localised programming all over the world. Subsequently, the now widespread distribution of film and episodic TV content via broadcast, cable and satellite, and more recently via a plethora of ‘Over The Top’ (OTT) online platforms, has resulted in a dramatic growth in localisation services for entertainment content and other video programming. According to the European Commission, the size The proliferation of delivery channels for film and of the language industry in the EU for subtitling and TV programming, including theatrical releases (in dubbing was €0.5B annually in 2009. Costing around cinemas), broadcast, cable, satellite, DVD, Blu-ray one tenth of the price of the equivalent dubbed Disc, internet streaming, iTunes, Vudu, CinemaNow, soundtracks, subtitles have become a popular choice Amazon and many others, brings its own particular for content owners and broadcasters to deliver technical challenges. This results in the need to localised programming quickly and cost-effectively. prepare subtitles in many different technical formats Aggressive programming schedules have made and specifications. So across several languages it a challenge to produce high quality entertainment and platform types, one episode of a TV series may subtitles cost-effectively. The completion of new require the preparation of literally hundreds of digital episodes of popular TV series requires a fast turn- files, each of which must be created, quality assured, around of subtitles to meet broadcasters’ air dates; managed and delivered on time. Our Services a drive for so-called “day and date release” of feature Our ZOOsubs proposition provides a combination films (simultaneous launch of movies in multiple of workflow management, automation and translation Our services are delivered through the use of a countries on the same day) requires finely managed services to support the localisation of audio-visual number of cloud-based software platforms: logistics to produce localised materials ready to materials. Through this cloud-accessible service our launch on time in each country. clients and their partners are able to submit native ZOOsubs language reference materials, order translations, enabling highly efficient subtitling and Our revenues are derived mainly from quality assure, convert, repurpose, store, manage and captioning services; provision of media production services to our deliver localised media. For most of our ZOOsubs clients particularly in the areas of subtitling, clients we provide a highly efficient complete service ZOOcore captioning and dubbing. In addition, we empowered by ZOOsubs and ZOOcore, delivering powering creative media collaborative generate recurring income from our software subtitles and captions in over 50 languages, optimised production processes; solutions in the form of Software as a Service for all popular delivery formats. licensing fees. In some cases these are ZOOsubs software and service is being used by large ZOOstudio charged on a per-user per-month basis, and film studios, content distribution platform operators, delivering digital video distribution in other cases they are charged based on the universities and global
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