KIT digital Builds Interactive Web Assets for Seth MacFarlane’s Cavalcade of Cartoon Comedy Web Shorts

NEW YORK AND DUBAI – September 12, 2008 KIT digital, Inc. (OTCBB: KITD), a leading global provider of IPTV enablement technology and video-centric interactive marketing solutions, revealed this week its latest work – a custom-built Web environment created for TV innovator Seth MacFarlane and his new collection of web shorts titled Seth MacFarlane’s Cavalcade of Cartoon Comedy (www.sethcomedy.com).  KIT digital was called upon by Media Rights Capital (MRC), an independent film, television and digital studio.

Nearly 75% of all Internet users now watch video online, a 300% increase in just two years, and KIT digital is at the forefront of this booming trend.  KIT digital brought a track record in interactive marketing innovation to this new project, having recently built a number of ground-breaking digital Web environments for other high-profile entertainment clients, including Big Brother, Raven-Symoné and Wallace & Gromit.  KIT digital helps its clients deliver and monetize rich media content in new and engaging ways to audiences over web browsers, mobile phones and IPTV set-top-boxes.

“Our goal in working with KIT digital was to provide Seth a platform that would support his unique brand of comedy,” said Dan Goodman, president of digital media, Media Rights Capital.  “They were the ideal architect of our ‘home base’ for this new concept as they were able to deliver a total solution from compelling creative to a turnkey back-end solution.  We are thrilled with the dynamic environment they have developed for the content.”

The online experience KIT digital created for Seth MacFarlane’s Cavalcade of Cartoon Comedy incorporates flash development elements built upon KIT digital’s proprietary API-based video player.  The company merged detailed flash animations with the API player to synthesize the show and interactive components.  Highlights of the interface include:

• Two different channels: Video channel containing a playlist of all animated content for the site and the Blog channel containing a playlist of complementary blog content from Seth MacFarlane
• Integrated advertising features directly into the player, allowing a seamless brand experience
• Best-of-breed reporting, tracking and trend analysis
• Integrated non-video content (cast profiles, ticker ,etc.) and a custom content management systems (CMS)  to manage all non-video content
• Customized YouTube channel consistent with the creative elements of the website
• Edge-cache technology that allows scalability and high performance over a global footprint, ensuring that the player loads quickly and viewing experience is maximally enhanced.

“Once again, Seth MacFarlane is breaking new ground in entertainment, this time in how it is delivered to the consumer through the Internet,” stated Kaleil Isaza Tuzman, chairman and chief executive officer, KIT digital.  “We are thrilled to have been given the opportunity to work on this initiative with Media Rights Capital, an important client of the firm. KIT digital is proving yet again to be at the forefront of the fusion of traditional and new media.”

KIT digital has previously been called upon by industry heavyweights to bolster online presence, increase audience reach and market share, and create cutting-edge, dynamic interactive environments for consumers.  Such clients include: News Corporation (including properties NY Post, The Sun, The Times), ESPNstar, Citadel Radio Network, Verizon, RCS, IMG and ABC Disney.  For more information on KIT digital, please visit www.kit-digital.com.  To request an interview, or to learn more about how the company is helping to transform online interactive development, please call the below media contact. 

About KIT digital

KIT digital, Inc. (OTCBB: KITD) is a leading, global provider of proprietary IP-based video distribution technologies and video-centric interactive marketing solutions. Through its end-to-end platform, KIT digital works closely with consumer brands, content providers and telcos to maximize the value of video content via the Internet and mobile networks. The KIT VX platform allows clients to publish, manage and distribute digital video content, build online/mobile communities and integrate advertising. The Company offers businesses a full range of interactive marketing solutions and KIT clients can access approximately 100 KIT-syndicated channels and 40,000 KIT-syndicated videos. KIT digital clients include News Corp., Verizon, IMG, China Mobile, Telefonica, Vodafone, K-Mart, Coles, NASDAQ, Hummer and RCS. KIT digital has principal offices in Dubai, Melbourne (Australia), Stockholm, New York and London. For additional information, please visit www.kit-digital.com.

Media Contact:
Jonathan Cutler
Verse Communications
818.981.3023
jonathan@verseinc.com

Accretive acquisition to bolster product offering and realize immediate revenue  and cost synergies

Morpheum CEO to join KIT digital in Dubai in senior management role

DUBAI AND MELBOURNE – September 2, 2008 - KIT digital, Inc. (OTCBB: KITD), a global provider of IPTV enablement technology and video-centric interactive marketing solutions, announced today that it has completed a stock purchase agreement to acquire Melbourne, Australia-based Morpheum, one of Asia’s leading providers of web-based content management systems (“CMS”).  Morpheum’s award-winning software, LanternCMS, will become a key part of KIT digital’s device-agnostic IPTV platform.

Morpheum generated approximately US$2.4 million in revenues and approximately US$100,000 in EBITDA in the trailing 12 months through June 30, 2008. Management estimates that, after the immediate realization of synergies, the acquisition will contribute in excess of US$1.0 million in revenues and US$300,000 in EBITDA to the Company’s overall results in the last 4 months of 2008.

Under the terms of the acquisition, KIT digital purchased 100% of Morpheum’s shares at a total price of AU$950,000 (approximately US$836,000), with 7.5% of the consideration held in escrow for 6 months to cover unforeseen contingencies. The acquisition has been approved by KIT digital’s board of directors, and due diligence has been completed. Closing is effective immediately.

Morpheum generates its revenue in the Australasia and Asia-Pacific regions, with particular strength in national, state and local government verticals.  KIT digital has been focused on expanding its IPTV business with government clients globally, a development which should be accelerated by the Morpheum acquisition. Morpheum’s public and private sector client roster includes Australia’s Department of Veteran Affairs and National Water Commission, Vodafone, OXFAM, VicSuper, McKesson Asia-Pacific, NSW Health, Film Victoria and the City of Sydney (Australia). Morpheum’s business model is focused on recurring revenues from software licenses and ongoing maintenance and support fees.

KIT digital will fully integrate LanternCMS into its video asset management solution, KIT VX, augmenting the Company’s technology product offering to allow for broader web-based content management. The integration of LanternCMS into the KIT VX platform will also immediately reduce the Company’s operating costs by cutting out certain third-party software suppliers, and allowing the Company to deliver a complete, end-to-end digital media asset management solution to its clients.

Kaleil Isaza Tuzman, chairman and chief executive officer of KIT digital, said, “The acquisition and integration of Morpheum materially expands our client delivery capabilities while delivering an immediate cash flow contribution. As such, we remain on track for our stated corporate goal of breaking through to operating cash-flow positivity in Q4. Through revenue and cost synergies, we anticipate in the vicinity of US$0.8 million in additional EBITDA contribution from this acquisition over the next 12 months.”

Joining KIT digital in a senior management role in Dubai will be Matt Harris, founder and CEO of Morpheum.  As head of content management solutions, Mr. Harris will oversee integration of the LanternCMS capability into the KIT VX platform and manage the roll-out of KIT digital’s new video-centric CMS vertical.

“Our view is that KIT digital is quickly becoming the consolidating actor that is needed in the international IPTV platform space,” commented Mr. Harris.  “By merging with KIT, we expect to increase the types of products and services we deliver to our current client base and in turn provide new capabilities to KIT’s global roster of clients.  Morpheum has had previous success in delivering strategic web solutions in the Asia-Pacific region, and we anticipate global reach for these solutions within the framework of KIT digital.”

“KIT digital is committed to providing end-to-end digital media enablement and marketing solutions utilizing IPTV technology,” explained Gavin Campion, president of KIT digital. “The integration of Morpheum’s Lantern CMS into the KIT VX Enterprise product suite should be quick and seamless, since KIT has previously utilized the LanternCMS solution in client deployments. We are thrilled that Matt, a veteran of the digital asset management space, will be joining us in Dubai to direct our go-to-market strategy with CMS resellers globally.”

Acquisition Benefits

• Key strengths expected from the combination include:
• Creation of KIT VX as a complete CMS solution;
• Strengthened presence in Asia-Pacific region;
• Strengthened presence in government vertical;
• Immediate increase in revenue, profitability and cash flow;
• Cost savings in KIT VX deployments through elimination of current outsourcing to CMS vendors;
• Veteran leadership addition to KIT digital management team.

About Morpheum

Morpheum’s LanternCMS is recognized as one of the innovators in the content management market. With its intelligent modular design, LanternCMS is a standards-driven web-authoring tool combining ease-of-use with powerful functionality for administrators.  LanternCMS is the CMS of choice for such Australian government clients as the Department of Communications, Information Technology and the Arts, the Department of Veterans Affairs, the National Water Commission, the Ombudsman Victoria, Film Victoria, the City of Sydney, and the City of Melbourne.  Its private sector and non-profit clients include Vodafone, OXFAM, VicSuper, McKesson Asia-Pacific, NSW Health, Melbourne Food and Wine and the Victorian Opera. Morpheum is headquartered in Melbourne, Australia. For additional information, please visit www.morpheum.com.au or www.lanterncms.com.

About KIT digital

KIT digital, Inc. (OTCBB: KITD) is a leading, global provider of proprietary IP-based video distribution technologies and video-centric interactive marketing solutions. Through its end-to-end platform, KIT digital works closely with consumer brands, content providers and telcos to maximize the value of video content via the Internet and mobile networks. The KIT platform allows clients to publish, manage and distribute digital video content, build online/mobile communities and integrate advertising. The Company offers businesses a full range of interactive marketing solutions and KITclients can access approximately 100 KIT-syndicated channels and 40,000 KIT-syndicated videos. KIT digital clients include News Corp., Verizon, IMG, China Mobile, Telefonica, Vodafone, K-Mart, Coles, NASDAQ, Hummer and RCS. KIT digital has principal offices in Dubai, Melbourne (Australia), Stockholm, New York and London. For additional information, please visit www.kit-digital.com.

Forward-Looking Statements

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 — With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of KIT digital, Inc. could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company’s operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rates and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors see the risk factors associated with our Company, review our SEC filings.

Media Contact:
Jonathan Cutler
Verse Communications
818.981.3023
jonathan@verseinc.com