Wal-Mart Puerto Rico Signs Contract with PhotoChannel Networks Inc.


PhotoChannel continues to build strong relationship with Wal-Mart

VANCOUVER, BC – February 6, 2005 – PhotoChannel Networks Inc. (TSX-V: PNI and OTCBB: PHCHF) (“PhotoChannel” or the “Company”) the leading innovator of online digital media solutions for retailers and Wal-Mart Puerto Rico ("Wal-Mart") announced today that they have signed a new contract whereby Wal-Mart will utilize the PNI Digital Media Platform for their online photofinishing services. Together with Wal-Mart, PNI will build, host and operate Wal-Mart's online photofinishing services which will launch in the first quarter of 2006.

In a highly competitive industry, PhotoChannel continuously proves to be at the forefront of innovation to deliver the best of breed services to retailers. "We are very excited and happy to be working with PhotoChannel," says Jorge Hernandez, Director, Specialty Division for Wal-Mart, Sam's and Amigo Puerto Rico. "Their products and services have benefited our company and customers in Canada in many ways and we look forward to creating and maintaining a wonderful business relationship with PhotoChannel here in Puerto Rico."

PNI and Wal-Mart will deliver the new service with a focus on printing online photo orders within the customer's local Wal-Mart, Sam's or Amigo store within 1-hour. "Our goal is always to build upon our foundations and our relationships with our clients by continuously creating innovative products and services," says Peter Fitzgerald, Chairman and CEO of PhotoChannel.

This new agreement with Wal-Mart Puerto Rico highlights the bright future for PNI. "Having Wal-Mart choose our service for their Puerto Rican operations is a good endorsement that we are driving benefits to our existing customers," adds Fitzgerald. "The level of commitment we see in the Wal-Mart Puerto Rico team will make this partnership a success. We are very proud to be working with Wal-Mart Puerto Rico."

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. Currently PNI Digital Media generates transactions for retailers and their thousands of locations across North America. For more information please visit http://www.pnidigitalmedia.com.

About Wal-Mart Puerto Rico - Wal-Mart Puerto Rico operates 55 stores, including nine Wal-Mart, four Wal-Mart Supercenter, nine Sam's Club and 32 Supermercados Amigo locations. With more than 14,000 associates, the Company is the largest private employer on the island.

WARNING: PhotoChannel relies upon litigation protection for "forward-looking" statements.

PhotoChannel Networks Inc.
Mr. Kyle Hall
(604) 893-8955 ext. 313
PhotoChannel Networks Inc.

Ms. Niti Maini
(604) 893-8955 ext. 313
nmaini@PhotoChannel.com
PhotoChannel Networks Inc.
Investor Information
(866) 345-0115
http://www.pnidigitalmedia.com

Wal-Mart
Hector Berrios-Figueroa
Media Relations
(787) 347-9166