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PhotoChannel Networks Inc. Signs Agreement with Kmart for Online Photo Service

Kmart deploys PhotoChannel’s PNI Digital Media Platform integrated with Kodak’s Qualex production facilities.

Vancouver, BC-March 5, 2007- PhotoChannel Networks Inc. (TSX-V: PN and OTCBB: PNWIF) (“PhotoChannel” or “Company”) the leading innovator in online digital media solutions for retailers announces it has signed an agreement with Sears Holdings Corporations’ Kmart division and has launched Kmart’s online photo service, located at www.kmart.com. Using the PNI Digital Media Platform, the service enables Kmart customers to place photo orders online and pick them up in Kmart locations across the United States.

“We are very excited to have Kmart as a partner,” says Peter Fitzgerald, Chairman and CEO of PhotoChannel. “Our alliance with Kodak’s Qualex subsidiary has allowed us to deploy the system and seamlessly integrate online photo ordering into Kmart’s photo business with no service disruptions.”
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, including Wal-Mart Canada, CVS/pharmacy, Eckerd Drugs and Costco Canada. For more information please visit www.pnidigitalmedia.com
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For more Information, Contact:
Ms. Niti Maini
PhotoChannel Networks Inc.
604-893-8955 ext. 313
nmaini@PhotoChannel.com
Investor Information: (800) 261-6796