PhotoChannel Market Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 4, 2008) - PhotoChannel Networks Inc. (TSX VENTURE:PN)(OTCBB:PNWIF) ("PhotoChannel") the leading innovator in Online Digital Media Solutions for retailers advises that recent industry price cuts to 4 x 6 prints being offered to consumers by certain online retailers are expected to have little or no impact on PhotoChannel's business and results of operations.

"We do not anticipate any negative impact by this industry move and could in fact benefit from it," says Robert Chisholm, Chief Financial Officer of PhotoChannel. "Our business model is not dependent upon the consumer's price of a 4 X 6 print. In the past reductions in pricing by our retail channel partners has led to increased print volume and revenue for PhotoChannel."

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.