Exhibit 10.3

                                ESCROW AGREEMENT

            THIS ESCROW  AGREEMENT (this  "Agreement") is made as of October 20,
2005, by and among ROO Group, Inc., a Delaware corporation (the "Company"),  the
purchasers  signatory hereto (each a "Purchaser" and together the "Purchasers"),
and Kramer Levin  Naftalis & Frankel LLP,  with an address at 1177 Avenue of the
Americas, New York, New York 10036 (the "Escrow Agent").  Capitalized terms used
but not  defined  herein  shall  have the  meanings  set  forth in the  Purchase
Agreement (as defined below).

                              W I T N E S S E T H:

            WHEREAS,  the Purchasers  will be purchasing from the Company shares
(the  "Shares") of the Company's  common stock,  par value $.0001 per share (the
"Common Stock"),  pursuant to a Common Stock Purchase  Agreement dated as of the
date  hereof  by and  among  the  Company  and  the  Purchasers  (the  "Purchase
Agreement");

            WHEREAS,  the Company and the  Purchasers  have  requested  that the
Escrow Agent hold the  subscription  amounts with respect to the purchase of the
Shares in escrow until the Escrow Agent has received,  among other  things,  the
Purchase Price (as defined in the Purchase Agreement); and

            NOW,  THEREFORE,  in  consideration  of  the  covenants  and  mutual
promises contained herein and other good and valuable consideration, the receipt
and legal  sufficiency  of which are hereby  acknowledged  and  intending  to be
legally bound hereby, the parties agree as follows:

                                   ARTICLE 1

                               TERMS OF THE ESCROW

            1.1. The parties  hereby  agree to establish an escrow  account with
the Escrow Agent  whereby the Escrow Agent shall hold the funds for the purchase
of the Shares as contemplated by the Purchase Agreement.

            1.2. Upon the Escrow Agent's  receipt of the aggregate  subscription
amounts into its master  escrow  account,  together  with copies of  counterpart
signature pages of the Transaction Documents from each Purchaser and the Company
and all other  closing  documents  required  under  Article  IV of the  Purchase
Agreement,  it shall advise the Company and the Purchasers,  or their designated
attorney or agent, of the amount of funds it has received into its master escrow
account.

            1.3. Wire transfers to the Escrow Agent shall be made as follows:

                  Bank:         Citibank, N.A.
                                666 Fifth Avenue
                                New York, NY 10103
                  ABA No.:      021000089
                  Account Name: Kramer Levin Naftalis & Frankel LLP IOLA Account
                  Account No.:  37317968
                  Reference:    Roo Group, Inc.


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            1.4.  The  Company  and the  Purchasers,  promptly  following  being
advised by the Escrow Agent that the Escrow Agent has received the  subscription
amounts  for  the  Closing,   copies  of  counterpart  signature  pages  of  the
Transaction  Documents from each Purchaser and the Company and all other closing
documents required under Article IV of the Purchase Agreement,  shall deliver to
the Escrow Agent a Release Notice, in the form attached hereto as Exhibit A (the
"Release Notice").

            1.5. Once the Escrow Agent receives the Release  Notice  executed by
the Company and the Purchasers,  it shall wire the subscription proceeds per the
written  instructions of the Company and the placement  agent, net of $15,000.00
to Kramer Levin  Naftalis & Frankel LLP,  $17,029.48 to Sichenzia  Ross Friedman
Ference LLP and $111,600.00 payable to Burnham Hill Partners, a division of Pali
Capital, Inc., the placement agent for the offering of the Shares, as its fee in
connection with the transaction described herein.

            1.6. Wire transfers to the Company shall be made pursuant to written
instructions from the Company provided to the Escrow Agent.

                                   ARTICLE 2

                                  MISCELLANEOUS

            2.1.  No waiver or any breach of any  covenant or  provision  herein
contained  shall be  deemed a  waiver  of any  preceding  or  succeeding  breach
thereof, or of any other covenant or provision herein contained. No extension of
time for  performance  of any  obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.

            2.2.  All  notices or other  communications  required  or  permitted
hereunder  shall be in writing,  and shall be sent as set forth in the  Purchase
Agreement.

            2.3. This Escrow  Agreement shall be binding upon and shall inure to
the benefit of the permitted  successors  and  permitted  assigns of the parties
hereto.

            2.4. This Escrow  Agreement is the final expression of, and contains
the entire  agreement  between,  the parties with respect to the subject  matter
hereof and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed,  supplemented or terminated, nor may any
obligations  hereunder  be waived,  except by written  instrument  signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.

            2.5. Whenever required by the context of this Escrow Agreement,  the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties,  but rather as if both parties had prepared the same.  Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.


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<PAGE>

            2.6. The parties hereto  expressly agree that this Escrow  Agreement
shall be governed by, interpreted under and construed and enforced in accordance
with the laws of the  State of New York,  without  regard  to  conflicts  of law
principles  that would  result in the  application  of the  substantive  laws of
another jurisdiction.  Any action to enforce, arising out of, or relating in any
way to, any provisions of this Escrow Agreement shall only be brought in a state
or Federal court sitting in New York City, Borough of Manhattan.

            2.7. The Escrow  Agent's duties  hereunder may be altered,  amended,
modified or revoked only by a writing signed by the Company,  each Purchaser and
the Escrow Agent.

            2.8. The Escrow Agent shall be obligated only for the performance of
such  duties  as are  specifically  set forth  herein  and may rely and shall be
protected  in relying or  refraining  from acting on any  instrument  reasonably
believed by the Escrow  Agent to be genuine and to have been signed or presented
by the proper party or parties.  The Escrow Agent shall not be personally liable
for any act the Escrow  Agent may do or omit to do hereunder as the Escrow Agent
while  acting in good faith and in the  absence of gross  negligence,  fraud and
willful misconduct,  and any act done or omitted by the Escrow Agent pursuant to
the advice of the Escrow Agent's  attorneys-at-law  shall be conclusive evidence
of such good  faith,  in the  absence  of gross  negligence,  fraud and  willful
misconduct.

            2.9. The Escrow Agent is hereby  expressly  authorized  to disregard
any and all warnings  given by any of the parties  hereto or by any other person
or corporation,  excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order,  judgment
or decree,  the Escrow Agent shall not be liable to any of the parties hereto or
to any  other  person,  firm or  corporation  by  reason  of such  decree  being
subsequently reversed,  modified,  annulled, set aside, vacated or found to have
been entered without jurisdiction.

            2.10. The Escrow Agent shall not be liable in any respect on account
of the identity,  authorization or rights of the parties executing or delivering
or purporting  to execute or deliver the Purchase  Agreement or any documents or
papers  deposited or called for  thereunder in the absence of gross  negligence,
fraud and willful misconduct.

            2.11.  The  Escrow  Agent  shall be  entitled  to employ  such legal
counsel and other  experts as the Escrow  Agent may deem  necessary  properly to
advise the Escrow Agent in connection with the Escrow Agent's duties  hereunder,
may rely upon the advice of such  counsel,  and may pay such counsel  reasonable
compensation  therefor  which  shall  be paid  by the  Escrow  Agreement  unless
otherwise  provided  for in Section  2.14.  The Escrow  Agent has acted as legal
counsel for the placement agent and the  Purchasers,  and may continue to act as
legal  counsel for the  placement  agent and the  Purchasers  from time to time,
notwithstanding  its duties as the Escrow Agent  hereunder.  The Company and the
Purchasers consent to the Escrow Agent in such capacity as legal counsel for the
Purchasers and the placement agent and waives any claim that such representation
represents a conflict of interest on the part of the Escrow  Agent.  The Company
and the Purchasers  understand that the placement agent and the Escrow Agent are
relying  explicitly  on the  foregoing  provision  in entering  into this Escrow
Agreement.


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<PAGE>

            2.12. The Escrow Agent's  responsibilities as escrow agent hereunder
shall terminate if the Escrow Agent shall resign by giving written notice to the
Company and the Purchasers. In the event of any such resignation, the Purchasers
and the Company  shall  appoint a successor  Escrow  Agent and the Escrow  Agent
shall  deliver  to such  successor  Escrow  Agent  any  escrow  funds  and other
documents held by the Escrow Agent.

            2.13.  If the  Escrow  Agent  reasonably  requires  other or further
instruments in connection  with this Escrow  Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

            2.14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow  funds held by the Escrow  Agent  hereunder,  the Escrow  Agent is
authorized and directed in the Escrow  Agent's sole  discretion (1) to retain in
the Escrow  Agent's  possession  without  liability to anyone all or any part of
said  documents or the escrow funds until such disputes  shall have been settled
either by mutual  written  agreement of the parties  concerned by a final order,
decree  or  judgment  or a court of  competent  jurisdiction  after the time for
appeal has expired and no appeal has been perfected,  but the Escrow Agent shall
be under no duty  whatsoever to institute or defend any such  proceedings or (2)
to deliver the escrow  funds and any other  property and  documents  held by the
Escrow Agent  hereunder to a state or Federal  court  having  competent  subject
matter  jurisdiction and located in the City of New York,  Borough of Manhattan,
in accordance with the applicable procedure therefor.

            2.15. The Company and each Purchaser  agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims,  liabilities,  costs or expenses in
any way  arising  from or relating  to the duties or  performance  of the Escrow
Agent  hereunder  or the  transactions  contemplated  hereby or by the  Purchase
Agreement  other than any such claim,  liability,  cost or expense to the extent
the same shall have been determined by final,  unappealable  judgment of a court
of competent  jurisdiction to have resulted from the gross negligence,  fraud or
willful misconduct of the Escrow Agent.

                            [SIGNATURE PAGE FOLLOWS]


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<PAGE>

                      [SIGNATURE PAGE TO ESCROW AGREEMENT]

            IN WITNESS WHEREOF,  the parties hereto have executed this Agreement
as of this ____ day of October, 2005.

ROO GROUP, INC.:


------------------------------------------
Name: Robin Smyth
Title: Chief Financial Officer

ESCROW AGENT:

Kramer Levin Naftalis & Frankel LLP


By:
   --------------------------------------
   Name:
   Title:

                      [PURCHASERS' SIGNATURE PAGE FOLLOWS]


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<PAGE>

                [PURCHASER'S SIGNATURE PAGE TO ESCROW AGREEMENT]

Name of Investing Entity: __________________________
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________

                           [SIGNATURE PAGES CONTINUE]


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<PAGE>

                                                                    Exhibit A to
                                                                Escrow Agreement

                                 RELEASE NOTICE

            The  UNDERSIGNED,  pursuant  to the  Escrow  Agreement,  dated as of
October  ____,  2005 among the Company,  the  Purchasers  signatory  thereto and
Kramer Levin  Naftalis & Frankel  LLP, as Escrow Agent (the "Escrow  Agreement";
capitalized terms used herein and not defined shall have the meaning ascribed to
such terms in the Escrow Agreement), hereby notify the Escrow Agent that each of
the  conditions  precedent  to the  purchase  and sale of the  Shares  have been
satisfied.   The   Company   hereby   confirms   that  all  of  its   respective
representations  and warranties  contained in the Purchase Agreement remain true
and correct  and  authorize  the release by the Escrow  Agent of the funds to be
released as described in the Escrow Agreement.  This Release Notice shall not be
effective until executed by the Company and the Purchasers.

            This Release Notice may be signed in one or more counterparts,  each
of which shall be deemed an original.

            IN WITNESS WHEREOF,  the undersigned have caused this Release Notice
to be duly executed and delivered as of this ___ day of October, 2005.

ROO GROUP, INC.:


By:
   ----------------------------
   Name:
   Title:

                       [PURCHASERS SIGNATURE PAGES FOLLOW]


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                 [PURCHASER'S SIGNATURE PAGE TO ESCROW RELEASE]

Name of Investing Entity: __________________________
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________


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