Gemstar Eyes Big MSO Licenses
By Steve Donohue -- Multichannel News, 11/15/2001 12:19:00 PM
Gemstar-TV Guide International Inc. executives said the company had recently engaged in positive talks with Time Warner Cable and Cablevision Systems Corp. about licensing its interactive program guide.
A deal to license TV Guide Interactive to Time Warner would be a huge coup for Gemstar. The MSO currently has 2.85 million subscribers that use Scientific-Atlanta Inc.'s 'Sara' or Pioneer New Media Technologies Inc.'s 'Passport' IPGs.
Gemstar has patent-infringement suits pending against S-A and Pioneer in a federal court in Atlanta. And a suit Gemstar filed against Pioneer, S-A and EchoStar Communications Corp. at the International Trade Commission is scheduled to go to trial Dec. 3.
Executives at Gemstar have maintained that an IPG-licensing deal the company signed with America Online Inc. in 1999 -- before AOL merged with Time Warner Inc. -- would compel Time Warner to replace its Sara and Passport IPGs with TV Guide Interactive.
Gemstar co-president Peter Boylan said Wednesday during a conference call that he had encouraging talks recently with Time Warner Cable CEO Glen Britt and other MSO executives.
Negotiations have involved modifying Gemstar's license agreement with AOL, and they addressed issues such as including advertising with the IPG, Boylan said.
Boylan also noted that Gemstar held IPG-licensing talks with Cablevision earlier this month during which that MSO's executives 'expressed interest and desire to license our technology.'
Cablevision developed its own simple IPG for its 'iO: Interactive Optimum' digital package that rolled out in late September.
Boylan -- whose company has taken several competitors to court for alleged patent violations -- suggested that Cablevision could face the wrath of Gemstar's legal team if it doesn't come to terms. 'Absent of a license, we will aggressively protect our technology,' he added.
Another source confirmed that Cablevision is talking with Gemstar about licensing TV Guide Interactive, but the company believes its current IPG doesn't violate Gemstar patents. Cablevision officials declined to comment.
Gemstar is also in talks with Cox Communications Inc. about converting all of its subscribers to TV Guide Interactive, Boylan said. About one-half of the MSOs 1.28 million digital subscribers already have Gemstar's IPG, he added.
Boylan also threw some gasoline into the bitter battle the company is waging in its patent suit with EchoStar and its CEO, Charlie Ergen, borrowing a phrase President Bush used recently to attack Afghanistan's Taliban militia.
'You can run, and you can hide, but we are determined to smoke you out wherever you might be,' Boylan said of Ergen.
The Gemstar co-president added that Ergen's recent agreement to acquire DirecTV Inc. could motivate the company to settle 'because he has so much more to lose.'
EchoStar officials couldn't be reached for comment
Gemstar, which reported fourth-quarter earnings Wednesday, said sales in its interactive-platform sector increased 339 percent to $29.2 million compared with the same period last year. Its loss in the sector narrowed to $4.7 million from $12.3 million.
Revenue from its technology and licensing sector jumped 30 percent to $82.1 million.
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