New York -- As the U.S. pay TV industry has watched
electronic-program-guide companies Gemstar International Group Inc. and United Video
Satellite Group Inc. lock horns in recent weeks, separate talks have taken place with
implications for the overseas EPG business.
Patents for some of the technology that Gemstar uses for
end-user EPG interactivity have not been licensed for overseas markets. And the company
that controls the patents -- New York-based Personalized Media Communications LLC -- is in
discussions with Gemstar and two undisclosed European companies for international rights,
primarily in Europe.
The international negotiations are not on par with
UVSG's offer last month to acquire Gemstar for $2.8 billion. But the UVSG bid did
give an indication of the importance of the international EPG market. Analysts have seen
the offer for Gemstar as a bid for interactive EPG intellectual-property rights. Gemstar
rejected the offer, and UVSG withdrew its bid.
The so-called Harvey patents that PMC is discussing with
Gemstar and the two European companies cover the ability to provide interactive EPGs
through digital set-tops, and they could be awarded on a nonexclusive basis, said Kazie
Metzger, PMC's chairman.
The digital set-top rights could cover multiple
distribution methods, including direct-to-home, cable and terrestrial broadcast, Metzger
They are not part of the patent-infringement suit that
Gemstar filed last week against UVSG's Prevue Networks Inc. unit, PMC said.
Gemstar president and CEO Henry Yuen said Japan and Germany
hold the biggest potential, each representing business worth about one-third of the U.S.
market. The United Kingdom and the Benelux countries could each be worth one-quarter of
the U.S. market, he added.
Thanks to worldwide licensing agreements with
consumer-electronics manufacturers for its EPG and "VCR+" programming system,
Gemstar may have a lead on UVSG in the international EPG business, according to one
However, UVSG's The Prevue Channel is available in 20
or so countries outside of the United States, and its pending acquisition of TV Guide
could provide it with further international growth opportunities, noted Murray Arenson, an
analyst who follows UVSG for Dallas-based Hoak Breedlove Wesneski & Co.
Earlier this summer, Prevue International said it will
bolster its efforts abroad, targeting principally Latin America and Canada -- regions
where it has about 2.9 million subscribers.
Interactive EPG technology would be important to UVSG
internationally because of the global cable, DTH and program-network holdings of its
parents -- Tele-Communications Inc. and News Corp.