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Technology Stocks : Gemstar Intl (GMST)

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To: FLSTF97 who wrote (380)	9/27/1999 8:00:00 PM
From: NY Stew	Read Replies (1) of 6516

FLSTF97, First they make a per unit fee for set top boxes $5-15 ea. Thats sounds like a fair approximation in general. The AOL TV agreement has a different model in that Gemstar will receive a subscription fee of $5-$10/unit/annum in addition to sharing the recurring revenues. They make a per unit fee for TV's adapted for the guide technologies is this also at roughly $10 per unit? Again, that seems to be fair. Last summer Henry stated that the fees "were approaching" $10/unit. They make(expect to make) revenues of $0.01 per impression I think I read somewhere. How is that defined? The .01/impression is based upon a $10 CPM. They split revenues on any adds (maybe 20-30% based I what I seem to remember about the MSFT deal.) Gemstar has never disclosed the percentage but I have heard that it is between 25%-33%. The cross-licensing agreement is worldwide and long-term with 17 years remaining. This 1/4 to 1/3 take is net for Gemstar if you consider that they do not pay for any of the MS technology that they may use sometime in the future. I conclude this, correctly or incorrectly, from the SEC filing dated 1/12/98. You would need to scroll down 30 or so pages because it was filed with the Thomson JV. i>They have upfront licensing fees (which seem to be a trade off on the per unit fees). Yes. The amounts are confidential but a $45 million upfront fee from Microsoft has been reported by several analysts. Do cable providers also have to pay to pump the data down the line or is their payment limited to the boxes? Gemstar's signals are carried by ABC, CBS, NBC, FOX, PBS, UPN and several hundred local broadcast and cable affiliates. The signal is economically transmitted via the VBI. This process will be enhanced with one-way wireless in 2000 and two-way in 2001. How much do they make per VCR? $2-3/unit. Regards Stew

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