Concurrent Computer (CCUR) Message Board

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Technology Stocks : Concurrent Computer (CCUR)

CCUR 1,940

-22.4%

Jul 30 2:38 PM EST

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To: Don Hand who wrote (13688)	5/12/2000 4:07:00 PM
From: Granby	Read Replies (2) of 21142

DIVA has used their funds to develop an end to end video service which includes hierarchical data base management, video server hardware and software, billing and interactive program guide ("IPG" not "EPG") pieces. The latter is a new part of their pitch although their video server model has always featured served "MPEG streamed Menu's" instead of settop based graphics menu's. In the DIVA system when you navigate the selection menu you are interacting with the server not a downloaded program guide in the settop. DIVA's "IPG" - more by luck then by design - operates completely differently then the current "EPG's" which are covered under the gem patents. It seems that in a digital headend with, at minimum, a DIVA IPG server a cableco can use DIVA's IPG approach as an alternative to the gem based EPG - for which cablecos must pay royalties. In other words, a cableco could select DIVA strictly for its IPG services and not VOD. More then likely, however, a cableco would broker a deal such that DIVA provides both their IPG to all digital subs and their optional VOD service. One other note on the IPG vs EPG - the statement in the S1 warns against possible litigation by the EPG rights holders. In my opinion DIVA's IPG is a clean "workaround" the EPG patents. Time will tell. On the revenue issue - No VOD early developer - CCUR or Diva could have generated much in the way of revenues. Even sites that are past trial status have not had sufficient time to expand the number of served settop boxes. DIVA is currently serving more then 10,000 subscribers and may be closer to 20K. It is interesting to note that ATHM was at the 20K subscriber point when they did their IPO. I have never understood why people on this forum are so negative about DIVA or its funding approach. DIVA was largely able to avoid VC money (a good thing?) and still retains a hugh percentage of ownership in its founders. It has around $100 million in cash, numerous investing strategic partners and 3+ years of field trials in several types of headends. Going forward it has numerous financing options available to it, including cable industry style, "leveraged financing". DIVA's original financer was Toronto Dominion - which is a bigtime financier of the cable industry. DIVA's early business plan was to leverage their growing revenue stream at x6 cashflow to continue to finance a broad rollout of their service. I don't know if that is still how they plan to finance the ramp up in servers but I havn't seen anything that would prevent them from doing so. It seems to me that CCUR fans should hope that DIVA succeeds because it means that a bigtime ramp up will occur and there will be opportunities for every player. For what its worth DIVA views its own internal server development as a "vendor" - which must prove its cost/efficiency at each stage in company development. If Brand X server vendor came in the door with better numbers DIVA would jump ship in a nanosecond. That is not likely to happen with current server volumes because the margins are so high in the industry it is unlikely anyone could out cost perform their internal development - however - a major server player with an aggressive margin might successfully partner with DIVA. I could see this particularly in the small market cable arena where the cost performance of their system many be less - although they have reduced their server footprint significantly. Anyway - just to divulge my many biases - I am a very happy former DIVA "affiliate" eligble for rule 144 (K) lockup exception who looks forward greatly to the events of the coming months.

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