Nobody's posted on here since july....so how about a little good news.
UPDATE - Gemstar cuts key licensing deal with Time Warner
Tuesday October 7, 6:27 pm ET
By Bob Tourtellotte
(Adds byline, updates throughout; changes dateline, previous NEW YORK)
LOS ANGELES, Oct 7 (Reuters) - Gemstar-TV Guide International Inc. (NasdaqNM:GMST - News) on Tuesday said it licensed its program guide, content and technology to No. 2 cable operator Time Warner Cable in a major pact that marks a turning point in its recent history of business and legal troubles.
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Financial details were undisclosed, but Gemstar-TV Guide Chief Executive Officer Jeff Shell told Reuters the Time Warner deal represents a new type of licensing pact. He added it could help the company as it tries to settle contentious legal issues with set-top box maker Scientific-Atlanta Inc (NYSE:SFA - News).
Shell said the deal should impact Gemstar's net profits beginning in the first quarter of 2004, and on a separate matter added the company's revamp of its TV Guide magazine has turned in positive, albeit early, results in newsstand sales.
Gemstar-TV Guide shares jumped nearly 12 percent in early trading on the Nasdaq, but by the end of the day had given back some gains to end 10.2 percent higher, or 49 cents, at $5.30.
"On an operational front, this was a key barrier for us in order to move on," Shell said.
The interactive program guide helps subscribers navigate through the hundreds of digital cable channels and is expected to be one of the main drivers of future revenue for Gemstar.
The pact gives Gemstar-TV Guide licensing deals with the top three U.S. cable TV operators, Comcast Corp. (NasdaqNM:CMCSA - News), Charter Communications Inc. (NasdaqNM:CHTR - News) and now Time Warner Cable, and helps to further validate Gemstar-TV Guide's technology, Shell said.
STEP ONE, TIME WARNER
Under the pact, Gemstar-TV Guide is licensing both the guide and the underlying technology to Time Warner. The deal, unlike previous pacts with other operators, allows Time Warner to tailor the technology to meet its own cable subscribers' needs.
Moreover, because Time Warner buys cable TV set-top boxes from Scientific-Atlanta, Shell said getting a licensing pact with Time Warner was an initial step toward settling patent infringement issues with Scientific-Atlanta.
"There was no way to solve Scientific-Atlanta without solving Time Warner first," Shell said.
Shell was named chief executive in October 2002, replacing Henry Yuen who was ousted after the company lost several patent suits and the government began a probe into its accounting.
Shell is a former executive with Gemstar's biggest shareholder, Rupert Murdoch's (News) News Corp. Ltd. (NYSE:NWS - News; Australia:NCP.AX - News), owner of just over 40 percent of Gemstar-TV Guide's shares.
News Corp. is in the process of acquiring control of satellite TV provider DirecTV, and Shell said he hoped to have a program guide deal with them, too. But he added that the two companies' loose affiliation does not mean they will reach a pact.
Meanwhile, he said newsstand sales of TV Guide were up from last year in the first two issues of the revamped magazine that hit shelves in September. But he cautioned it was too early to draw conclusions from the sales data. |
