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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (3988)	7/18/1999 5:06:00 PM
From: Jill	Respond to of 54805

I love it. Nights it is. Unc Frank, whatcha think? Jill (eom)

To: Mike Buckley who wrote (3988)	7/18/1999 5:19:00 PM
From: NY Stew	Read Replies (5) \| Respond to of 54805

Periscopes up on Gemstar, It is my hope that you (consensus) will revisit Gemstar again as, if, the last remaining platform barrier for its technologies may be coming to closure, that being US cable. Although US cable is only 10% of the global market the perceived significance has cast doubt of a greater proportion. To date Gemstar has a rather decent list of licensees in Microsoft, AOL, Hughes, Thomson, Sony, Deutsche Telekom, Philips, Matsushita, Hitachi, Mitsubishi, Zenith, JVC, US West, Americast ( Ameritech, Bellsouth, SNET, GTE and Disney) and others. It has a joint venture in Japan with Dentsu (worlds largest advertising and PR firm) and Tokyo News. A JV with MSNBC in NewsGuide and one with NBC and Thomson in TDN. Miscrosoft is buying into various domestic and foreign cable firms to push its agenda, Microsoft TV, that includes the Gemstar enabled TVPAK (WebTV in WinCE). AOL has partnered with BellAtlantic, SBC, DirecTV and others. MS and AOL will become great distribution vehicles for Gemstar. The market is 600 million households worldwide and growing as third world nations develop. The agreements reached call for an upfront fee, a per unit royalty fee, subscription fees, sharing of advertising and e commerce transaction revenues. No two agreements that I know of are the same. Americast, for example, gives Gemstar 80-90% of the ad revs but no per unit royalty fees. AOL retains about 75% of the ad rev but pays GMST a monthly subscription/royalty fee and an (undisclosed amount) upfront fee. Most agreements as with AOL, Microsoft, Sony, Thomson and Americast are exclusive and long term. The MS agreement has 17 years remaining. I am certain that Mike thought I should be locked up in the nearest appropriate ward for suggesting two years ago that Gemstar could generate $40/annum from each guide. It is a lowball figure now compared to what the pros are saying but I feel safe saying that the average guide (in regards to the various platforms and agreements) will generate $5/month. When I stated a few months ago that 'new books are being written as we speak' I may have said it better if I said that perhaps another chapter is being written in regards to business models. It would be like QualComm negotiating terms with its licensees to get a fee each and every time its technology is used, a toll booth on each and every phone call. To make it up Mike I am sending you Calvin Pickering, a 22 year old franchise (IMO) player. As you know I have seen Don Baylor, Bobby Grich, Cal Ripken Jr and others at this early stage. This kid is literally hitting the cover off the ball with 8 hrs in his last 9 games. If Baines is traded you will see him shortly and I will not. We'll call it even. Message 10555218 Regards Stew