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Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (2471)	3/22/2000 12:54:00 AM
From: LBstocks	Read Replies (1) \| Respond to of 6516

Digital TV: The Future of E-Commerce By Stephen Caswell E-Commerce Times March 20, 2000 ecommercetimes.com

To: Mike Buckley who wrote (2471)	3/22/2000 11:51:00 AM
From: Eric Jacobson	Read Replies (2) \| Respond to of 6516

If I'm right about all of that, it seems that the importance of VBI stripping is lessened now that there will be a better alternative this year in the form of one-way paging and next year in the form of two-way paging. I think we're just looking at the issue from different time perspectives. I agree with your conclusion that VBI stripping will be less important in the future since one-way and two-way paging may supplant the VBI. However, I view the paging systems as a next generation technology since it is currently not available. In addition, VBI stripping is less important given the TVGIA merger and the fact that many cable companies are marketing IPGs as an essential feature of their digital programming package. In the meantime, there's a whole bunch of TVs in stores with the GuidePlus inside. If consumers buy the TV thinking they will get a program guide as part of the deal, but then can't receive the signal because their cable company is stripping the VBI, then we'll have a bunch of unhappy customers and Gemstar will have egg on its face. To rectify the situation in our favor, and in order to make the existing GuidePlus-enabled TVs without the paging system a viable product, Gemstar will need the FCC to direct the cable companies to stop stripping the VBI. Even if VBI stripping is only done on a small scale, it has the potential to slow the adoption of the technology, at least until the paging systems are on the market. What we need now are GuidePlus-enabled TVs and set-top boxes in people's homes, and anything that slows this adoption process down is bad. If the FCC can't stop the VBI stripping, I suspect Gemstar could be in the position of having to offer customers whose VBI is being stripped a free paging system. In this respect, it's similar to the situation many years ago when Intel released a chip which couldn't process some simple math problems. They had to recall and replace the chips. At the time it significantly affected the share price even if in the long run it was a blip.