GEMSTAR-COMCAST VENTURE TO LAUNCH FIRST EPG PRODUCT
Gemstar-TV Guide and Comcast will launch their first jointly developed electronic program guide (EPG) by late summer, CEO Jeffrey Shell told us after the company’s annual shareholders meeting in N.Y.C. The companies, which formed the Guide Works joint venture earlier this year, are essentially reworking the I- Guide that Gemstar previously had under development, and will introduce it first on Comcast’s cable systems, he said.
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The EPG will be a key ingredient in the Guide Works’ efforts to establish a cable standard for program guides, said Shell, whose company received a $250 million up-front licensing fee from Comcast and will market the jointly developed product to other MSOs. Gemstar has a 49% of Guide Works and has contributed 100 employees, while Comcast holds the remaining 51%, Shell said. Guide Works is continuing a search for a CEO, while Gemstar has established a chief technology officer (CTO) post within the company to oversee R&D, Shell said, though the CTO position also hasn’t been filled. Of Guide Works, Shell said “it’s operating very well and I'm happy with the performance thus far… We're hoping the partnership leads to a standard on the cable platform in N. America and now we're turning to international markets as well.”
Meanwhile, Gemstar’s EPG agreement with Time Warner Cable, will likely result in parts of the guide rather than the whole package going on the MSO’s system, Shell said. The change came as Time Warner brought development of the guide in-house and released specs to its set-top box (STB) suppliers including Motorola, Pioneer and Scientific-Atlanta (S-A), he said. The Time Warner agreement isn’t likely to generate revenue for Gemstar until 2005, he said. A Time Warner spokesman wasn’t immediately available for comment. “Chances of them taking our guide lock, stock and barrel are infinitesimal, but I think the chances of them taking some of our modules are pretty good,” Shell said, citing video-on-demand and PVR applications.
Gemstar also is planning to further expand its TV Guide Channel, which is expected to reach 80 million homes when it launches on EchoStar’s DISH service later this month. Gemstar had originally planned to the launch TV Guide Channel with EchoStar in May (CED April 5 p7), but the work is taking longer than expected, a spokeswoman said. In conjunction with a revamped version of the TV Guide Channel, Gemstar is developing TV Guide Land, an on-demand guide that will provide highlights of TV shows mixed with editorial. TV Guide Land, which will likely be available on Comcast systems as well as DirecTV and EchoStar satellite services, also will allow the viewer to pause, fast forward, rewind and scroll through programming, Shell said.
On the CE side, Gemstar has signed agreements with 19 of the top 20 CE manufacturers license its TV Guide on Screen EPG technology, Shell said. The lone exception has been Hitachi. “It comes down to 2 numbers: How many products include a guide at all, and how fast those products penetrate the market?” Shell said: “We're hoping that North America this Christmas will see an explosion of PVRs.”
At the same time, revenue from Gemstar’s venerable VCR Plus technology, which helped launch the company in the early 1990s, haven’t “declined nearly as much as we anticipated,” Shell said. While shipments of VCR Plus-equipped products have decreased, “we benefited from our [royalty] rates being volume adjusted, so that as shipments come down our rates go up,” he said. Many manufacturers, company officials have said, are combining Gemstar’s EPG with VCR Plus (CED May 11 p3).
Shell also conceded the print TV Guide needs improvement even after introduction of a revamped version last Sept. While subscriptions have remained stable at around 9 million, newsstand sales have slipped 20% in recent quarters. The publication’s editor-in-chief resigned this year and one of the keys to turning it around will be finding a “quick way to get a newsstand product to market that’s more topical,” Shell said.