Gemstar-TV Guide Exploring "Strategic Alternatives," Including Sale

--Launches New Broadband Video Awards
--Licenses Patents to Sky Italia, MeeVee
--Licenses Video Search Technology from CastTV

Interactive TV technology and entertainment company, Gemstar-TV Guide (note: the company, which is 42% owned by News Corp., and which is best known for its widely deployed EPG products, also operates two interactive TV channels, TV Guide Network and TVG; it has a market cap of over $2 billion), said Monday that its board of directors has authorized it to "explore strategic alternatives intended to maximize shareholder value." Those strategic alternatives might include selling the company, Gemstar said. "The company has made significant improvements throughout its businesses and the board is very pleased with the growth and strategic direction under CEO Richard Battista," Gemstar-TV Guide chairperson, Anthea Disney, said in a prepared statement. "We are now poised to investigate the range of available strategic alternatives for continuing to build shareholder value." Gemstar says its board will now work with its management team and its legal and financial advisors to evaluate the alternatives available to it, and to identify the course of action that will be in the best interests of its shareholders. It has contracted UBS Investment Bank as its financial advisor for the process and the law firm of Wachtell, Lipton, Rosen & Katz as its legal advisor. The company cautions that "there can be no assurance that the exploration of strategic alternatives will result in any transaction," and says that it does not consider itself obliged to make any further public statements on the issue "unless and until a final decision is made."

According to a spokesperson for Gemstar's controlling shareholder, News Corp., the latter supports Gemstar's move to put itself up for sale, as the cross-platform programming guidance in which Gemstar specializes is not an area of primary interest to News Corp.: "As a long- time, significant shareholder of Gemstar-TV Guide, News Corporation continues to be very pleased with the progress that management has made in recent years and the strategic direction of the company," the spokesperson told the Hollywood Reporter. "However, Gemstar's core competencies are in cross-platform video guidance, which is not an area in which News Corporation is seeking to increase its presence. News Corporation fully supports the Gemstar-TV Guide's board of directors' decision to explore strategic alternatives at this time in order to maximize value for all shareholders."

In other Gemstar-TV Guide News:

• The company has announced plans to launch the TV Guide Online Video Awards, an annual awards franchise that it says will recognize "the best and most innovative professional video programming, created specifically for the Web." The company says that it will use its various cross-platform resources (which include EPG's, TV Guide Magazine, and interactive TV channels, and which it claims reach 73 million unique consumers each week), in order to promote the new awards franchise. "Some of the industry's most creative writers and producers are now engaged in producing entertainment programming that is available exclusively on the Web," Gemstar-TV Guide CEO, Rich Battista, said in a prepared statement. "Over the past year, both the quality and the quantity of this Web-only programming have increased exponentially. During this same period, TV Guide has significantly increased our coverage and use of digital media to connect with consumers to further strengthen and extend our brand. This is the perfect time for us to step in and use our significant editorial credibility, cross-platform reach, and consumer fan base to recognize the best new programming that the Web has to offer." According to Gemstar-TV Guide, the Online Video Awards will honor "the best professionally produced programming and other entertainment content that aired online, or in other digital media, between January and October, 2007." Consumers will be able to vote in some categories (via TVGuide.com and TV Guide Mobile), while the winners of other categories will be selected by the editors of TV Guide magazine. Award categories will include comedy, drama and animation, as well as "unique categories that will recognize the Web's most provocative and unexpected video content," Gemstar says. Starting in October, consumers will be able to view the nominated clips in all categories on TVGuide.com. The awards will be promoted through TVGuide.com, TV Guide magazine, TV Guide Network and TV Guide Mobile. They will be presented at a ceremony in Los Angeles in early December that will be covered by TV Guide Network a few days later in an exclusive two-hour program that will also feature red-carpet interviews. 
• The company has convinced online TV guidance company, MeeVee, to sign a multi-year patent license agreement. According to the company, the agreement provides a patent license to MeeVee for EPG's that the latter offers on its Web site, and for private-label EPG's that it provides on a syndicated basis to various p*artners for their Web sites. "We are pleased to have this patent license agreement in place with MeeVee, as it represents another example of the marketplace recognizing the value of our intellectual property in the online space," Mike McKee, president of interactive program guides and COO of Gemstar-TV Guide, said in a prepared statement.
• The company has also signed a multi-year patent license agreement with Sky Italia, an Italian DTV service that claims over 4 million subscribers. While specific terms of the agreement have not been disclosed, the companies say that it will allow Sky Italia to use Gemstar's intellectual property in EPG's on its various platforms. "As Gemstar-TV Guide continues to grow the value of its intellectual property portfolio, we will continue to work to extend our patent licensing program internationally," Gemstar's Battista said in a prepared statement.
• The company says that it has licensed video search technology from CastTV. The technology is powering the search index of Gemstar-TV Guide's Online Video Guide (video.tvguide.com), which was beta- launched in April and which focuses primarily on professional-quality broadband video. Under the terms of its two-year agreement with TV Guide, CastTV--which plans to launch its own consumer site this summer (casttv.com)--is providing the company with a video crawler that automatically indexes content from prominent online entertainment sites, including those of major broadcast and cable networks, movie download sites, sports sites and aggregators of professionally produced content.

Originally Published: July 13, 2007 in [itvt] Issue 7.36 Part 1

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