Advertisement

California

Time Warner and Gemstar Sign Deal

The cable company will use the technology to create interactive programming guides. Gemstar shares rise 10%.

October 08, 2003|From Bloomberg News

Gemstar-TV Guide International Inc., publisher of TV Guide magazine, said AOL Time Warner Inc.'s Time Warner Cable unit would use Gemstar's technology to create interactive programming guides. Gemstar shares rose 10%.

The agreement lets Time Warner Cable use Gemstar's interactive guide or create a custom guide of its own, the companies said. Interactive program guides allow customers to get listings grids on their TV sets that they can page through and then click on using their remote to get to the show they want.

Financial terms weren't disclosed.

Time Warner Cable has 10.9 million customers, making it the second-largest U.S. cable TV provider after Comcast Corp. Gemstar Chief Executive Jeff Shell said in an interview that the company was offering more flexible contract terms than it previously had to win licensing agreements.

The stock "is up on the hopes that all these deals they've signed are going to make money," said Stephen Yacktman, a fund manager at Yacktman Asset Management Co. in Buffalo Grove, Ill.

"It's kind of a wait and see until they give you more information. You have no firm idea of what kind of commitments they've signed."

Yacktman Asset holds about 350,000 Gemstar shares and has recently been selling the stock, he said.

Shares of Los Angeles-based Gemstar rose 49 cents to $5.30 on the Nasdaq Stock Market. The stock has more than doubled over the last year.

Gemstar has added features to its program guide so consumers can use it to control digital video recorders, Shell said.

The company also is offering contract terms that will pay cable companies 50% of the revenue from advertising sold on the guide, he said. Previously, Gemstar paid cable companies only 15% of ad revenue.

Shell replaced Henry Yuen as CEO of Gemstar in November 2002. The company has since licensed its program guide technology to consumer electronics makers including Matsushita Electric Industrial Co. and Sharp Corp. and cable TV provider Mediacom Communications Corp.

Time Warner Cable is working with several companies that provide program guides to get the lowest price for the service, spokesman Keith Cocozza said. The company will be able to combine Gemstar's technology with programming guides from the other companies, including Microsoft Corp. and Scientific-Atlanta Inc., Cocozza said.

Time Warner Cable also uses program guides from Motorola Inc., Pace Micro Technology and Pioneer Corp., Cocozza said.

Advertisement
Los Angeles Times Articles
|
|
|