Rovi Hits Patent Roadblocks VENDOR SAYS DEAL DELAYS ARE CRAMPING SALES By Todd Spangler Multichannel News
8/13/2012 12:01:00 AM http://www.multichannel.com/article/488413-Rovi_Hits_Patent_Roadblocks.php Rovi has kept up an aggressive litigate-and-license strategy for its interactive program guide patent holdings, an approach that dates back to predecessor company Gemstar-TV Guide International. But now it’s getting push-back from companies that don’t want to pay the rates Rovi is demanding. Rovi has been unable to reach patent-licensing deals with Internet video distributors including Netflix, Hulu and Amazon.com — each of which Rovi is suing for infringement — and, overall, the company expects 2012 licensing revenue will be approximately $50 million lower than its previous estimates. On the consumer-electronics front, Rovi is trying to negotiate new IPG patent deals with LG Electronics and Vizio, which are out of license. And, according to Rovi, growth in revenue from cable operators did not meet expectations for the second quarter because of delays in completing IPG patent licenses with European MSOs. “By and large, we’ve done a good job of getting traditional license deals done” in the CE and service-provider segments, Rovi CEO Tom Carson said in an interview. “We’re now looking to the TV Everywhere space, and we have a number of deals we’re trying to get done.” Rovi cut its 2o12 revenue expectations by $105 million, 13% to 14% lower than its previous guidance. Other factors for the weakened forecast: The Rovi Entertainment Store online movie-streaming service — which it operates on behalf of partners including Best Buy — and the company’s advertising business are both ramping up more slowly than expected, Carson said. Analysts weren’t worried about the patent-licensing revenue shortfall, noting that Rovi expects its eventual deals will include catch-up payments. What’s more troubling is that investors are “uncertain about the potential for any significant revenue contribution from the company’s growth initiatives outside of core IPG patent licensing,” Avondale Partners analyst John Bright wrote in a research note last week. Rovi expects to conduct layoffs as it aims to cut $20 million in costs before the end of 2013, Carson said. “We are basically looking at all areas of the business [for layoffs] but particularly areas that are light” in terms of revenue contribution and growth, he said. Rovi currently has 1,800 employees worldwide. The company is not disclosing how many jobs it expects to cut. In the second quarter, Rovi entered into new license agreements covering the television and TV Everywhere field of use with Cogeco Cable and Google, which is gearing up to launch fiber-based Internet and TV service in the Kansas City market. It also cut deals with CE manufacturers Funai and JVC. The company noted it has struck prior patent-licensing deals for TV Everywhere with Comcast, NDS (now owned by Cisco Systems), Apple and Sony. Meanwhile, Rovi is seeing a longerthan- expected deployment cycle for its next-generation TotalGuide solution for service providers, Carson said. The company now expects deployments in the first half of 2013 at Mediacom Communications, Cogeco, BendBroadband, Buckeye Cablesystem, Armstrong and Blue Ridge Communications. TAKEAWAY Rovi has failed to sign patentlicensing deals with Netflix, Hulu, Amazon.com, European cable operators and others, hurting its financial results. _______________________________________________ Please be sure to include a URL to the article. Reply to the sender with a "Thank you" if you like this post. _______________________________________________ Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
