Thomson-Gemstar align anew

By Duffy Hayes
from CED Broadband Direct, May 17, 2002

The strategic relationship between interactive services provider Gemstar-TV Guide and Thomson Multimedia began way back in 1996, but their partnership is getting a facelift, so to speak. The two companies today reiterated a common strategy to deploy Gemstar's Interactive Program Guide (IPG) in Thomson television and access devices, and mapped out a future timeline to broaden other areas of the relationship.

Specifically, the two announced the signing of a binding Letter of Intent, and that they anticipate putting together a definitive Strategic Partnership Agreement to be presented to each company's board of directors in June. It should also be noted that Thomson holds a 6.4 percent stake in Gemstar-TV Guide.

The two also agreed to dismiss pending arbitration between them, in lieu of completion of the new Strategic Partnership Agreement. Back in November of 2001, Thomson filed an arbitration claim alleging a breach of a revenue-sharing ad agreement between the two. Gemstar retaliated by denying the allegations, and separately charged Thomson with not fulfilling an agreement to introduce Gemstar EPGs in Europe.

The announced Letter of Intent details a broadening of the companies' relationship with regard to the Gemstar IPG and other interactive services. The letter first renews commercial synergy for the Gemstar GUIDE Plus+ IPG, which Thomson will incorporate in TVs and other access devices. Under the new deal, Thomson would share in guide advertising sales -- an important piece of the IPG revenue pie that was the focus of the prior claims in arbitration.

They also plan on extending the partnership beyond Thomson TVs, into the licensing of Gemstar's IPG into next-generation Thomson CE products, including digital televisions, digital recorders, satellite receivers and cable set-top boxes. Beyond device implementation of the IPG, the partnership is likely to evolve to include interactive services and two-way response networks in the future.