Gemstar-TV Guide International
were up more than 22% Friday afternoon following the company's announcement of a 20-year agreement to license its interactive programming guide to
, the nation's third-largest cable TV operator.
The deal, which Gemstar said was more than a year in the making, is a vote of confidence for the company's patent portfolio and its plans of playing a major role in a variety of forthcoming advanced television services.
The transaction also provided Pete Boylan, Gemstar's co-president and co-CEO, the opportunity to lay into satellite operator
for comments that EchoStar CEO Charlie Ergen reportedly made during a meeting with analysts earlier this month. Gemstar and EchoStar are engaged in litigation in which Gemstar alleges EchoStar's interactive programming guide has infringed on Gemstar's patent holdings.
Most terms of the Comcast deal weren't disclosed, but it appears to give Gemstar a strong presence in any form of interactive television Comcast might offer over the next two decades. As part of the agreement, the cable company plans to offer Gemstar's
TV Guide Interactive
to a majority of its cable homes, including its six largest markets.
The agreement covers Gemstar's involvement in services including video on demand, personal video recorders, wireless home networking and the use of "hybrid display devices," Boylan said. In addition, it anticipates Comcast's carriage of Gemstar's start-up horse-race wagering business
Television Games Network
, as well as an alliance between Gemstar and Comcast's
television shopping network.
Currently, Gemstar's interactive programming guide is in more than 65% of Comcast's 1.35 million households with digital cable service, said Boylan, with
guide in most of the rest of those and
product in about 1%.
Gemstar "certainly" hopes to get all the remaining interactive programming guide business, said Boylan. WorldGate's shares were up 7.8% in Friday afternoon trading, and Scientific-Atlanta's were down 3.6%.
On a conference call, Boylan accused Ergen and EchoStar of "telling some pretty tall tales" about Gemstar's business at EchoStar's meeting with analysts on March 14. Boylan went through various allegations from EchoStar he said he'd heard second-hand, dismissing one as "bizarre interpretation" and disputing what he said was EchoStar's comment that Gemstar's patents hadn't withstood the test of litigation. "These patents are indeed not virgins," Boylan said.
An EchoStar spokeswoman acknowledged that Ergen and EchoStar general counsel David Moskowitz had indeed commented on the Gemstar litigation, but said they simply had reiterated public statements EchoStar had made earlier. She declined to comment on Boylan's statements Friday, citing the ongoing litigation.
Gemstar's stock was at $35.56 Friday afternoon, up $6.63.