Rovi’s TotalGuide Gets Design Wins with CE Manufacturers

Rovi gained design wins for its TotalGuide interactive program guide (IPG) and expects the first Blu-ray players and TVs containing it will ship Q1 2011, senior executives said on an earnings call. Rovi has said it would transfer the IPG’s source code to CE partners in Q2 (CED Feb 16 p2).

TotalGuide, which will be at the heart of Rovi’s Connected Platform, will draw together technology the company acquired in buying All Media Guide, Gemstar TV Guide International, Muze and Mediabolic. The EPG will consist of broadcast, broadband and personal guides available for CE products or deployed in select components under professional services agreement. TotalGuide also will bring together what had been separate EPGs aimed at individual markets including TV Guide on Screen (North America), G-Guide (Japan) and Guide Plus (Europe). The EPG will be a guide for Internet-based content including that from Blockbuster, Flickstr, Rhapsody, Showtime, ZillionTV and others. Space within the guide also will be dedicated to in-grid advertising. Rovi had hoped to have the Connected Platform available late last year (CED Oct 9/08 p1).

Rovi originally hoped to have TotalGuide in products this year (CED July 20 p1). And while Rovi hasn’t identified its first TotalGuide partners, Sony and Vizio are among those that signed licensing agreements with the company last year.

At the same time, Rovi will show prototypes at the NCTA Cable Show in Los Angeles this week an IPG combining its Passport on the back-end with a TotalGuide user interface. Passport is an IPG targeting cable operators that it inherited in buying Aptiv. It also will demonstrate an IP-only version of the IPG with a “leading” set-top box supplier, CEO Fred Amoroso said. Last August, Rovi shifted resources to developing a version of TotalGuide for cable operators, speeding up development by about a year, Amoroso said. Rovi has been developing tru2way-compliant Passport 2.0 IPG, which has been slowed by a lack of demand for the 2-way technology. The revamped Passport allows for remote recording and video-on-demand search and is being used to replace Cisco’s Sara IPG that’s in Scientific-Atlanta STBs. Rovi is working with one cable operator to replace the Sara IPG in six million of its 8 million STBs, Chief Financial Officer James Budge said.

A key revenue generator within the guides will be ads. Rovi has its IPG ad network in 30 million homes and 23 cable operators in 20 markets, company officials said. Rovi also is working with two cable operators to sell ads on non-Passport IPGs, Amoroso said. It also is in partnership with a direct response advertising firm, company officials said. Rovi forecast ad revenue of $20-$30 million this year, up from $10-$15 million in 2009 (CED Feb 16 p3).

Meanwhile, Rovi has reached settlements with DirecTV and Thomson, ending a legal battle the company inherited in buying Gemstar-TV Guide International in 2005. Terms weren’t released. The suits claimed that Gemstar, prior to being acquired by Rovi, agreed to indemnify Thomson and DirecTV for satellite-related IPG suits. A federal arbitration panel awarded damages to DirecTV (CED March 12 p6) following a hearing in December. Rovi paid DirecTV the arbitration award in March, Rovi said in a 10Q filed with the SEC. Thomson, which sued Rovi in 2008, in Indiana Superior Court, reached a confidential agreement in March, Rovi said. Rovi incurred $24.5 million costs in Q1 -- the majority related to the Thomson-DirecTV case -- as indemnification claims exceeded reserves created when it bought Gemstar, the company said.

Rovi took a $1.4 million loss on the sale of its 49 percent of the Guideworks joint venture to partner Comcast, the company said. In selling its ownership, Rovi bought Comcast’s interest in patents developed by Guideworks, the company said. It received a $4.2 million net payment, Rovi said. The six-year-old venture developed IPGs under the I-Guide. Rovi incurred $1.7 million in R&D expenses in Q1 related to Guideworks, the company said.

Rovi ended Q1 with $382 million in cash, cash equivalents and short-term investments, including $37 million in escrowed funds stemming from the sale of the TV Guide Network and TV Guide Online to Lionsgate last year. Rovi will receive the escrow money by month’s end, Budge said. It also completed a $460 million convertible debt financing in March, using some of the proceeds to pay off $157 million in loans related to its Gemstar purchase, the company said. Rovi has a $2.1 million liability stemming from office leases related to the sale of TV Guide Network, TV Guide Online, TV Guide Magazine and TVG Network, it said.

The company swung to a $68 million Q1 profit from a $41.5 million loss a year earlier as revenue rose to $130 million from $111.1 million, the company said. Rovi’s service provider revenue rose to $67.3 million from $52.4 million, while that from CE manufacturers inched up to $48.5 million from $46.4 million.

As Rovi pushes forward with digital technology, the end is near for VCR Plus, a analog technology that launched Gemstar in the early 1990s, company officials said. VCR Plus will wind down this year “for all intents and purposes” with only a “small amount of revenue expected in 2011, Budge said. - Mark Seavy