PARIS, France and PASADENA, California, May 17, 2002 - Thomson multimedia [Paris Euronext 18453, NYSE: TMS] and Gemstar-TV Guide International, Inc. [NASDAQ:GMST] announced today that they have signed a binding Letter of Intent which would relaunch and broaden areas included in their Strategic Partnership. The parties anticipate executing a definitive Strategic Partnership Agreement, which will be presented to the respective Boards of Directors of Thomson and Gemstar, prior to the end of June 2002. The parties have agreed to dismiss the pending arbitration proceedings, which have been stayed, upon execution of the definitive Strategic Partnership Agreement.
Thomson and Gemstar started co-operation in developing and deploying Interactive Program Guide products under the name GUIDE Plus+ (IPG) on Thomson television sets in 1996, and Thomson has since deployed approximately 7 million televisions containing the GUIDE Plus+ system. Since then, the corporate strategies of the two companies have evolved significantly. The Letter of Intent is aimed at aligning the evolved interests of the two partners to develop a balanced commercial relationship and capture opportunities offered by the advent of digital technologies and interactive services.
The Letter of Intent provides for the following, among others:
- Renewed commercial relationship in the incorporation of Gemstar’s GUIDE Plus+ Interactive Program Guide (IPG) in Thomson’s televisions and access devices in North America and in Europe. The cooperation provides for Thomson to share in guide advertising revenues, which are sold via Gemstar’s Group Media Sales force.
- Long-term relationship in the licensing of Gemstar’s IPG technology for incorporation into Thomson devices which focus on the next generation digital products including digital televisions, digital ready televisions and digital recorders such as hard disc recorders and DVD-recordables, satellite receivers and cable set top boxes, and cooperation to strengthen respective intellectual property positions.
- Cooperation in interactive services and two-way response networks, with Gemstar using Thomson as a preferred supplier for broadcast and response network for both video and data in all of its interactive services.
Thomson is today a leading provider of technologies, products and services that enable the production, enhancement, distribution and access of video images. Thomson’s New Media Services division activities are focused interalia on enabling technologies and support services for interactive service providers who interface directly with the end consumer. In particular, Thomson intends to develop "back office" services supporting interactive advertising, interactive services, VOD, and television-based transactions.
After the merger with TV Guide, Inc, Gemstar is now a technology and media leader in television entertainment, with television guidance products licensed to over 180 companies in such diverse industries as consumer electronics, cable, satellite, Internet and personal computers. Gemstar-TV Guide's mission is to simplify and enhance consumers' entertainment experiences through innovative, proprietary technologies and systems. Gemstar’s business model is to generate recurring income through licensing, advertising and e-commerce from its proprietary technology and multi-media platforms.
The Strategic Partnership announced today will allow both partners to firm up and accelerate their strategies. Gemstar can look to a broad distribution of its IPG on Thomson products, and will benefit from Thomson’s system integration and network management skills to develop advertising and interactive services. Thomson can look to increased need of response networks in the cable and broadcast industry as a result of stimulation by IPG and other interactive services and to an additional recurring revenue stream in interactive television through revenue share and cooperation.
"We have set the basis for a fresh new start in a promising and fruitful cooperation, now aligned with Thomson’s New Media Services strategy and improve significantly the division’s financial profile," said Frank Dangeard, Senior Executive Vice President, Thomson. "Thomson’s systems integration capabilities, back office network management skills and access products can play a pivotal role for the deployment of Gemstar’s interactive services".
"I am extremely pleased with this strategic partnership arrangement with Thomson," said Henry Yuen, chairman and chief executive officer of Gemstar-TV Guide. "Six years ago, Gemstar and Thomson were natural partners on the IPG; today, Gemstar and Thomson are once again natural partners to accelerate the opportunities associated with digital technologies and interactive television. We believe that offering one-stop shopping not only to consumers, but to our customers and partners, will surely stimulate and accelerate digital and interactive rollout."
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With sales of 10.5 billion Euros (U.S. $ 9.3 billion) in 2001 and 73,000 employees in more than 30 countries, Thomson multimedia (Euronext: 18453) (NYSE: TMS) provides a wide range of video (and enabling) technologies, systems, finished products and services to consumers and professionals in the entertainment and media industries. To advance and enable the digital media transition, Thomson has five principal activities: Digital Media Solutions, Displays and Components, Consumer Products, Patents and Licensing, and New Media Services. The company distributes its products under the THOMSON, RCA and TECHNICOLOR brand names.
About Gemstar-TV Guide International, Inc.
Gemstar-TV Guide International, Inc., is a leading global technology and media company focused on consumer entertainment. The Company has three major business sectors: the Technology and Licensing Sector, which is responsible for developing, licensing and protecting the Company's intellectual property and technology; the Company's technology includes the VCR Plus+® system, interactive program guide (“IPG”) products and services marketed under the GUIDE Plus+® and TV Guide InteractiveSM brands and the electronic book (“Gemstar eBookTM”); the Interactive Platform Sector, which derives recurring income from advertising, interactive services, content sales and e-commerce on the Company's proprietary platforms, including IPG, tvguide.com, eBook, and skymall.com; and the Media and Services Sector, which operates the TV Guide® magazines, TV Guide ChannelSM, TVG NetworkSM, and other television media properties, provides programming and data services, sells merchandise through the SkyMallTM catalog and operates a media sales group that services all of the Company's media properties.
The IPG products are integrated into various devices, including televisions, VCRs and set-top boxes (cable, satellite, telco, Internet) and can display a multi-day television program guide on the television screen from which the consumer can view, select, tune to or record programs. The Gemstar eBook is a reading device that can store tens of thousand of pages, and permits a user to purchase and receive instant delivery of any book, magazine or newspaper over a standard telephone line.
Over 100 million people in the U.S. use the Company’s media properties every week, and its products and services are available in over 60 countries worldwide.
The Company’s services, technology and intellectual property are licensed to major technology, media and communication companies in the consumer electronics, Internet, personal computer, satellite, cable television and telco industries. Licensees and customers include Adelphia, AOL Time Warner, AT&T;, Cablevision, Charter, Comcast, Cox, Matsushita, Microsoft, Mitsubishi, Motorola, Philips, Shaw, Sony, Thomson Multimedia, Zenith and others. The Company has more than 200 issued U.S. patents in the general area of audio-visual technologies with over 4,900 claims, over 320 issued foreign patents, and continues to actively pursue a worldwide intellectual property program and currently has roughly 350 U.S. and 1,300 foreign patent applications pending.
Note to Editors: Gemstar, TV Guide, Gemstar eBook, GUIDE Plus+, TV Guide Interactive, VCR Plus+, PlusCode, TVG Network, SkyMall and skymall.com are trademarks of Gemstar-TV Guide International, Inc. Other product names used herein are for identification purposes only and may be trademarks of their respective companies.
- For Thomson
Marc Meyer - Tel: 3220.127.116.1103 -