Macrovision to Buy TV Guide December 7, 2007Posted by David Card in Media.
DRM company Macrovision announced an agreement to buy Gemstar TV Guide, which is 41% owned by News Corp.
Gemstar-TV Guide is a slowly shrinking $600 million company (twice as big as Macrovision) with only approximately a quarter of its revenues in pure technology and patent licensing. Over half its revenue came from TV Guide magazine and various TV and online networks; and another quarter or so from on-air electronic or interactive program guides (EPG or IPG), which are a mix of ad sales and affiliate licensing (cable and satellite operators).
Macrovision execs see synergies between the companies — primarily with the IPG and technology/middleware licensing — and promise to learn the media business and evaluate whether to keep the magazine and TV network businesses over the coming months. They see a future of a customized IPG as the home entertainment discovery and management vehicle across all devices and platforms. Macrovision already owns AMG, which provides music data to just about everybody (at, apparently, a lower price than TVG licenses its DB), but didn’t have any TV and movie data. Macrovision reasons that with TV Guide, it has just as big a reach across digital consumers as anybody (it sounds like 80+ million to me) and relationships with just about every important content asset owner and distributor through one company or another (a reasonable assumption).
Jupiter has long been skeptical (see 2000 report) about comparing the market power of the IPG with that of the Internet portals. True, the discovery role is very similar, and Google shows you don’t have to have massive content assets or audience time-spent to get a lot of ad revenues. But you do have to have ad revenues. Technology licensing is not where it’s at — it has to be the means to the end, in this analyst’s opinion (but you know my biases).
This is a really intriguing match, but, you’d better learn that media business fast, guys.