Gemstar TV Guide International (GMST) Inactive
Filed: 7 Dec 07, 12:00am
Filed by Macrovision Corporation Pursuant to
Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Companies:
Macrovision Corporation (Commission File No. 000-22023, and
Gemstar-TV Guide International, Inc. (Commission File No. 0-24218)
On and after Friday, December 7, 2007, Macrovision Corporation will use the following materials in connection with certain investor presentations:
 © 2007 Macrovision Corporation | Company Confidential 1 Enabling Digital Home Enabling Digital Home Entertainment Entertainment Agrees to Acquire Agrees to Acquire |
 © 2007 Macrovision Corporation | Company Confidential 2 Forward Looking Statement Forward Looking Statement Statements contained in this document regarding the consummation and potential timing and benefits of the pending acquisition are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and are made under its safe-harbor provisions. Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to: failure to satisfy any of the conditions to complete the acquisition, inability to successfully integrate the businesses and operations of Macrovision and Gemstar-TV Guide, failure to achieve anticipated benefits and cost savings, failure to obtain financing to complete the transaction, and the increased leverage of the combined business, as well as the risk factors relating to each business as disclosed in Macrovision’s and Gemstar-TV Guide’s respective filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward- looking statements, which reflect management’s analysis only as of the date hereof. Except as required by law, Macrovision and Gemstar-TV Guide undertakes no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. |
 © 2007 Macrovision Corporation | Company Confidential 3 Additional Information Additional Information MACROVISION AND GEMSTAR-TV GUIDE STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND REGISTRATION STATEMENT REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Stockholders may obtain a free copy of the joint proxy statement/prospectus and registration statement (when available), as well as other documents filed by Macrovision and Gemstar-TV Guide with the Securities and Exchange Commission, at the Securities and Exchange Commission’s Web site at http://www.sec.gov. Stockholders may also obtain a free copy of the joint proxy statement/prospectus and registration statement and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus directly from Macrovision by directing a request to Macrovision Investor Relations at 408-969-5475 and directly from Gemstar-TV Guide by directing a request to Gemstar-TV Guide Investor Relations at 323-817-4600. Each company’s directors and executive officers and other persons may be deemed, under Securities and Exchange Commission rules, to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding Macrovision’s directors and officers can be found in its proxy statement filed with the Securities and Exchange Commission on March 20, 2007 and information regarding Gemstar-TV Guide’s directors and officers can be found in its proxy statement filed with the Securities and Exchange Commission on April 10, 2007. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests in the transaction, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the Securities and Exchange Commission when they become available. |
 © 2007 Macrovision Corporation | Company Confidential 4 Agenda Agenda Overview Market Dynamics Vision Strategic Rationale Attractive Growth Opportunities Financial Highlights Business Highlights: Macrovision and Gemstar-TV Guide 4 Agenda |
 © 2007 Macrovision Corporation | Company Confidential 5 Combined Company Focus Combined Company Focus Digital Media Infrastructure Leaders to Combine • Gemstar-TV Guide – leader in video guidance and entertainment o IPGs operating in 24M North American households o 13M using i-Guide or Passport, 11M using Guideworks i-Guide o Over 25 million CE IPGs shipped worldwide to-date o Products and Services reach over 73 million unique consumers per week • Macrovision – leader in content security, management, and recognition o Technology on over 9B DVDs, over 500M devices, over 500M PC’s Empowering our customers to enable consumers to enjoy digital media on their terms • Content owners seeking to securely distribute media amid shift from analog to digital • Distribution channels seeking to reduce churn in converged world through enhanced services • Device manufacturers seeking independent third party software Overview Discover, Discover, acquire, acquire, manage manage and and enjoy enjoy digital digital content content across across platforms platforms and and channels channels |
 © 2007 Macrovision Corporation | Company Confidential 6 Key Combined Company Highlights Key Combined Company Highlights Poised for opportunities across evolving digital media value chain • Leading IP licensing technology provider o Approximately 450 U.S. and 1,900 international patents at closing o Proprietary databases of music, movies, TV, and games metadata o Gemstar - 1M TV series episodes, 190K movies o Macrovision (AMG¹) - 11M songs, 1M albums, 500K cover images • Core technologies include protection, distribution, and enhancement o Industry standard technologies include BD+, ACP o Leadership position in IPG’s o DLNA standards-based connected platform • Customer footprint extends across the content value chain o Movie studios, system operators, Internet content distributors, device manufacturers Compelling financial model • High growth, margins, & visibility with strong cash flows o Target model - 10-15% revenue CAGR, 40% EBITDA margin, $200M+ operating cash flow CEO and CFO to remain Fred Amoroso and James Budge, respectively 1 Subject to close of AMG transaction. Overview |
 © 2007 Macrovision Corporation | Company Confidential 7 Transaction Summary and Timeline Transaction Summary and Timeline Total Consideration – approximately $2.8 billion or $6.35/share • 19% premium to July 9th unaffected Gemstar share price of $5.34 • 27% premium to Gemstar’s last 10 day closing avg. price of $5.01 prior to and including July 9th Cash/Stock Mix - 56% ($1.6B) Cash / 44% ($1.2B) stock (tax-deferred basis) • New holding company will be established containing both Macrovision and Gemstar o Each MVSN share will convert into one share of Newco o Each GMST share will convert based on cash/stock election to either – $6.35/share in cash or 0.2548 shares of Newco for each GMST share (fixed exchange ratio) – In case of oversubscription, funds distributed pro rata Newco to apply to continue to be listed on NASDAQ Global Select Market Pro Forma ownership following close - Macrovision stockholders (53%)/Gemstar (47%) • News Corporation (41% holder of GMST), has agreed to vote in favor of transaction Financing - Macrovision to raise $800 million of new debt to finance the acquisition • Committed financing provided by JP Morgan and Merrill Lynch o $650M Term Loan B/$150M High Yield Timing - Expected closing by early second quarter, 2008 • Financing marketing process and stockholder proxy solicitation in Q1, 2008 Overview |
 © 2007 Macrovision Corporation | Company Confidential 8 2010 2020 2000 Market Transformation Market Transformation Physical to Digital Broadband Digital TV / HD Convergence • • 89 million DTVs by 2011, 89 million DTVs by 2011, a 12.1% annual a 12.1% annual compound increase compound increase¹ 1 • • Online movie Online movie revenues will reach revenues will reach $1.8B by 2011 $1.8B by 2011² 2 • • Americans viewed more Americans viewed more than 8.3 billion online than 8.3 billion online video streams video streams in May in May³ 3 1 1 U&S Industry Research & Estimates U&S Industry Research & Estimates 2 2 Diffusion Group, Jan 2007 Diffusion Group, Jan 2007 3 3 ComScore ComScore The digital home is undergoing one of the the largest transformations The digital home is undergoing one of the the largest transformations since the introduction of the TV since the introduction of the TV Vision |
 © 2007 Macrovision Corporation | Company Confidential 9 Growing Demand for Digital Products and Services Growing Demand for Digital Products and Services 249 301 347 386 421 450 0 100 200 300 400 500 2006 2007 2008 2009 2010 2011 15 30 58 98 145 187 0 25 50 75 100 125 150 175 200 2006 2007 2008 2009 2010 2011 Source: iSuppli, Q2, 2007 Global Mobile Video Subscribers Source: Yankee Group Research, July 2007 Global Broadband Subscribers 87.6 96.7 104.1 112.2 119.6 0 20 40 60 80 100 120 140 2007 2008 2009 2010 2011 178 219 266 314 362 407 0 100 200 300 400 500 2006 2007 2008 2009 2010 2011 Global Digital TV Subscribers Source: Yankee Group Research, July 2007 Global CE Shipments¹ 1 Includes TVs (excluding CRT) and digital recorders Source: Gemstar-TV Guide industry reports Vision |
 © 2007 Macrovision Corporation | Company Confidential 10 Transformation Affecting Our Customers Transformation Affecting Our Customers Content owners Content owners • Increasing demand for security and protection • Seeking digital distribution solutions Distribution Channels Distribution Channels • Need to reduce churn through enhanced consumer experience o Converged services driving heightened competition • Guidance is mission critical to the distributor’s end user Device Manufacturers Device Manufacturers • Need 3 rd party software/services to improve experience, reduce time-to- market o Global competition from low cost OEM/ODM commoditizing market o End-to-end providers, e.g., Apple, taking share from incumbents • Desire an ongoing revenue relationship with customer and differentiation Consumers Consumers • Many silos of content users want to consume throughout their personal network o Broadcast TV, PVR, music, photos, video downloads, etc. • Demand for open systems Market Dynamics An Open, Secure, Connected, Digital Media Platform is Required An Open, Secure, Connected, Digital Media Platform is Required |
 © 2007 Macrovision Corporation | Company Confidential 11 The Vision The Vision Become a leading independent enabler of the digital home media experience and enhance the end user entertainment experience Provide open infrastructure for content producers, distributors, and device manufacturers to protect, enable and distribute content Empower consumers to discover, acquire, manage and enjoy content Combination of MVSN and GMST results in unique set of solutions Vision |
 © 2007 Macrovision Corporation | Company Confidential 12 Focused on Consumer Experience Focused on Consumer Experience Vision Delivering the Platform our Partners Require to Satisfy Consumer Delivering the Platform our Partners Require to Satisfy Consumer Demands Demands |
 © 2007 Macrovision Corporation | Company Confidential 13 Complementary Technologies Complementary Technologies BD+ RipGuard ACP RightAccess RightCommerce IPG My TV Guide Services TV Guide Magazine Data Services AMG Data Services¹ SafeDisc ActiveMark ActiveSTORE Consumer Sites TV Guide Entertainment Network TV Guide SPOT/Broadband Online Networks MyTVGuide Services Data Services BD+ Connected Platform (Formerly Mediabolic) Tapestry¹ Lasso¹ AMG Data Services¹ ACP iGuide G-Guide Guide+ Passport VCR+ Data Services Content Producers Distribution Channels Consumer Devices 1 1 Subject to close of AMG transaction Subject to close of AMG transaction Strategic Rationale |
 © 2007 Macrovision Corporation | Company Confidential 14 Synergistic Value Propositions Synergistic Value Propositions Distribution Channels: System Operators Content Publishers • Increase revenue generating services offered to customers • Drive STB usage, increasing ad revenue • Offer customers a richer media experience; reduce churn • Content protection solutions • B2C distribution capabilities Distribution Channels: Service Providers • Access to new installed base by integrating with our CE solution • Offer their customers a richer end user experience Discover Acquire Manage Enjoy Rich consumer experience: Strategic Rationale CE Manufacturers (STB /PC / Mobile …) • Increase value per device • Create ongoing revenue relationship with their customers • Reduce time to market with competitive services • Compete with closed competitors, without having to recreate the ecosystem • Offer their customers a richer media experience |
        © 2007 Macrovision Corporation | Company Confidential 15 Creating Digital Media Push/Pull Effect Creating Digital Media Push/Pull Effect 1 Subject to close of AMG transaction 1 1 1 1 Strategic Rationale Content Producers Distribution Channels Consumer Devices Consumers influence content, which influences distribution channels and devices • All constituents affect each other Macrovision/Gemstar-TV Guide touches the key constituents in the value chain • Technologies reside on the content and in the network and devices • By positively influencing the way consumers interact with media, we can increase stickiness |
 © 2007 Macrovision Corporation | Company Confidential 16 Market Opportunity Market Opportunity Device Device Manufacturers Manufacturers Revenue Model Opportunity • Software/service/IP License • Per unit royalties • Annual TAM per device - $1-$2B (500 Million units)* • License/Services Annual TAM - $1B+* • Annual Digital Video TAM - $1B-$2B** • Annual Other Services TAM - $20B+* Distribution Channels: Distribution Channels: System System Operators Operators Revenue Model Opportunity • Revenue share • Software/IP licensing • Internet Ad Annual TAM - $78B (2011)** • TV Ads Annual TAM - $143B (2011)** • IP Licensing - $500M+*** Distribution Channels: Distribution Channels: Service Service Providers Providers Revenue Model Opportunity • Revenue share • Service placement • Ad supported content • Meta data - $100-$300M * • IP Licensing - $500M+*** *Macrovision management calculations ** PWC 2007 Global Entertainment Media Outlook *** GMST mgmt estimates Strategic Rationale |
 © 2007 Macrovision Corporation | Company Confidential 17 Attractive Growth Opportunities Attractive Growth Opportunities Connected Cross Platform Connected Services International MyTVGuide Services • Advertising, recommendations, personalization, measurement, etc. Growing advertising opportunity Device registration Partners Growing EMEA patent portfolio Growth in new devices and digital adoption internationally Integrated and connected cross platform solutions for guidance and media interaction Television STB/DVR Mobile PC Data Services Expand emerging TV Data licensing business Integrate data across multiple media types |
 © 2007 Macrovision Corporation | Company Confidential 18 Key Pro Forma Financial Metrics Key Pro Forma Financial Metrics 18 © 2007 Macrovision Corporation | Company Confidential Target annual revenue growth rate: 10-15% Target Non-GAAP 1 EBITDA margin: 40% Strong operating cash flow generation ($200M+) • Debt repayment forecasted in 3-4 years Predictable revenue streams • Predominantly royalty-based, recurring revenue streams o Driven by growth in shipments of media & devices Significant leverage in operating model • Low variable costs Diversified market, customer and technology footprint • Major customers include venerable companies o Service providers, device manufacturers, movie studios • Low customer concentration Upside potential through strategic alternatives 1 Non GAAP primarily excludes non cash charges for intangible amortization and stock based compensation Financials |
 © 2007 Macrovision Corporation | Company Confidential 19 1 FY ’07 YTD as of September 30, 2007 Standalone Macrovision GAAP Financials Standalone Macrovision GAAP Financials Revenues GAAP Operating Margin GAAP EPS GAAP Gross Margin $203M $248M $199M 21% 14% $0.43 $0.63 83% 78% 78% 9% $0.41 FY '05 FY '06 FY '07 YTD 1 2 Financials |
 © 2007 Macrovision Corporation | Company Confidential 20 1 FY ’07 YTD as of September 30, 2007 2 FY ‘07 estimates provided during November 6, 2007 conference call 3 Non GAAP primarily excludes non cash charges for intangible amortization and stock based compensation Macrovision provides non-GAAP financial information to assist investors in assessing its current and future operations in the way that Macrovision’s management evaluates those operations. Non-GAAP Gross Margin and Non-GAAP Operating Margin are supplemental measures of Macrovision’s performance that are not required by, and are not presented in accordance with, GAAP. The non-GAAP information does not substitute for any performance measure derived in accordance with GAAP. Macrovision believes that this non-GAAP information provides useful information to investors by excluding the effect of amortization of intangibles from acquisitions, restructuring and other costs, and equity-based compensation charges that are required to be recorded under GAAP, but that Macrovision believes are not indicative of Macrovision’s core operating results or that are expected to be incurred over a limited period of time. In accordance with Regulation G, a presentation of the most directly comparable GAAP measures is contained on the next slide. Further discussion of the use of non-GAAP financial measures is presented in Macrovision’s press release furnished on Form 8-K filed on November 6, 2007. Standalone Macrovision Non-GAAP Financials Standalone Macrovision Non-GAAP Financials FY '05 FY '06 FY '07 YTD Revenues $203M $248M $199M Non GAAP 3 Operating Margin 28% 28% Non GAAP 3 EPS $0.87 $1.17 Non GAAP 3 Gross Margin 89% 84% Operating Cash per Share $1.07 $1.71 84% 27% $0.94 $1.06 $283M 83-85% 27-29% $1.41-$1.46 Not provided FY '07 Estimates 1 2 Financials |
 © 2007 Macrovision Corporation | Company Confidential 21 Macrovision GAAP to Non-GAAP Reconciliation Macrovision GAAP to Non-GAAP Reconciliation Financials Macrovision provides non-GAAP financial information to assist investors in assessing its current and future operations in the way that Macrovision’s management evaluates those operations. Non-GAAP Gross Margin and Non-GAAP Operating Margin are supplemental measures of Macrovision’s performance that are not required by, and are not presented in accordance with, GAAP. The non-GAAP information does not substitute for any performance measure derived in accordance with GAAP. Macrovision believes that this non-GAAP information provides useful information to investors by excluding the effect of amortization of intangibles from acquisitions, restructuring and other costs, and equity-based compensation charges that are required to be recorded under GAAP, but that Macrovision believes are not indicative of Macrovision’s core operating results or that are expected to be incurred over a limited period of time. In accordance with Regulation G, a presentation of the most directly comparable GAAP measures is contained on the next slide. Further discussion of the use of non-GAAP financial measures is presented in Macrovision’s press release furnished on Form 8-K filed on November 6, 2007. In-process Restructuring Income Tax Effect GAAP Amortization Equity-based research and and Impairment of Non-GAAP Non-GAAP Gross Margin of Intangibles Compensation development Charges Adjustment Gross Margin FY '05 83% 6% 0% 0% 0% 0% 89% FY '06 78% 5% 1% 0% 0% 0% 84% FY '07 YTD 78% 5% 1% 0% 0% 0% 84% In-process Restructuring Income Tax Effect GAAP Amortization Equity-based research and and Impairment of Non-GAAP Non-GAAP Operating Margin of Intangibles Compensation development Charges Adjustment Operating Income FY '05 21% 6% 0% 0% 1% 0% 28% FY '06 14% 5% 9% 0% 0% 0% 28% FY '07 YTD 9% 5% 6% 0% 7% 0% 27% In-process Restructuring Income Tax Effect GAAP Amortization Equity-based research and and Impairment of Non-GAAP Non-GAAP EPS of Intangibles Compensation development Charges Adjustment EPS FY '05 0.43 $ 0.23 $ 0.01 $ 0.01 $ 0.16 $ 0.03 $ 0.87 $ FY '06 0.63 $ 0.26 $ 0.42 $ - $ - $ (0.14) $ 1.17 $ FY '07 YTD 0.41 $ 0.21 $ 0.21 $ - $ 0.24 $ (0.13) $ 0.94 $ |
 © 2007 Macrovision Corporation | Company Confidential 22 1 FY ’07 YTD as of September 30, 2007 Standalone Gemstar-TV Guide GAAP Financials Standalone Gemstar-TV Guide GAAP Financials Revenues GAAP Operating Margin GAAP EPS 12% $0.17 15% $0.42 FY '06 FY '07 YTD 1 Financials $571M $472M |
    © 2007 Macrovision Corporation | Company Confidential 23 Standalone Gemstar-TV Guide Segment Financial Standalone Gemstar-TV Guide Segment Financial Information Information Revenues ($, millions) $571 $472 Guidance $223 $215 Media $197 $148 Publishing $151 $109 Adjusted EBITDA ($, millions) $102 $104 % margin 18% 22% Guidance $136 $144 % margin 61% 67% Media $43 $23 % margin 22% 16% Publishing ($42) ($9) % margin na na Cross platform ($35) ($54) FY '07 YTD 1 (1) FY ’07 YTD as of September 30, 2007. (2) Adjusted EBITDA is defined as operating income (loss), excluding stock compensation, depreciation and amortization and impairment of intangible assets. Intersegment revenues and expenses have been eliminated from segment financial information as transactions between reportable segments are excluded from the measure of segment profit and loss reviewed by the chief operating decision maker. The Company believes adjusted EBITDA to be relevant and useful information as adjusted EBITDA is the primary measure used by our chief operating decision maker to evaluate the performance of and make decisions about resource allocation to the segments. Segment information is presented and reconciled to consolidated income from continuing operations before income taxes in accordance with SFAS No. 131 on slide 24. Financials FY '06 2 |
 © 2007 Macrovision Corporation | Company Confidential 24 Gemstar-TV Guide Adjusted EBITDA to Net Income Reconciliation Gemstar-TV Guide Adjusted EBITDA to Net Income Reconciliation Financials (1) This information should be read in the context of the Company’s financial statements contained in the Form 10Q for the fiscal quarter ended September 30, 2007 and Form 10K for the fiscal year ended December 31, 2006. (2) FY ’07 YTD as of September 30, 2007. (3) Adjusted EBITDA is defined as operating income (loss), excluding stock compensation, depreciation and amortization and impairment of intangible assets. The Company believes adjusted EBITDA to be relevant and useful information as adjusted EBITDA is the primary measure used by our chief operating decision maker to evaluate the performance of and make decisions about resource allocation to the segments. FY '06 FY '07 YTD 2 178 72 Net Income 4 - Income from discontinued operations, net of tax 174 72 Income from continuing operations 83 (22) Income tax (expense) benefit 91 94 Income from continuing operations before income taxes - 1 Other Income, net 19 26 Interest Income, net 72 67 Operating Income (29) (33) Depreciation and Amortization (3) (2) Stock Compensation 104 102 Adjusted EBITDA (3) ($, millions) 1 |
 © 2007 Macrovision Corporation | Company Confidential 25 Creating Stockholder Value Creating Stockholder Value One of the largest and most profitable digital media IP licensing & technology solution providers • Leadership position in IP and metadata • Core skills in security, distribution, and enhancement Unique opportunity for independent provider to become leading enabler of digital home entertainment • Content owners seeking to maintain control over content, protect investments, increase ROI • Service providers must innovate to reduce churn amid convergence • CE vendors threatened by global competition; seeking third party software solutions Well positioned to capture opportunities across the evolving digital content value chain • Distribution of digital media requires many of our security technologies • Connected digital media devices require many of our enhancement technologies o Able to positively impact value chain at both ends of connection Combined customer footprint extends across value chain • Device OEMs, cable/satellite/mobile operators, online portals and studios o Critical mass necessary to effect change across value chain Transaction yields meaningful synergies and a compelling financial model 25 © 2007 Macrovision Corporation | Company Confidential Summary |
 © 2007 Macrovision Corporation | Company Confidential 26 Business Highlights Business Highlights |
 © 2007 Macrovision Corporation | Company Confidential 27 Macrovision Business Highlights Macrovision Business Highlights Headquarters Founded Segments Selected Customers Employees Revenue Revenue Breakdown Santa Clara, California 1983 Entertainment, Embedded Solutions, Distribution & Commerce, Software 758 as of September 30, 2007 FY 2006 $248mm Patents (primarily protection) 21% Embedded Solutions International: 950+ issued / 400+ pending US: 130+ issued / 140+ pending 9 Months YTD 2007 $199mm 34% Embedded Solutions 8% Distribution & Commerce 47% Software 8% Distribution & Commerce 40% Software 24% Entertainment 18% Entertainment 1 Fiscal year ended December 31st 2 FY ’07 YTD as of September 30, 2007 1 2 MVSN Overview |
                 © 2007 Macrovision Corporation | Company Confidential 28 Core Business Areas Core Business Areas Adobe, Agilent, Adobe, Agilent, Autodesk, IBM, Autodesk, IBM, Microsoft Microsoft Sony, Samsung, Sony, Samsung, Philips, Buffalo, Philips, Buffalo, Dell, Cisco (SA) Dell, Cisco (SA) Yahoo, AOL, Yahoo, AOL, Electronic Arts, Electronic Arts, Vivendi Vivendi Disney, Fox, Disney, Fox, Paramount Paramount Sample Customers Sample Customers Key Statistics Key Statistics Software Software Embedded Embedded Commerce Commerce Entertainment Entertainment ActiveMARK + Connected Platform LASSO Tapestry BD+ 9 billion protected units 300 Million Discs Deployed on 500M+ PCs 700+ HW Licenses 500+M enabled devices MVSN Overview Products BD+ AMG Data Services 1 Subject to close of AMG transaction. 1 1 1 |
 © 2007 Macrovision Corporation | Company Confidential 29 Delivering on the Ecosystem Delivering on the Ecosystem MVSN Overview BD+ RightAccess ActiveMARK FLEXnet Publisher FLEXnet Operations RipGuard ACP Connected Platform FLEXnet Connect FLEXnet Delivery AMG Data Services LASSO1 Tapestry Connected Platform InstallShield InstallAnywhere AdminStudio Workflow Manager FLEXnet Manager ActiveStore RightCommerce 1 1 Subject to close of AMG transaction. 1 |
 © 2007 Macrovision Corporation | Company Confidential 30 Gemstar-TV Guide Business Highlights Gemstar-TV Guide Business Highlights © 2007 Macrovision Corporation | Company Confidential 30 Headquarters Headquarters Formed Formed Segments Segments Selected Customers Selected Customers Employees Employees Revenue Revenue Revenue Breakdown Revenue Breakdown Hollywood, California Hollywood, California 2000 2000 Guidance Technology, Media Networks, Publishing Guidance Technology, Media Networks, Publishing 1,600 as of September 30, 2007 1,600 as of September 30, 2007 FY 2006 FY 2006 $571mm $571mm 1 Fiscal year ended December 31st 2 FY ’07 YTD as of September 30, 2007 34% Media Networks 27% Publishing 39% Guidance Technology Patents (primarily Video Guidance) International: 900+ issued / approximately 550 pending US: 300+ issued / approximately 300 pending 31% Media Networks 23% Publishing 46% Guidance Technology 9 Months YTD 2007 9 Months YTD 2007 $472mm $472mm 1 2 GMST Overview |
            © 2007 Macrovision Corporation | Company Confidential 31 Broad Reach Broad Reach • 49.5M+ domestic & 13M+ Int’l subscribers* • 25 million CE IPGs shipped worldwide* TV Guide Mobile: In Japan, 19M registered users* Online Networks: 5.4mm unique users*** Offerings • Interactive program guide • Data Solutions • tvguide.com •TV Guide Mobile Key Statistics Guidance Data Solutions •TV metadata • TV Guide Network • TV Guide SPOT Networks Publishing • TV Guide Magazine • Network: 83M Cable and satellite households***** • SPOT: 29M+ households nationwide* • 3.2M Weekly circulation**** • 20M+ Estimated weekly readership** ***** Nielsen Q307 **** GMST Q307/10Q *** Nielsen/NetRatings Q307 ** MRI, 11/07 * Gemstar statistics • Serving over 100M consumer weekly • 1mm+ TV series episodes since 1954 •190K+ movies since 1912 •12K+ channel lineups GMST Overview |
 © 2007 Macrovision Corporation | Company Confidential 32 GMST Overview Key Target Customers Key Target Customers Cable and Satellite Operators Cable and Satellite Operators • Solutions include guidance technology (IPG), IP, and data solutions, advanced advertising • Current install based includes: 23mm US Cable HH with Gemstar TVG IPGs & 50mm+ more HH with IPGs under patent license; long term MVSP relationships CE Manufacturers CE Manufacturers • Solutions include guidance technology (EPG), IP, data solutions • 25mm CE IPGs worldwide Consumers Consumers • B2B to Consumer • Reach consumer with data services, websites, advertising |
On Friday, December 7, 2007, Macrovision Corporation used the following materials in connection with a presentation to its employees:
 © 2007 MVSN Corporation | Company Confidential 1 Macrovision to Acquire Gemstar-TV Guide December 6, 2007 |
 © 2007 MVSN Corporation | Company Confidential 2 Forward Looking Statement This document contains "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the proposed acquisition of Gemstar-TV Guide, the integration of its technologies into Macrovision’s products and solutions offerings, Macrovision’s plans for such offerings and customer demand for such offerings. A number of factors could cause Macrovision's actual results to differ from anticipated results expressed in such forward-looking statements. Such factors include, among others, satisfaction of closing conditions to the transaction, the Company’s ability to successfully integrate the merged businesses and technologies, and customer demand for the technologies and integrated offerings. Such factors are further addressed in Macrovision's and Gemstar-TV Guide’s respective Annual Report on Form 10-K for the period ended December 31, 2006, their respective latest Quarterly Report on Form 10-Q for the period ended September 30, 2007 and other securities filings which are on file with the Securities and Exchange Commission (available at www.sec.gov). Neither company assumes any obligation to update any forward-looking statements except as required by law. |
 © 2007 MVSN Corporation | Company Confidential 3 Additional Information MACROVISION AND GEMSTAR-TV GUIDE STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND REGISTRATION STATEMENT REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Stockholders may obtain a free copy of the joint proxy statement/prospectus and registration statement (when available), as well as other documents filed by Macrovision and Gemstar TV Guide with the Securities and Exchange Commission, at the Securities and Exchange Commission’s Web site at http://www.sec.gov. Stockholders may also obtain a free copy of the joint proxy statement/prospectus and registration statement and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus directly from Macrovision by directing a request to Macrovision Investor Relations at 408-969-5475 and directly from Gemstar-TV Guide by directing a request to Gemstar-TV Guide Investor Relations at 323-817-4600. Each company’s directors and executive officers and other persons may be deemed, under Securities and Exchange Commission rules, to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding Macrovision’s directors and officers can be found in its proxy statement filed with the Securities and Exchange Commission on March 20, 2007 and information regarding Gemstar-TV Guide’s directors and officers can be found in its proxy statement filed with the Securities and Exchange Commission on April 10, 2007. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests in the transaction, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the Securities and Exchange Commission when they become available. |
 © 2007 MVSN Corporation | Company Confidential 4 Agenda Agenda Mission and Vision Introduction to Gemstar-TV Guide Strategic rationale Next steps 4 © 2007 MVSN Corporation | Company Confidential Intro |
 © 2007 MVSN Corporation | Company Confidential 5 Mission and Vision |
 © 2007 MVSN Corporation | Company Confidential 6 The Vision The Vision Become a leading enabler of the home content experience and enhance the end user entertainment experience Provide open infrastructure for content producers, distributors, and device manufacturers protect, enable, and distribute content Empower consumers to discover, acquire, manage, and enjoy content Vision |
 © 2007 MVSN Corporation | Company Confidential 7 Key Capabilities and Audiences Vision |
 © 2007 MVSN Corporation | Company Confidential 8 Focused on Consumer Experience Focused on Consumer Experience Vision |
 © 2007 MVSN Corporation | Company Confidential 9 Introduction to Gemstar-TV Guide |
 © 2007 Macrovision Corporation | Company Confidential 10 Gemstar-TV Guide Business Highlights Gemstar-TV Guide Business Highlights © 2007 Macrovision Corporation | Company Confidential 10 Headquarters Headquarters Formed Formed Segments Segments Selected Customers Selected Customers Employees Employees Revenue Revenue Revenue Breakdown Revenue Breakdown Hollywood, California Hollywood, California 2000 2000 Guidance Technology, Media Networks, Publishing Guidance Technology, Media Networks, Publishing 1,600 as of September 30, 2007 1,600 as of September 30, 2007 FY 2006 FY 2006 $571mm $571mm 1 Fiscal year ended December 31st 2 FY ’07 YTD as of September 30, 2007 34% Media Networks 27% Publishing 39% Guidance Technology Patents (primarily Video Guidance) International: 900+ issued / approximately 550 pending US: 300+ issued / approximately 300 pending 31% Media Networks 23% Publishing 46% Guidance Technology 9 Months YTD 2007 9 Months YTD 2007 $472mm $472mm 1 2 GMST Overview |
                 © 2007 MVSN Corporation | Company Confidential 11 Segment and Solution Summary • 25 million CE IPGs shipped worldwide* • 19M TV Guide Mobile Users (Japan) Offerings • Interactive program guide(s) • TV Guide Mobile •Tvguide.com Key Statistics Guidance Data Solutions • Data Solutions (Metadata) • TV Guide Network • TV Guide SPOT •TVG Network Networks Publishing • TV Guide Magazine •83M Cable and satellite HHs •SPOT: 29M+ households nationwide* • 3.2M weekly circulation • 20M+ estimated weekly readership •1mm+ TV series episodes since 1954;190K+ movies since 1912; 12K+ channel lineups GMST Overview Major Customers • System operators • CE manufacturers • System operators • Service providers • System operators • Consumers • Consumers |
 © 2007 MVSN Corporation | Company Confidential 12 Strategic Rationale |
 © 2007 MVSN Corporation | Company Confidential 13 Summary Accelerates Macrovision’s vision by adding: • Deep experience selling to cable and satellite operators • New key solution elements o Guidance technology and IP o TV-related metadata o Advertising o Mobile applications • Substantial consumer electronic installed base Strategic Rationale |
 © 2007 MVSN Corporation | Company Confidential 14 Macrovision + Gemstar-TV Guide Leading provider of connected IP and technology Enable the home content experience Relationships spanning the content value chain Provide infrastructure for content producers, distributors, and CE manufacturers to enable consumers to discover, acquire, manage, and enjoy content High-margin business driven by devices, views, transactions, and purchases Strategic Rationale |
 © 2007 MVSN Corporation | Company Confidential 15 Complementary Technologies BD+ RipGuard ACP RightAccess RightCommerce IPG My TV Guide Services TV Guide Magazine Data Services AMG Data Services¹ SafeDisc ActiveMark ActiveSTORE Consumer Sites TV Guide Entertainment Network TV Guide SPOT/Broadband Online Networks MyTVGuide Services Data Services BD+ Connected Platform (Formerly Mediabolic) Tapestry¹ Lasso¹ AMG Data Services¹ ACP iGuide G-Guide Guide+ Passport VCR+ Data Services Content Producers Distribution Channels Consumer Devices 1 Subject to close of AMG transaction Strategic Rationale |
 © 2007 MVSN Corporation | Company Confidential 16 Potential Benefits Device Manufacturer Goal • IPG & guidance • Discovery • Connected middleware • Content protection • Recognition and recommendation • Metadata • Revenue generating services What We Offer • Provide entire solution set featuring IP, products and services for connected devices across combined customer base • Increased Market Opportunity • Complementary Products • Enhanced Customer Footprint Distribution Channel: System Operators Goal • Advertising • IPG/EPG • Metadata • Revenue generating services Potential Synergy What We Offer • License IPG IP and products and connected/AMG/MyTVGuide solutions to combined customer base • Increased Market Opportunity Distribution Channel: Service Providers Goal • Metadata • IPG & Guidance • Recognition & recommendation • Content partnerships Potential Synergy What We Offer • License IPG IP and products and connected service bundles (such as AMG and MyTVGuide) to combined customer base • Increased Market Opportunity • Complementary Products • Enhanced Customer Footprint Strategic Rationale Potential Synergy Content Publishers Goal • Content protection Potential Synergy What We Offer • License protection to content providers to enable them to explore digital distribution • Complementary Products |
 © 2007 MVSN Corporation | Company Confidential 17 Next Steps |
 © 2007 MVSN Corporation | Company Confidential 18 Next Steps Deal expected to close by the second quarter of 2008 • Requires stockholder approvals and regulatory agency consents • Until closing, companies operate independently Integration planning underway • Small group meetings or 1-on-1 with many staff over next few weeks New organizational structure will be determined near the closing date In the meantime: • Continue working on great products, strengthening customer relationships, and driving the business forward • Your efforts during transition period will carry forward as we integrate Next Steps |
On Friday, December 7, 2007, Macrovision Corporation provided the following materials to its employees:
Macrovision Employee – Internal Only
FAQs
Q: What is the news?
A:Macrovision and Gemstar-TV Guide announced the two companies have signed a definitive agreement for Macrovision to acquire Gemstar-TV Guide in a cash and stock transaction. The aggregate value of the transaction to Gemstar-TV Guide stockholders, based on the closing price for the Macrovision stock on December 6, 2007, is approximately $2.8 billion. Together they will provide a broad set of customers (CE manufacturers, MSOs, DBS’s, content providers, portals, etc.) with the tools, services and technologies to allow consumers to discover, acquire, manage and enjoy content virtually anytime, anywhere and thus drive new revenue opportunities for their respective businesses.
The company, formerly known as Gemstar International Group Limited, was founded in 1992. It changed its name to Gemstar-TV Guide International, Inc. in 2000 and is based in Los Angeles. It is best known as the publisher of TV Guide Magazine.
Q. Why is Macrovision buying Gemstar-TV Guide?
A:The deal brings together two organizations with a shared vision for the future of the digital home and consumer experience; to enable content providers, device manufacturers and distribution channels with the platform, content and intellectual assets and services that will deliver to consumers an integrated and rich home digital media experience.
This acquisition will enable the combined company to offer solutions that have a transformative effect in the way consumers discover, acquire, manage and enjoy content. This transaction will help the combined company address the interoperability, content and integration challenges that have restricted the industry until today.
Q. Why is this acquisition good for Macrovision?
A. The acquisition enables the new organization to move faster in the goal to be a leading provider of tools, services, and content for the digital living room. Some specific areas of benefit include:
| • | Macrovision can enhance Gemstar-TV Guide’s market opportunity as well as integrate Macrovision’s platform with Gemstar-TV Guide’s guidance, improving the offerings to this market segment. |
| • | Integration of Gemstar-TV Guide’s data services with Macrovision’s recently announced pending acquisition of AMG can provide a more complete solution for the market. |
| • | Gemstar-TV Guide’s MSO and DBS customers will benefit from the integration of protection and standards-based connected platform with guidance technology. |
Macrovision Employee – Internal Only
FAQs
Q: Will Macrovision keep Gemstar-TV Guide businesses intact?
A: Macrovision will be conducting an in-depth analysis of the business between now and close. This process will help to determine the strategic direction for key businesses of both Macrovision and Gemstar-TV Guide after the deal is closed. As a result, a detailed integration plan will be created, and will be executed following the close of the deal. Many of you may be asked to participate in the integration planning process, as it will require efforts from both companies to make this a successful integration and successful company.
Q. Is the purchase of Gemstar-TV Guide solely motivated by Macrovision’s desire to access its patent portfolio, IP and licensing deals?
A:No, Macrovision’s motivation is to provide a broader set of solutions to content producers, distribution channels and device manufacturers to enable end users to discover, acquire, manage and enjoy their content virtually anytime, any place.
Q: When will the deal close?
A:The transaction is subject to customary closing conditions including regulatory review and stockholder approval of both companies and is expected to be completed by early second quarter of 2008.
Q. How much did Macrovision pay for Gemstar-TV Guide?
A. Macrovision has agreed to acquire all the outstanding shares of Gemstar-TV Guide for consideration having a value of approximately $2.8 billion.
The consideration for Gemstar-TV Guide shares will be comprised of 56 percent cash and 44 percent shares in the new holding company.
Q: Will the Macrovision’s headquarters be in Santa Clara?
A:The HQ will remain in Northern California. However no other facility decisions have been made at this time.
Q: How will the Gemstar- TV Guide’s executive team be integrated into Macrovision Corporation?
A: Fred Amoroso will be Chief Executive Officer and President of the combined company and James Budge will serve as Chief Financial Officer. The new Board of Directors will be comprised of four members to be designated by Macrovision and three members to be designated by Gemstar-TV Guide. Upon close of the transaction, Gemstar-TV Guide CEO Rich Battista and CFO Bedi Singh will be leaving the organization. Macrovision will carefully evaluate the management structure of the new organization and will make additional announcements as information becomes available.
Macrovision Employee – Internal Only
FAQs
Q. How does Gemstar-TVGuide fit into Macrovision’s vision?
A.Macrovision’s vision is to becomethe strategic partner for content producers across all types of media (including video, games, and information) distribution channels (e.g., MSO’s, DBS’s, portals) and device manufacturers that are navigating the transition from primarily physical to digital distribution models, specifically the digital home.
Macrovision and Gemstar-TV Guide bring together a unique combination of assets that will enable a broad set of partners the ability to enhance the consumer experience by providing the tools to discover, acquire, manage and enjoy content virtually anytime, anywhere and thus drive new revenue opportunities for their businesses.
The goal is to build upon and advance the capabilities of both companies and approach the market with a solution orientation.
The combined assets of the transaction will encompass:
| • | Guidance Technology – a leading interactive program guide (IPG) technology, intellectual property, as well as an extensive customer base including consumer electronics manufacturers, system operators, direct broadcast satellite broadcasters and online service providers. |
| • | Connected Services – Tools and infrastructure for the delivery of content and related services directly to end users for the improvement of a home media environment both through enhancing the experience and providing content delivery. Current examples include MyTVguide services (e.g., personalization, recommendations, ad serving, click stream analysis, notifications) and device registration. Future examples could be video delivery, internet radio and music services. |
| • | Data Services – a broad set of metadata describing television shows, music, movies, and video games, including editorial content, relationship/cross references (e.g., this song was in that movie, this singer also sang for that group). Additionally, the metadata encompasses images, clips, and samples. |
| • | Connected Platform – technologies embedded into devices enabling them to interoperate with other media-aware devices, resulting in an open environment for secure distribution of digital media and content services. Support key open standards such as DLNA and UPnP. |
| • | Content Protection – key technology and intellectual property for protecting analog and digital standard and high-definition video content. |
| • | Consumer Sites – consumer facing websites providing users among the most detailed information television, music, movie, and games available. |
Macrovision Employee – Internal Only
FAQs
Q. How will the acquisition affect my current Macrovision job responsibilities?
A. For the vast majority of the employees their job responsibilities and day-to-day work will remain the same. There may be some organizations that will experience a greater degree of integration across teams after the close of the transaction.
Q: Are layoffs anticipated at either company?
A:Macrovision will work on integrating the two organizations’ workforces as best as possible. No decisions will be made until Macrovision evaluates the business needs of the combined entity, during the transition process.
Q. What are the practicalities and the processes over the next months prior to the final acquisition date, e.g., do we operate as normal or do we adjust operations?
A. It is important, and a legal requirement, that Macrovision and the Gemstar-TV Guide teams continue to operate as independent organizations up to the close date of the transaction. However, during this period a tremendous amount of planning will be conducted between the two management teams to prepare for the close date and integration.
Communications/Branding
Q: How and when will this news be communicated to our customers and partners?
A:A customer letter will be posted on the Macrovision website and distributed and provide to key account managers to contact customers to handle concerns and questions.
Q. Do we have to keep anything about this announcement confidential?
A. All information that has been published and shared with external audiences is public information. Any information marked confidential should not be shared externally. If you have any doubts/questions, please check with your manager.
Q. What if we receive calls from outside of the company, what should we say?
A:If you are contacted by any member of the media or analyst community, please do not provide any comment or answer any questions. Please direct all calls to Carolyn Newburn, cnewburn@macrovision.com.
Q: How does this affect our plans for CES?
A:CES will be moving forward as planned.
Q: Does Macrovision intend to keep the Gemstar-TV Guide brand name intact?
A:The TV Guide brand is among the best known brands in the US, a strong publishing brand and a valuable franchise. Macrovision will be evaluating the future role of the brand, however, there are no plans at this time to eliminate or change the brand as associated with key entertainment properties.