Technology StocksOPTV - Open TV

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To: Larry Kagan who wrote (103)5/3/2002 7:55:52 AM
From: arnold silver
   of 143
I am sick over it,I bot in at 35 and sold at 5.
Lost over 40k.

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To: arnold silver who wrote (104)5/3/2002 11:11:33 AM
From: Larry Kagan
   of 143
I definitely feel your pain. I've bought and sold several lots since the IPO but overall I'm down about 15K.
The troubles with the European cable companies have done us in, but I believe it will be a matter of time before the situation rights itself.
good luck,

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To: westpacific who started this subject5/18/2002 11:28:57 AM
From: Mkilloran
   of 143
Liberty bets big on iTV with OpenTV deal

Acquirer: Liberty Media
Target: OpenTV
Sector: Interactive TV software and services
Deal value: $185 million
Date announced: May 8, 2002
Closing date: 60-90 days

Media mogul John Malone, acting through Liberty Media (NYSE: L), has now added OpenTV (Nasdaq: OPTV) to his portfolio of investments, despite the fact interactive-TV companies are not in vogue at the moment. Liberty purchased a controlling stake in the iTV software and services provider from MIH (Nasdaq: MIHL) for $185 million, and is also in talks to purchase the stake in iTV services firm ACTV (Nasdaq: IATV) that it doesn't already own.

Liberty has restated its belief in the sector by creating a new subsidiary that will act as an investment vehicle for the firm's interests in the iTV sector. The subsidiary will be called Liberty Broadband Interactive Television ('LBIT'), and will be the repository for Liberty's shares in OpenTV and ACTV. "for whatever that's worth" The subsidiary will be headed by Peter Boylan, who recently stepped down as head of Gemstar TV Guide (Nasdaq: GMST).

No changes in OpenTV's management are expected. The company is currently headed by CEO James Ackerman.


Interactive TV has, on the whole, been the victim of a lack of interest by network operators in 2002. The middleware companies, such as OpenTV, have all had to lay off employees – even Microsoft (Nasdaq: MSFT) has been forced to restructure and refocus its efforts. Deployments of software and applications have been delayed as operators struggle to restructure their debt loads, prime examples of which are NTL (NYSE: NLI), Telewest (Nasdaq: TWSTY), and UPC (Nasdaq: UPCOY) in Europe, or their merger, namely AT&T (NYSE: T) and Comcast (Nasdaq: CMCSK) in the US.

OpenTV is in fair shape, all things considered. The company hasn't made demonstrable progress with US cable operators, but does have its software installed on four million EchoStar (Nasdaq: DISH) set-tops. Worldwide, its middleware is installed in over 24 million set-tops. Liberty cited the company's clean balance sheet (meaning, it has no long-term debt on the books) and $175 million in cash as positive attributes when considering the deal. Another plus, according to Boylan, is OpenTV's intellectual property portfolio.


Microsoft, Liberate Technologies (Nasdaq: LBRT) and Canal Plus Technologies (NYSE: V) are the main companies OpenTV has been battling in the iTV software market. To the extent that OpenTV has moved to provide applications for network operators via its Static 2358 subsidiary, it also competes against companies like Two Way TV, GoldPocket and as well as numerous other smaller iTV application developers.

Sales and marketing

Boylan said LBIT hasn't had discussions with potential partners such as News Corp (NYSE: NWS) about working on bringing OpenTV technology to more platforms and programming. Liberty has stakes in News Corp, Telewest, and UPC among other companies that operate distribution platforms. It also has an ownership stake in direct sales firm QVC along with Comcast. Executives said that those companies are always free to make their own decisions about which technology to use, but obviously the goal of the deal is to grease the wheels for OpenTV. It is not expected that the deal will have a measurable impact on OpenTV's bottom line until 2003 at earliest.

Deal Details

Liberty estimates the total purchase price for the shares it will buy using a mixture of cash and stock from MIH will be $185 million. Since Liberty is acquiring a 43% interest in OpenTV in conjunction with increasing its total voting interest by 87%, it's difficult to determine what the premium is. However, excluding the voting interest, Liberty would be buying its share of OpenTV at a premium of around 67% based on the May 7 closing price. OpenTV has consistently traded at a hefty discount to rival Liberate, despite the fact that revenues are comparable. Both companies operate at a loss, although Liberate has managed to staunch the red ink more effectively than OpenTV.

Liberty Media acquired 365,460 Class A shares and 30,206,154 Class B shares of OpenTV from MIH. At least 21% of the $185 million will be cash but the remainder can be in then form of stock or cash. Gary Howard, Liberty Media's executive vice president and COO, said Liberty would prefer not to use Liberty stock only for the acquisition, and has plenty of cash to cover the balance. Liberty Media already had an existing position in OpenTV; in total, its holds a 46% stake in the company and 89% of the total voting interest. The deal, which requires regulatory approval, is expected to close in 60 to 90 days.

As for ACTV, Liberty is in talks to purchase those outstanding shares of the technology and service provider that it does not own for $2 per share. Liberty could use publicly traded stock it owns in affiliated ventures as part of the equation. The two parties have set a 65-day exclusive negotiating period in which to settle the terms. Liberty currently has a 16% stake in the venture; other major stakeholders include Motorola (NYSE: MOT).

Deal rationale

As Liberty's Howard explained it, the time is right to invest in iTV. There's been a 'sorting out' in the industry, and companies are all priced reasonably compared with just two years ago. Howard said Liberty is still a believer in iTV based on what it sees happening oversees. Put together the two developments, and ''[you] start to say 'maybe now is the time try to get in and try to enhance the content side of this space.'' What Howard said is required, however, is strategic investments in the sector, combined with an ability to leverage Liberty's numerous relationships with programmers and network operators.

Liberty's strategy will, in theory, help OpenTV to grow its business in a way that wasn't possible before. However, the sector has struggled as network operators delay their rollouts of advanced interactive services in the US and curtail efforts abroad. To his credit, Liberty's Howard does admit that its investment is a long-term play.

Acquisitions strategy

Apart from OpenTV and ACTV, LBIT will be seeking other firms to invest in or purchase. OpenTV may be the main venue for those acquisitions, since it has stock and cash it can use to make strategic purchases, but a public offering of LBIT itself down the road would give the company more fodder for acquisitions.

LBIT will primarily be looking at technology that is 'fundamental' to the creation and distribution of interactive content. Companies with strong patent portfolios are of primary interest, judging by the statements of Boylan and Howard. Furthermore, companies without a lot of debt on the balance sheet are relatively more attractive. Either public or private companies are being considered, as long as they are outside of the interactive guide space, which LBIT regards as being owned by Gemstar.

Prospective targets

LBIT's initial focus on enhancing advertisements and providing TV-based commerce functions to network operators might translate into an interest in companies providing technology such as targeted ad delivery and reporting tools, a network infrastructure for capturing viewer responses, and applications development in these areas.

OpenTV recently teamed with Predictive Networks for ad management software; Predictive's technology might make it a good strategic fit for LBIT's vision. Wink Communications (Nasdaq: WINK) has been shopped around and might make an interesting addition to LBIT's portfolio, given its extensive relationships with the ad agencies and its distribution deals with DirecTV and Charter Communications (Nasdaq: CHTR). Princeton Video Image is seeking financing at the moment, and would be an interesting fit because of the technologies it has developed that allow advertisers to insert images into video streams; in effect, unique ads are generated on the fly and sent to individuals without any change in the preproduction processes.

Portland, Oregon-based Ensequence is working on technology for economically distributing content to multiple iTV platforms, and would also prove an interesting technology fit as OpenTV seeks to move further into applications development. Ensequence isn't in need of cash at the moment, though, and its interest in being acquired has not been determined.


It would be easy for supporters of iTV to get too excited about the ability of Liberty to single-handedly change the prospect for an entire market anytime soon. Network operators are still hesitant to spend money on technology that has an uncertain ROI in this economic environment.

That being said, the deal is a significant vote of confidence that iTV will someday be an essential tool for increasing operator revenues. Liberty is confident that it can move that date forward by leveraging its extensive relationships (i.e., investments) with programmers and network operators. Why will Liberty succeed where Microsoft failed after spending $10 billion? As Boylan puts it, LBIT will be unencumbered by existing business models and has the flexibility to find relationships that are ''truly mutually beneficial.'' Hypothetically speaking, even where Liberate wins deals with network operators as a middleware provider, OpenTV can still provide interactive applications that run on that software. Liberty's influence will improve its position in the US in that regard.

We fully expect that a new round of consolidation and strategic acquisitions will eventually get underway as other companies analyze the impact of OpenTV's new position on their product roadmap.

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To: Mkilloran who wrote (106)8/28/2002 1:04:28 AM
From: Rob Terrell
   of 143
This looks good here trading below cash value. Liberty Media should make it work.

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To: westpacific who started this subject7/9/2003 10:38:09 AM
From: Larry Kagan
   of 143
How 'bout a warm welcome for all the IATV refugees!!
....Go OPTV!
regards to the longs,

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To: Larry Kagan who wrote (108)8/2/2003 3:32:38 PM
From: Rob Terrell
   of 143
What about this increase in volume. Haven't seen this in over 3 years

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To: Rob Terrell who wrote (109)8/20/2003 8:59:00 PM
From: Madharry
   of 143
How about this kind of volume?

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To: Madharry who wrote (110)8/22/2003 9:57:57 AM
From: Larry Kagan
   of 143
Guys, there's good stuff brewing here....
Things looking up in this space with the recent acquisitions, the dominant market position of Liberty Media, the deal with Sony...
Good luck to the longs,

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To: Mkilloran who wrote (106)8/23/2003 11:22:54 AM
From: Smiling Bob
   of 143
Doing some DD on OPTV
Looks like they've expanded to 47 million STB from 24 million in May, 2002

About OpenTV

One of the world’s leading interactive television companies, OpenTV provides a comprehensive suite of technology, content, games, tools, applications, and professional services that enables cable and satellite network operators in over 70 countries to deliver and manage iTV services on all major digital TV platforms. OpenTV’s technology platforms enable interactive television to over 47 million set top boxes on 43 different networks worldwide; 20 million in the U.S. alone. OpenTV has developed over 300 games that are currently available to over 12 million subscribers on 7 networks. OpenTV has developed 24 applications in nine languages. OpenTV has ported its various technologies to 36 set top box manufacturers around the world. OpenTV holds 944 issued and pending patents with over 38,000 claims including 307 issued patents worldwide, 76 of which are U.S. issued patents. OpenTV has corporate offices in San Francisco, California and Tulsa, Oklahoma, and regional offices in the United States, Europe and Asia/Pacific. For more information, please visit

© 2003 OpenTV, Inc. All rights reserved. OpenTV and the OpenTV logo are trademarks or registered trademarks of OpenTV, Inc. in the United States and other countries. All other trademarks are the property of their respective owners.

All OpenTV products and services may not be available in all geographic areas.

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To: Smiling Bob who wrote (112)8/23/2003 12:24:34 PM
From: Smiling Bob
   of 143
From OPTV conference call

From J. Ackerman, CEO

Great, thank you, Craig.

As outlined by Craig, OpenTV’s restructuring initiatives have begun to bear fruit in the form of a significant drop in quarterly losses and cash burn.

OpenTV has now completed the acquisition of two public companies announced last year. As a result of these acquisitions, the combined workforce has been reduced by 357 people and our total employment stands at 411 employees worldwide. Of this, approximately 286 are engineers, supporting our customers and technologies worldwide.

We have also completed our efforts to consolidate our Bay Area operations and now have the former OpenTV and Wink headquarters under one roof here in San Francisco. We will continue to seek to operate the Company as efficiently and as smartly as possible.

Lastly, as previously indicated, we continue to our plans to divest non-strategic assets. To this end, we are in the process of selling ACTV’s eSchool business, which includes approximately 35 employees.

A year ago this month, Liberty Media completed its acquisition of the control stake in OpenTV. Since then we have initiated a major restructuring of our global operations to better align our expense structure with the realities of revenue in iTV today.

As part of this effort, we have closed over ten offices worldwide and now operate our business from approximately ten locations in seven countries, to more efficiently serve our global customer base.

It is said that a three-strand cord is not easily broken. We believe these three companies, OpenTV, Wink and ACTV, are stronger together than they ever were individually.


Exhibit 99.2

Page 5

Today OpenTV is the largest enabler of interactive television in the world. As of June 30, television viewers in over 70 countries can interact through their television sets via nearly 50 million digital set-top boxes empowered by OpenTV’s various technology platforms.

Nearly 50 network operators, including digital cable, satellite and terrestrial platforms, distribute these interactive television services globally.

Our games channel, PlayJam, is available to over 12 million subscribers through seven network operators. Our library of games, many in both English and French, is now approximately 300 games strong.

Further, we have developed applications for clients throughout the world, that include, for example, news, weather, sports, soccer, football, traffic, horoscope, lottery, finance, the list goes on.

Focusing on the U.S. market specifically for a moment, OpenTV’s technology platforms enable more than 20 million digital cable and satellite set-top boxes.

Today for example, U.S. TV viewers are able to participate in quizzes while watching episodes of Trading Spaces on The Learning Channel. They’re able to look up the weather of hundreds of cities on demand with just the push of a few buttons on the remote control. Some are playing games, checking listings for movies, buying a CD or interacting with a commercial.

We are cautiously optimistic and hopeful we will be able to broaden this technology and we are out selling network operators and programmers our new business model for pro sync (program synchronous iTV) in both full-motion video and advertising.

Consumers ultimately sit down to watch TV and we believe that content- sensitive pro sync interactivity, inserted and developed in the creative process itself, by the creative community, will provide consumers with a very compelling experience. Today networks like Discovery, ABC Television, Bloomberg and Turner, are creating compelling pro sync content that is attracting top tier brand advertisers.

It is not uncommon today for specific programs to see 20-40% of viewers in homes with our pro sync technology, interact with the interactive content within that program.

In today’s multi-channel environment, it’s becoming increasingly difficult for advertisers to target audiences, and when they do, to effectively get the message across. Today our enhanced TV and interactive advertising platform business, via


Exhibit 99.2

Page 6

Wink, enables advertisers like Ford, Coca Cola, P&G, Wal-mart, to interactively enable their brand advertising. Whether it is to get a sample of a product in to the hands of a targeted consumer or to generate qualifies leads for a new car, interactive advertising is allowing brand managers to reach their consumers more effectively.

But that is only part of the solution, connecting with consumers effectively is important, but it is equally important to reach them efficiently, by seeking to eliminate the tonnage problem. You see, most television advertising is seen by a high percentage of viewers who do not meet the target demographic being sought for that product or brand. Advertisers are looking for ways to better reach their specific targeted audiences. In other words, they are looking for addressable advertising.

OpenTV’s SpotOn technology platform is being trialed with Comcast today at their Aurora office in Denver. The trial is reaching nearly 15 thousand Comcast subs in that franchise. Participating with us in the trial are networks ESPN, Discovery, Lifetime and TBS, as well as advertisers General Motors, Coca Cola, Johnson & Johnson, U.S. Army and Home Depot. And these advertisers are represented by major agencies like Starcom and McCann-Erickson.

What SpotOn does, is to seamlessly switch between multiple adds during the same commercial break. This allows networks to offer one advertiser the opportunity to present say, three or four different products, each sent to specific subscribers, based on demographic profile, or alternatively, to sell that one commercial break to different advertisers seeking unique demographic segments. Either way, the advertisers are able to reach the exact audience targeted, making the ad buy more efficient, while the programmer is able to charge a higher CPM, meaning costs per thousand, which is how advertising is generally sold, per spot.

For sake of example, ESPN might be broadcasting a Cowboys versus Redskins game with Ford as a major advertiser. Watching the game are both men and women, young and old, single and married, with kids in home and without and a broad range of income levels, etc. With SpotOn, ESPN is able to offer Ford the opportunity to present commercials for Mustang, Explorer, Expedition and Taurus to their specific target audiences within the same 30 second commercial break.

Imagine, when you combine the two together with OpenTV’s global reach, advertisers will be able to efficiently reach their specific target audiences while connecting with them directly through interactivity. For the cable and satellite operators, these platforms present an opportunity to create uncapped value through their local avails across nearly all networks that carry it. Using Ford, and the Ford example on ESPN, run within a local avail, each one of the addressable


Exhibit 99.2

Page 7

commercials for Mustang and the Explorer, etc., can be tagged with an interactive call to action. Reviewers can request the local dealer in their community contact them directly to arrange a test drive.

Good tools for ad trafficking and billing are extremely important as well. We believe we have the most advanced ad trafficking and billing system available today in our Advision product. Advision already supports a few systems at each of Comcast, Cox and Time Warner Cable. We will seek, over time, to increase the distribution of this product, as well as all of our platform products.

When we dream about the future, on-demand content, time-shifted content, addressability, any interactivity, will all fundamentally change the old rules of how we receive marketing messages and how TV advertising is bought and sold.

Having a state of the art ad trafficking and billing solution that addresses these issues and provides the network operators with the ability to handle and charge for this capability is essential. We think we have the best solution in the industry.

Lastly, advertisers need good research and data to better plan their campaigns and measure consumer response to new products and special offers. To this end, OpenTV has started a new research division to help us better standardize and market our research to the advertising, program network and operator communities. As a result of our technologies, we have the ability to provide our clients and partners with excellent quantitative information of what’s really happening and what’s really being used.

Combined, these three companies, that are all now part of OpenTV, allow us to be a world leader in one; pro sync enhanced TV and advertising, two; addressable advertising and trafficking, three; middleware and digital network technologies, and four; the development and operation of interactive TV applications.

We believe the complete product suite of OpenTV gives operators, programmers and advertisers the “best of breed” of technology platforms to enable advanced forms of content, enhance programming and interactive and addressable advertising.

We bring global reach and thus scale economics to our partners. We bring knowledge and experience to assist programmers, operators and advertisers on how to effectively use iTV to improve their businesses. And, we bring the added benefit of being able to stand behind our products with a patent portfolio of 307 patents issued worldwide. This includes 76 patents issued in the U.S. alone.


Exhibit 99.2

Page 8

Last, but not least, we have a very significant research and development organization. And have a pioneering and important intellectual property portfolio that covers key areas including but not limited to, managing thin-client set-top boxes, how to get data in to and out of set-top boxes from cable and satellite networks. How to either push or pull information to the set-top boxes. How to deal with transaction processing and various pro sync activities. How to support addressable advertising and seamless switching.

Our substantial intellectual property portfolio allows us to stand behind the products we bring to our customers.

Let me give you more detail around our patents. As a result of the two acquisitions, we now have a very significant and important patent portfolio that includes over 900 issued and pending patents worldwide, with over 38,000 claims. The issued patents worldwide is the 307 number I mentioned, and these come with 8,000 claims. Then again, as I mentioned before, 76 of these patents are issued in the U.S.

Pete and I have been spending a lot of time on the road recently with program networks and the cable and satellite operators. We believe from these meetings, there is real demand for our products and a general belief that iTV can play an important role in increasing customer satisfaction, reducing subscriber churn and opening new revenue streams for all involved in bringing iTV to the market.

There is still a lot of work to be done before we can claim victory, but we believe these three companies combined are all well positioned for success. We believe that iTV has finally arrived. And evidence around the world continues to support this belief.

Just yesterday, OpenTV customer, British Sky Broadcasting announced their fiscal year-end results. Interactive revenues were up 17% year-on-year, while revenue from interactive advertising was up 54% year-on-year. Today, Sky generates a total approximately $50 per sub per annum in ARPU from iTV. That’s revenue per subscriber services, and that’s across 6.8 million DBS subscribers.

Now their platform of course is utilizing a telco return path, as opposed to an always-on, two-way cable back channel. Betting still represents 50% of all revenues generated by Sky from iTV and approximately 12 million bets were placed through the TV set on Sky in just the last twelve months.

We too are looking to expand our own involvement in the area of interactive gambling and games. By exploring fixed odds games and betting, it’s our intent


Exhibit 99.2

Page 9

in the short-term, to add fixed odds games to our own PlayJam games channel where regulations allow. In addition, and consistent with our longer-term strategy outlined last year, we’re considering an acquisition in the interactive gaming space, which we will report on in more detail in due course.

We spent a lot of time over the last year acquiring the necessary pieces of a puzzle that includes technology and intellectual property that should allow us to establish a leadership position in pro sync and addressable advertising, in addition to the leading position we have in middleware, application and games at OpenTV.

We are now intensely focused on operating, integrating and completing the restructuring of these three companies. We continue to expand and build our talents at senior management team and plan to make some additional announcements shortly in this regard. As I stated before, I believe, we’re all well positioned for growth.

In closing, when you take a look at our global business, technology footprint, intellectual property, product offering and geographically distributed customer support network, you will realize that we are substantially ahead of our competitors in virtually every measure. Install base of set-top boxes, number of network customers, number of games developed and played, number of applications written and developed, number of languages supported, number of tools and services offered, number of set-top boxes supported to our various technologies, depth of our partner program, etc. etc.

Last but not least, we truly look forward to the possibility of expanding our relationship with Liberty Media Corporation affiliates as they begin or continue, to offer iTV products, services and technology to their customer base. We fully appreciate and realize, we can’t control the capital markets, nor can we control investor interest in iTV. It is our belief that these will develop over time, as people better understand the future of iTV.

We thank you for your continued support. With that, let’s turn the call over to questions. Operator?

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