Hanging over the shares of Dish Network (DISH) are the possibility that the company could be ordered to shut off the DVR functionality in its set-top boxes as a result of the TiVo (TIVO) patent litigation against the company.
In a conference call with the Street today to discuss March quarter results, Dish CEO Charlie Ergen sounded surprisingly conciliatory; it makes you wonder if they will soon agree to pay a royalty to TiVo to settle the litigation.
“We’ve always said that it seems like we should be working together with TiVo,” he said on the call, according to a preliminary transcript from Thomson StreetEvents. “We certainly as we got to know them we have a lot of respect for what they’ve done. They have done very well in the litigation process with us and this has always been a case really about an honest disagreement on how our DVRs work. There’s never been anything personal about it.”
Ergen asserted on the call that a settlement is in the best interest of both companies. “We are joined at the hip with TiVo in a sense that…we booked $30 million for one quarter [in potential royalties to TiVo] so that’s over $100 million just for the year on average in licensing fees for TiVo which is materially more than they get with the rest of the entire industry,” he said. “So we are joined at the hip in the sense that if we don’t get a deal done, those fees will go away for them and obviously we’ll lose customers and so it reminds me a lot of our programming negotiation, where you both need each other.”
Added Ergen: “I don’t think you should assume that we will get a deal done,” but adding “I don’t think you should assume that the courts are going to rule in our favor,� but there is a logic to us working together.”
Collins Stewart analyst Thomas Eagan writes today that he thinks a deal could be announced within a week. He thinks DISH will agree to pay $3.50 to $4 a month to TiVo for a license. Stay tuned.
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