Comcast Corp., the biggest U.S. cable television provider, said it would form a joint venture with Gemstar-TV Guide International Inc. to develop on-screen cable TV program guides.
Comcast will pay Gemstar $250 million to license its program-guide technology and rights to the TV Guide name, the two companies said in a statement.
The joint venture will give Comcast more control over development of on-screen program guides that consumers use to program digital video recorders and order services such as video-on-demand, the Philadelphia company said.
Hollywood-based Gemstar will own a 49% stake in the venture and have the right to offer its products to other cable and satellite TV providers.
“The interface is critically important,” said Rob Sanderson, an analyst with American Technology Research in San Francisco. “That’s why Comcast wants to own a piece of it and control it.” Sanderson rates shares of Comcast “buy” and said that he doesn’t own the stock.
Jeff Shell, chief executive of Gemstar, said having the largest cable operator as a partner would make it easier to sell the guide to the rest of the industry and would clear up any misconceptions about Gemstar’s commitment to cable.
Gemstar is owned by News Corp., which in December took control of cable rival DirecTV, the nation’s leading satellite TV provider.
Comcast’s Class A common shares rose 68 cents to $33.93 on Nasdaq. Shares of Gemstar rose 8 cents to $6.17, also on Nasdaq.
Bloomberg News was used in compiling this report.