United Video and Gemstar: The Evolution of Satellite Distribution and Program Guides
The landscape of modern television was shaped significantly by the innovations of United Video Satellite Group (UVSG) and its eventual evolution into Gemstar–TV Guide International. From the early days of microwave relays to the creation of the ubiquitous electronic program guide, these entities pioneered how media content and scheduling information reached millions of households.
The Rise of United Video Satellite Group
The origins of the company date back to 1965, when Gene Schneider founded a cable company in Tulsa, Oklahoma. Initially operating as GenCo and later LVO Cable under the ownership of the LVO Corporation, the entity adopted the name United Video in 1970 following the acquisition of a microwave-based TV relay operation. This operation served the Illinois towns of Ottawa, Streator, and Pontiac with signals from Chicago.
Leveraging their expertise in distributing WGN-TV via microwave, the company was selected to distribute WGN's signal nationwide via satellite uplink. On November 9, 1978, they began uplinking the signal from Monee, Illinois, to the Satcom-3 satellite. This success led to the national distribution of other major stations, including WPIX in New York, KTVT in Dallas, and KPLR in St. Louis. By 1980, the efficiency of satellite transmission rendered their older microwave systems obsolete.
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Diversification: Satellite Music and Data
In 1981, employee Al Stem noticed that the satellite bandwidth used for superstation uplinks had significant unused capacity. This observation led to the creation of the Satellite Music Network (SMN). The venture grew rapidly, reaching over 1,050 affiliates across nine formats. In January 1989, SMN was sold to Capital Cities/ABC Inc. for approximately $55 million. This sale eventually paved the way for the creation of SpaceCom, a company specializing in satellite data transmission for services like pagers.
The Birth of the Electronic Program Guide (EPG)
Another pivotal innovation launched in 1981 was the Electronic Program Guide (EPG). This system transmitted raw program listings from a central computer in Tulsa to local cable headends via a 2400 baud data stream on a WGN audio subcarrier. The local installations typically utilized Atari computers, such as the 130XE or 600XL, running from a 16 KB EPROM chip.
Viewers saw a computer-generated scrolling screen of listings, often accompanied by local radio or satellite music. The service saw massive growth, expanding from 5.3 million viewers in 1986 to 7 million in 1987. In April 1988, the service was rebranded as the Prevue Guide (and later the Prevue Channel in 1993), transitioning from Atari to Amiga-based systems.
Prevue eventually became more profitable than the superstation uplinks, leading UVSG to go public in 1993. By 1995, the company reported annual revenues of $400 million and employed 1,400 people.
Transition to Gemstar–TV Guide International
The company entered a new era on October 5, 1999, when Gemstar International Group Ltd.—founded by Henry Yuen, Daniel Kwoh, Louise Wannier, and Wilson Cho—purchased TV Guide, Inc. (the entity formed after UVSG acquired TV Guide magazine in 1998). This merger followed a legal battle over intellectual property rights for interactive program guides, specifically VCR Plus+ and TV Guide On Screen.
During the early 2000s, Gemstar expanded into the e-reader market by acquiring SoftBook and the Rocket eBook, leading to the release of the RCA eBook Reader. However, the company became embroiled in extensive patent litigation with set-top box manufacturers, most notably Scientific Atlanta, regarding the StarSight Telecast patent portfolio.
Financial Turmoil and Corporate Shifts
In 2002, Gemstar disclosed $108 million in uncollected revenue, primarily due to expired licensing agreements with Scientific Atlanta. During this period, News Corporation owner Rupert Murdoch gained control of the company after purchasing shares from Liberty Media. Jeff Shell replaced Henry Yuen as CEO in October 2002.
The company's market capitalization suffered a dramatic decline, falling from a peak of $20 billion in 2000 to just over $1 billion by 2005. In 2007, Gemstar acquired Aptiv Digital, the developer of the Passport interactive program guide software.
Acquisition and Legal Legacy
On December 7, 2007, Gemstar agreed to be acquired by Macrovision (which later became Rovi Corporation and is now Xperi Inc.) in a deal valued at approximately $2.8 billion. The transaction closed on May 2, 2008.
The legacy of Gemstar's patents continued to be a point of contention. In 2009 and 2011, the UK courts ruled in favor of Virgin Media, finding several Gemstar patents invalid and revoking them. Despite these setbacks, Rovi Corporation continued to license the intellectual property, including a 2010 deal with Sky for IPG patents.
Key Facts
- Founded: United Video Satellite Group was founded in 1978 in Tulsa, OK.
- First Satellite Uplink: WGN-TV began nationwide distribution via Satcom-3 on November 9, 1978.
- EPG Evolution: The Electronic Program Guide evolved into the Prevue Guide (1988) and Prevue Channel (1993).
- Major Sale: Satellite Music Network was sold to Capital Cities/ABC in 1989 for ~$55 million.
- Peak Valuation: Gemstar reached a market capitalization of $20 billion in 2000.
- Final Acquisition: Macrovision (now Xperi Inc.) acquired Gemstar in 2008 for ~$2.8 billion.
| Era/Entity | Key Innovation/Event | Significant Date |
|---|---|---|
| United Video | Nationwide WGN-TV Satellite Uplink | 1978 |
| UVSG | Launch of Satellite Music Network | 1981 |
| UVSG | Launch of Electronic Program Guide (EPG) | 1981 |
| Prevue Guide | Rebranding of EPG | 1988 |
| Gemstar-TV Guide | Merger of Gemstar and TV Guide, Inc. | 2000 |
| Rovi/Xperi | Acquisition of Gemstar | 2008 |
Frequently Asked Questions
What was the original purpose of the Electronic Program Guide?
The EPG was designed to send raw program listings for national, regional, and local broadcast stations to cable headends, where they were displayed as scrolling screens for home viewers.
Which hardware powered the early Prevue Guides?
The early guides utilized Atari computers, specifically models like the 130XE and 600XL, before transitioning to Amiga-based systems in later years.
How did the Satellite Music Network begin?
It was started in 1981 after employee Al Stem identified that there was significant unused satellite bandwidth available during the superstation uplinks.
Why did Gemstar's market value drop so significantly?
The decline from $20 billion to $1 billion was driven by continuing losses in the hundred-million-dollar range and charges related to shareholder litigation.
What happened to Gemstar's patents in the United Kingdom?
The London High Court and the Court of Appeal of England and Wales found several of Gemstar's patents to be invalid, ruling in favor of Virgin Media.