SourceGuide Gets Boston Carriage

Cable World, Sept 11, 2000 by K.C. Neel

Source Media signed up its first non-Insight Communications affiliate last week when Cablevision Systems agreed to carry Source Media's digital interactive guide in its soon-to-be-sold Boston property.

SourceGuide will be available to 200,000 Cablevision customers as the MSO launches digital services in the rebuilt portions of the Boston system. Cablevision is in the middle of a $300-million rebuild of that system. However, Cablevision won't see the finished product because AT&T Broadband has agreed to buy the system in a deal that's expected to close either late this year or early next year.

Source Media and Cablevision had been in talks about a carriage deal for months before making the announcement last week, says Stephen Palley, Source Media's CEO. Talks with the MSO predated Cablevision's deal to sell the system to AT&T. Palley hopes the deal in Boston leads to additional contracts with Cablevision, which will continue to operate its metropolitan New York operations, as well as AT&T.

However, AT&T has extensive digital guide contracts with Gemstar/TV Guide, and Cablevision is still working out the details of its digital service, which will be driven by Sony set-tops. A Cablevision spokesman says the MSO plans to launch a pilot test of the Sony boxes later this year, and no decisions on vendors have been made public yet. AT&T executives declined to comment on the Source Media deal in Boston.

"We hope to pick up the New York market with Cablevision," Palley says optimistically. "We've talked to Cablevision and Sony, but we have no deal yet. (Signing a deal in) Boston is a good sign, though."

The company also hopes to sign on some AT&T markets, although Palley acknowledges the MSO is locked into a long-term carriage deal with Gemstar/TV Guide in its TCI systems.

Source Media is available in 25,000 Insight Communications homes, Palley says, but the MSO expects to launch digital in 250,000 homes by year's-end.

Insight owns a significant chunk of Source, however the MSO's affiliation deal came before it invested in the guide company, Palley says.

"We were trying to do a deal with TV Guide last year, and when that fell apart, Insight stepped up to the plate," Palley says.

Source Media sued TV Guide in August 1999 for a $60 million breach of contract after the merger talks between the two guide companies fell apart. At the same time, TV Guide accused Source Media of improperly transferring Canadian patents for its interactive guide technology.

The companies settled the suits out of court late last year. While Palley says he'd like to avoid the courts, the company could sue the TV Gateway consortium if the group's technology violates Source Media's patents, Palley says.

"Our technology is server-based, and so is WorldGate's," Palley says. "Other than that, I don't know much about it."

When the TV Gateway group was announced in July, he said the company will look closely at the technology to make sure there are no patent infringements and noted that while he'd rather avoid litigation, he wouldn't be shy about suing if there is any violation.

He also downplays the TV Gateway announcement. "There have been no carriage agreements announced with that consortium," he says. "I think the MSOs will have carriage deals with a number of guide providers, and we hope to be one of the them. We're talking to everyone. Operators today are very determined to deliver digital video services to all their customers, and interactive digital guides are pivotal."