Analyst: Dish could lose billions

[EricBskiVT]

Not to start a panic, but surprised this Swanni story hasn't posted here yet:
Analyst: TiVo Could Cost Dish Network Billions
The official says the DVR patent lawsuit could be a crippler.
By Swanni
Washington, D.C. (June 4, 2008) -- Dish Network might lose billions of dollars over its DVR patent dispute with TiVo -- and lose subscribers as well.

That's the conclusion of a new report from Wall Street analyst Craig Moffett, as reported by Multichannel News.

TiVo sued Dish Network in 2004 for DVR patent infringement and a Texas jury in April 2006 found in TiVo's favor. (The lawsuit affects both SD and HD DVRs.)

The verdict has since been tied up in appeals court, but TiVo claims that Dish Network now owes it approximately $100 million in damages. Additionally, TiVo says Dish must disable all current HD and SD DVRs because of the patent infringement.

Dish filed suit last week in a Delaware court seeking to prove that its new DVR software does not infringe TiVo's patents. But the Texas court has scheduled a September 4 hearing on TiVo's call for a contempt citation against the satcaster.

“If Dish loses a current round of contempt litigation related to their alleged ‘work around,’ then the costs to Dish of disabling DVRs, settling with TiVo, or—worst of all—potentially engaging in a bidding war for the right to continue offering DVRs at all, could be in a worst case scenario in the billions… far higher than currently contemplated,” Moffett wrote in a research report issued yesterday, according to Multichannel News.

Moffett said investors have speculated that Dish will eventually concede and pay TiVo $1 per month, per subscriber as a DVR licensing fee.

But the analyst says a contempt order could ruin even that possibility.

“Even the option of settling the case for just $1 per month per subscriber may well have passed," Moffett wrote.

The analyst added that Dish will likely lose roughly $1.6 billion if it's ordered to disable its DVRs -- and possibly thousands of subscribers upset with losing their favorite recording devices.

[butzchan]

Bottom line...higher prices for the consumer.

[navychop]

Let us get real. No court is going to order Dish out of business. And that is the almost inevitable result of ordering all DVRs turned off. Any judge that did so would see a stay issued almost overnight. Might even get to the Supreme Court, but I doubt that very much. I also doubt that the feds would stand by and let it happen.

The press, especially certain parts of it, have a vested interest in stirring up excitement. Warranted or not. Sure, it could happen. And we could also be hit by a comet tomorrow.

[ClevelandRob]

The press, especially certain parts of it, have a vested interest in stirring up excitement. Warranted or not. Sure, it could happen. And we could also be hit by a comet tomorrow.

[philhu]

Let us get real. No court is going to order Dish out of business. And that is the almost inevitable result of ordering all DVRs turned off. Any judge that did so would see a stay issued almost overnight. Might even get to the Supreme Court, but I doubt that very much. I also doubt that the feds would stand by and let it happen.

The press, especially certain parts of it, have a vested interest in stirring up excitement. Warranted or not. Sure, it could happen. And we could also be hit by a comet tomorrow.

Yes, just like no court would order Dish to drop their out of area locals off their system. Hey, didn't a judge do that and force Dish to stop selling NY/LA locals, but Directv can?

I really do not think judges CARE about that sort of stuff. If Tivo is wronged, as far as the court sees it, then they WILL take action, and whatever remedy they think is appropriate WILL occur.

The longer Dish ticks off judges by filing frivilous lawsuits against Tivo and not even trying to make a payment settlement, the worse their punishment will be
and the more it will cost their subscribers.

My $0.02

[paja]

Just what our economy needs- Another business servicing millions of ppl and employing tens of thousands of workers- to be put out of business.

[navychop]

"Yes, just like no court would order Dish to drop their out of area locals off their system. Hey, didn't a judge do that and force Dish to stop selling NY/LA locals, but Directv can?"

"Distant Locals" is what the court ordered off, not locals. I presume that is what you refer to as "out of area locals." And it certainly did not present a threat to company viability. "Cruel and unusual punishment" can be extended to corporate entities, in that the punishment must fit the crime. Driving them out of business benefits no one.

Dish can sell NY/LA locals to people in the NY/LA areas.

[nmoulton]

Let's keep this in perspective: According to Yahoo Finance the market cap of Tivo is 765 million, the market cap of Echostar is 15.44 billion. E* would NEVER allow their DVRs to be shut off, they would simply buy and swallow up Tivo. They have the money to do so, and that would cost significantly less than shutting off all their DVRs. I think the E* strategy is to try to make Tivo bankrupt, or at least worth much less, and then eventually they will buy them for much less.

[fordpre]

The question that I have is if Dish is forced to disable the DVRs, would that put them into breach of contract? I understand that they can modify the channel lineup all they want, but I signed up for DISH due to the reviews I heard of their DVRs compared to DirectTV at the time.

Any ideas from the more legal types?

[Skyhi]

Yes, just like no court would order Dish to drop their out of area locals off their system. Hey, didn't a judge do that and force Dish to stop selling NY/LA locals, but Directv can?

I really do not think judges CARE about that sort of stuff. If Tivo is wronged, as far as the court sees it, then they WILL take action, and whatever remedy they think is appropriate WILL occur.

The longer Dish ticks off judges by filing frivilous lawsuits against Tivo and not even trying to make a payment settlement, the worse their punishment will be
and the more it will cost their subscribers.

My $0.02

+1

I have no idea about the facts/merits of the case, but a federal judge appointed for life will do as the law requires/allows.

If E* is in the wrong and the judge didn't award Tivo its proper remedy then this would set a dangerous precedent which could ultimately encourage large companies to "steal" the intellectual property of smaller companies.

Having said this, DVRs will not be shut off....worst case scenario = Tivo making off like bandits with big $$$ licensing fees from E*.