Sanford C. Bernstein & Co. Inc. analyst Craig Moffett suggested in a research note yesterday that the upholding of the earlier ruling may also pave the way "for the imminent complete disablement of as many as 8 million Dish Network DVRs... What is at stake is nothing less than their ability to continue to offer DVRs. And without DVRs... well, you can fill in the blank here, but it wouldn't be pretty."
If a commercial settlement is to follow, Moffett thinks guesses of licensing terms in the $1.00 to $2.25 per month range could be off the mark. TiVo's newfound leverage could produce a much higher settlement, he says.
How Dish might pay for that and make up the difference remains a big question. On Monday, Dish boss Charlie Ergen said the TiVo-related rulings would have an effect on the balance sheet, noting that he didn't think Dish had the "pricing power to pass on DVR costs [to subscribers]. That would affect our margin." (See Dish May Serve Rate Hikes .)
At this point, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , and DirecTV Group Inc. (NYSE: DTV) must feel some comfort in that they are playing ball with TiVo to a degree. Time Warner Cable Inc. (NYSE: TWC) has so far avoided TiVo's legal laser, but the DVR pioneer has already aimed it at Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), so we'll be interested to see if this latest judgment brings some of these folks back to the negotiation table. (See TiVo: AT&T and Verizon Won't Strike a Deal and TiVo Suit Targets AT&T & Verizon.)
— Jeff Baumgartner, Site Editor, Light Reading Cable