WorldGate Loses TVGateway

In a significant blow to WorldGate Communications Corp., the TVGateway interactive program guide consortium has been restructured as an independent company.

WorldGate had managed and derived most of its revenues from TVGateway, which was formed by WorldGate, Adelphia Communications Corp., Charter Communications Inc., Cox Communications Inc. and Comcast Corp. in 2000. The founders created the company with the idea of bringing some competition to Gemstar-TV Guide International Inc., which dominates the IPG market.

Revenue from TVGateway — which is deployed on a handful of Charter and Comcast systems, as well as those owned by smaller operators — accounted for 83 percent of WorldGate's revenues during the first nine months of 2002, according to WorldGate financial filings.

WorldGate officials didn't return calls last week.

TVGateway's MSO backers last week said they're providing more financing to TVGateway, but declined to detail the investment. They also named a new CEO, cable veteran Bill McCall, who actually took over as the top TVGateway manager last June.

TVGateway's new management team includes former Navic Networks Inc. marketer Terri Swartz, who was named vice president of product and marketing. Former Callahan Associates International executive Jonathan Chambers was named general counsel; former WorldGate executive Bob Kelly was named vice president of operations; former Diva Systems Corp. and Home Box Office Inc, executive John Bell was named senior director of affiliate relations and sales; and former Katalyst and Houlihan Lokey Howard & Zukin executive Chad Lucien was named director of strategic development.

Though TVGateway's MSO partners have contracts with Gemstar that mandate that the majority of their subscribers receive TV Guide Interactive, McCall said he still sees room for growth.

"There's plenty of business available for a company like TVGateway," he said.