SONICblue revenue rises; is hit with PVR lawsuit
It was one of those "good news/bad news" weeks for SONICblue Inc. The good news was that the company's revenues rose 86 percent to $54.8 million versus the previous quarter. The bad news was that SONICblue's new Replay4000 personal video recorder came under legal scrutiny from a spate of television programmers.
More specifically, ABC, CBS, NBC and their corporate parents alleged in a lawsuit that ReplayTV's new line of PVRs violate copyright laws, and certain box features could give users of the equipment the ability to distribute digital, pristine copies of television shows to others via the Internet.
The plaintiffs also complained that ReplayTV4000 customers could watch shows "with all commercial advertising automatically deleted," which could impact network revenue models. However, SONICblue officials reportedly said the box does not delete commercials, but allows users to simply skip them.
The ReplayTV 4000 is a high-end PVR able to store as many as 320 hours of video and other digital media.
On the financial front, SONICblue said third quarter gross margins reached 15 percent, a 42-point boost over the previous quarter, helped in part by strong sales of the company's "Rio" line of MP3/CD players. The company also reported an operating loss of $17.7 million, or 20 cents per share, trimmed down from $38.3 million, or 47 cents per share, in the second quarter.