Form 10-K

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act. Yes ¨ No þ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant was approximately $1,528,684,862 as of June 30, 2008, based upon the closing price on the NASDAQ Global Select Market reported for such date. This calculation does not reflect a determination that certain persons are affiliates of the Registrant for any other purpose. The number of shares outstanding of the Registrant’s Common Stock on February 18, 2009, was 100,970,031 shares.

Discussions of some of the matters contained in this Annual Report on Form 10-K for Macrovision Solutions Corporation (the “Company,” “we” or “us”) may constitute forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and as such, may involve risks and uncertainties. Some of these discussions are contained under the captions “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have based these forward-looking statements on our current expectations and projections about future events or future financial performance, which include implementing our business strategy, developing and introducing new technologies, obtaining, maintaining and expanding market acceptance of the technologies we offer, and competition in our markets.

In some cases, you can identify these forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “future,” “predict,” “potential,” “intend,” or “continue,” and similar expressions. These statements are based on the beliefs and assumptions of our management and on information currently available to our management. Our actual results, performance and achievements may differ materially from the results, performance and achievements expressed or implied in such forward-looking statements. For a discussion of some of the factors that might cause such a difference, see “Item 1A. – Risk Factors” and elsewhere in this Form 10-K. We specifically disclaim any obligation to update such forward-looking statements.

The Company’s continuing operations provide a broad set of solutions that enable businesses to protect, enable and distribute their digital goods to consumers and allows consumers the ability to discover and manage digital media across multiple channels. Our offerings include interactive program guides (IPGs), embedded licensing technologies, media recognition technologies and licensing of our extensive database of descriptive information about television, movie, music and game content and anti-piracy and content protection technologies and services. In addition to offering Company developed IPGs, our customers may also license our patents and deploy their own IPG or a third party IPG. Our solutions are deployed by companies in the entertainment, consumer electronics (CE), cable and satellite, and online distribution markets to solve industry-specific challenges and bring greater value to their customers.

On December 6, 2007, Macrovision Corporation and Gemstar-TV Guide International, Inc. (“Gemstar”) entered into an agreement for Macrovision Corporation to acquire Gemstar in a cash and stock transaction. Upon consummation of this transaction on May 2, 2008, Macrovision Solutions Corporation, a Delaware corporation founded in 2007, assumed ownership of both Gemstar and Macrovision Corporation. The Company’s results of operations include the operations of Gemstar from May 2, 2008, forward. The Company acquired Gemstar to increase its product offerings and believes the combined Company’s complementary solutions will lead to increased market opportunity and an expanded customer base.

On April 1, 2008, the Company closed the sale of its software and games businesses (hereafter referred to as “Software” and “Games”, respectively). In the fourth quarter of 2008, the Company closed the sale of its TV Guide Magazine and RightCommerce (also known as “eMeta”) businesses. On January 27, 2009, the Company closed the sale of its TVG Network business. The Company currently expects to close the sale of its TV Guide Network and TV Guide Online businesses in the first quarter of 2009. The results of operations and cash flows of Software, Games, TV Guide Magazine, TV Guide Network, TV Guide Online, TVG Network and eMeta have been classified as discontinued operations for all periods presented.

The entertainment media market is experiencing a major transformation from analog to digital content. The design, distribution, protection and consumption of all forms of digital content and software are continuing to experience an unprecedented amount of change. The expansion of network bandwidth, increased availability of devices that allow people to enjoy digital content, availability of digital content, and increased mobility are all helping to accelerate the market shift. As part of this change, consumers are demanding high-quality digital content in many formats and places. They want to easily access and discover content (music, photos, and programming) and enjoy it where they want and when they want.

Users are also seeking flexible means by which to legally acquire and add content to their digital libraries permanently or for a period of time and want to be able to enjoy that content in numerous locations on different devices. No matter what content consumers desire or are enjoying, video content remains key. New devices and services are continually being created that bring video content to consumers. These devices require the ability to provide information identifying what is available to the viewer in broadcast television (TV listings), stored or packaged video, and video on demand (VOD). We refer to providing this information as “guidance”. However, the current home media device infrastructure is very complex. Setting up such an environment requires integrating numerous devices, a deep understanding of interoperability of media formats and creation of mechanisms for managing and enjoying content. The alternative is to purchase products from a single vendor and sacrifice the ability to integrate all types of media into many devices or have many devices operating in silos, significantly limiting the mobility and flexibility consumers want.

These changes are impacting every part of the entertainment supply chain, from content producers, to distribution channels and consumption device manufacturers, and causing them each to reevaluate their business models. In the case of content producers, the industry shift to digital media, PC-based entertainment platforms, digital portable devices, networked devices, and Internet downloads leaves them vulnerable to unauthorized use of their content. Inexpensive, easy-to-use in-home copying devices, such as VCRs, CD and DVD recorders, and PC-based hard drive recorders, enable consumers to make unauthorized copies of video, audio and software content. Content owners lose billions of dollars every year to casual copying and professional or bootleg piracy and Internet/peer-to-peer (P2P) piracy. As technological advances facilitate digital downloads and digital copying, motion picture studios, music labels, cable television and program distributors have become more concerned with protecting their intellectual property.

Distribution channels, such as cable and satellite operators, web portals and retailers, and others are all seeking ways to best retain their competitive advantage in a digital entertainment world. They are requiring highly customizable solutions that aid the consumer experience, such as additional data about the digital content, while still allowing the distribution channel to retain its unique identity.

The markets for CE manufacturers are in major flux. Their customers are demanding capabilities to interact with broad ranges of media, not just viewing content that is on or broadcast to the device. This functionality requires that extensive software now be embedded into these devices, which is not a core competency of the CE manufacturer. CE manufacturers want an ongoing revenue relationship with their customer, not just to sell them a new device every few years. This leads to a demand for add-on services or advertising that will allow the CE manufacturer to share in the distribution or maintenance of digital content.

We sell our products into the following market verticals—(i) CE manufacturers (such as DVD player manufacturers and PC DVD drive suppliers, set-top box manufacturers, digital TV providers, and network- attached storage device providers), (ii) service providers (cable, satellite, telecommunications, mobile and internet service providers among others), and (iii) other.

An IPG is an on-screen listing of television or video program information with interactive functions that enable viewers to navigate through, sort, select and schedule video programming for viewing and recording. We believe that interactive video guidance technology is a necessary tool for television viewers bombarded with an increasing amount of available content, an increasing number of digital cable and satellite television channels, and VOD services. The IPG is evolving from a guide to television to a guide for all digital media users have access to in the home or available to them on their TV but delivered over the Internet.

We currently offer multiple IPGs to the CE industry, including those marketed under the G-GUIDE brand in Japan, the GUIDE Plus+ brand in Europe and the TV Guide On Screen brand in North America. These IPGs are generally incorporated in mid-to high-end plasma, DLP and LCD televisions and DVD hard drive recorder based products. Our IPGs generally deliver continuously updated multi-day program listings to users, regardless of whether they receive their television signal via cable or over-the-air broadcast. Our CE IPGs require no consumer subscription or special data input connection. We use a variety of terrestrial, satellite and broadband Internet transmission means to deliver listings data to our IPGs.

Our CE IPGs also feature advertising. Advertisers place ads through a variety of display formats incorporated into the guide screens. Advertisements can display additional text information and/or ad copy and/or video when clicked on via the remote control. An ad for a specific television program can even link directly to the TV channel it is on or allow consumers to program a recording or a reminder from the ad. Advertisers can target specific audiences by airing ads at certain times of the day or in specific geographies. CE manufacturers who have a patent license from us are not required to provide advertising in their IPG.

Our CE IPG licensees include Hitachi, LG, Panasonic, Mitsubishi, Motorola, Philips, Pioneer, Samsung, Scientific-Atlanta, Sharp, Sony, TiVo and others. Generally, our agreements enable our licensees to incorporate our CE IPG technology or utilize our CE IPG patents in specified products in certain territories provided we receive license fees based on the number of units produced and shipped that incorporate our technology or utilize our patents. We have also entered into agreements with certain licensees that enable them to ship an unlimited number of units provided they pay us a specified flat fee. We generally do not receive a license fee on set-top boxes that are manufactured by our CE licensees for a cable or satellite provider where that provider has also licensed our IPG technology.

In Japan, Interactive Program Guide Inc. (“IPG JV”) is our joint venture with Dentsu Inc. and Tokyo News Service Limited that is the exclusive provider of program listings and advertising for our IPGs marketed under the G-Guide name. We own 46.25% of the IPG JV and have certain contractual rights with respect to the ongoing management of the IPG JV. We also retain the right to license our technology and intellectual property to third parties in Japan who will receive program listings and advertising from the IPG JV, and we retain all rights to the revenue from such licenses. We have entered into licensing agreements with CE manufacturers and other third parties for televisions, digital recorders, personal computers and cell phones that are enabled to receive the G-Guide service.

Our business originated in analog video content security, now commercially known as ACP, which has been used to protect billions of videocassettes since 1985 and billions of DVDs since 1997. CE devices need to protect content in order to prevent playback devices from being used to illegally copy a video. Nearly every DVD player, VCR, DVD recorder, DVD drive and PC manufactured contains software and/or hardware technology licensed by us to ensure that ACP-secured DVDs and VHS tapes are properly recognized and thus secured. For additional details on ACP technology see “Content Protection” in the “Other” section below.

We sell directly to CE manufacturers as well as semiconductor companies that supply the CE manufacturers. Semiconductor companies that incorporate our digital pay-per-view (PPV), VOD and DVD content security solutions into their semiconductor and reference designs pay us a one-time service fee to verify correct implementation of our content security technology in their digital-to-analog application-specific integrated circuits (“ASICs”) that are embedded in digital set-top boxes and DVD hardware. They are authorized to sell these Macrovision-capable ASICs to Macrovision-licensed DVD hardware manufacturers and to Macrovision-licensed digital set-top box and DVR manufacturers.

CE device manufacturers license our technology for an up-front fee and annual license fee as well as per-device fee for shipped devices. Digital set-top box and DVR manufacturers license our video content security solutions typically for an up-front fee and a per-unit royalty, a portion of which may be tied to product activation by system operators.

Our CE content protection customers include Fujitsu Limited, Hitachi Limited, Intel, Mitsubishi Electronics, Motorola, Panasonic, Pioneer Electronics, Samsung Electronics, Scientific-Atlanta, Sony Electronics, TiVo, Toshiba and others.

Connected Platform is a standards-compliant software solution embedded in consumer electronics and networking equipment designed to allow consumers to access content such as photos, music, and movies stored remotely on any of their connected devices. The Connected Platform complies with the Digital Living Network Alliance (DLNA) and Universal Plug and Play (UPnP) Forum standards. It is sold to CE manufacturers and is comprised of several different components: Digital Media Server (DMS) software, Digital Media Adapter (DMA) software, and Digital Media Player (DMP) software, each sold as a software development kit (SDK). The SDK is used by developers to build digital home products on top of our software foundation for networked digital media devices. They are able to integrate the SDK into their devices to quickly create custom digital media solutions. The DMA software is built with the SDK and can be installed on PCs, DVRs, network-attached storage devices, or even mobile phones to allow users to stream digital media files from their personal home network or via the Internet. It is a means of speeding up development for a CE manufacturer who wants to provide this capability but does not need to build it from scratch with the SDK. The DMP and DMA software, built with the SDK, enables original equipment manufacturers (OEMs) and original design manufacturers (ODMs) to ship standards-based connected entertainment products that allow consumers to enjoy their personal media, such as music, photos, and video files—on a wide variety of player products. Additionally, the Company provides add-on services that support the Connected Platform. The current service on the market is Software Update Service (SUS). SUS enables digital home entertainment products to be configured for automated software updates.

Our Connected Platform customers currently include Buffalo, Samsung, Scientific Atlanta and others.

Our LASSO media recognition solution is an SDK that is embedded in a CE device or service that reads media and associates it with the correct data from the data services database (such as title, artist, tracks). The data look-up is accomplished either via a remote call to the infrastructure we operate or to a database we provide to embed on the device. The recognition is accomplished via either a table of contents review (for instance, read the table of contents of a CD) or taking a fingerprint of the media (for instance, identify wave formats of the media) and matching it to our database. The recognition technology is sold in conjunction with supporting data services. CE manufacturers typically pay us per device royalties for each device within which our media recognition data services are implemented.

Our VCR Plus+ (ShowView/Video Plus+ in Europe and G-Code in Asia) technology is an industry standard for setting the recording of television programming on VCRs and is adopted by most major consumer electronics manufacturers. VCR Plus+ is offered internationally in over 20 countries. It is incorporated into VCRs and digital devices such as low priced DVRs, DVD recorders and DVD-HDD products and enables consumers to record a television program by simply using a proprietary one to eight-digit PlusCode number. PlusCode numbers are generated through a patented process developed by us and are printed next to television listings in newspapers and program guides worldwide.

Our service provider licensees either deploy IPGs provided by the Company or, pursuant to an IPG patent license, their own IPG or a third party IPG. For those service providers that distribute one of our IPGs, we also offer them operational support, content and data. Our IPGs allow service providers to customize certain elements of the IPGs for their subscribers and also allow these providers to upgrade over time the features and services they can offer to their subscribers. Our IPGs are compatible with service providers’ subscription management, PPV and VOD services. Our IPGs also allow service providers to provide their viewers with current and future program information. We currently offer IPGs marketed to service providers under the i-Guide, j-Guide tru2way, Passport, Passport Echo, Passport DCT and Passport tru2way.

Our service provider IPGs, except Passport IPGs, also feature advertising. Service providers who have a patent license from us are not required to provide advertising in their IPG. However, our agreements with domestic service providers generally require the sharing of advertising revenue if IPG advertising is provided.

Service providers generally pay us a monthly per subscriber fee. Service providers in the Online space generally pay us a fee based on unique users. We have also entered into agreements with certain licensees that enable them to provide an IPG to an unlimited number of subscribers or unique users, provided they pay us a specified flat fee. Our service provider IPG customers include British Sky Broadcasting Group plc, Comcast Corporation (“Comcast”), Cox Communications, DirecTV, EchoStar Communications Corporation, Sky Italia S.r.l., Shaw Communications, Time Warner Cable, Verizon, Yahoo! and others. The majority of subscribers for which we are paid a license fee are receiving an IPG pursuant to a patent license between us and the service provider. As of December 31, 2008 approximately 86 million subscribers worldwide are receiving a licensed or Macrovision provided IPG, including 18 million internationally.

The Company and Comcast have a joint venture, Guideworks LLC (“Guideworks”), to develop IPGs for the cable industry. We own 49% of the joint venture and Comcast owns 51%, with Comcast serving as the managing member. Comcast has the right to use the joint development products in connection with products and services Comcast offers across its digital subscriber base. We have the exclusive right to distribute the joint development products in connection with products and services we offer to other multi-channel video service providers.

Digital PPV/VOD services enable consumers to purchase and view movies and other programming in their homes through cable, satellite or Internet-based delivery systems. As entertainment content producers consider the idea of simultaneous or more closely staged theatrical, DVD, and/or PPV/VOD release of content, studios have realized the importance of content security in digital PPV/VOD networks because high-quality VHS and DVD copies can be made from the source analog video signal. Many digital PPV/VOD system operators have implemented our content security capability in their digital set-top boxes. Our solutions allow content owners to copy protect their PPV/VOD movies, while at the same time allow consumers to store, move or share content, as long as it is done within the parameters of the rules defined by copyright owners. For additional details on ACP technology see “Content Protection” in the “Other” section below.

Cable and satellite television system operators pay us a one-time license fee and/or transaction-based royalty payments (i) for the right to incorporate our video content security technology into their networks for PPV or VOD services and (ii) when content security for digital PPV or VOD programming is activated by them and content protected programs are purchased by subscribers.

Other includes our entertainment company content protection products and services such as ACP, RipGuard and BD+; our AMG related web sites; and our business of licensing our extensive database of descriptive information about television, movie, music and game content.

Motion pictures typically generate significant revenue from the sales of packaged media, primarily DVDs. Any household that owns a DVD-R, personal video recorder (“PVR”), PC, media center, or a VCR is capable of making unauthorized, high-quality digital and analog copies unless that content is properly copy protected against this variety of threats. As new distribution models evolve, including portability of video across devices, Internet and other electronic distribution and the developing PC-based home theater experience, solutions that protect the DVD from unauthorized copying are critical to preserving motion picture studio revenues.

Our ACP technologies allow consumers to view programming stored on prerecorded videocassettes and DVDs or transmitted as digital pay-per-view or video-on-demand programs via cable or satellite, but deter unauthorized consumer copying of such programming on both VCRs and recordable DVD devices. Motion Picture Association of America (“MPAA”) and independent studios use our video content security technology to protect some or all movie releases on videocassette or DVD. In addition, nearly every DVD player, VCR, DVD recorder, DVD drive and PC manufactured contains software and/or hardware technology licensed by us to ensure that ACP-secured DVDs and VHS tapes are properly recognized and thus secured. For the protection to work it requires ACP to be present on both the media (physical or digital) and the hardware device.

Studios are now engaged in moving to the Blu-ray high definition DVD format (“Blu-ray”). Blu-ray includes a high level of protection implemented via BD+ technology. For a device to be certified as Blu-ray enabled, it must have BD+ technology embedded within it and MPAA studios can license BD+ to take advantage of that embedded protection. We acquired the assets comprising the BD+ technology in November 2007. BD+ is designed to be self renewing, therefore inhibiting rippers from being able to create unauthorized copies of the DVD. It is applied to the DVD at the time of manufacturing and interacts with elements of BD+ embedded in the Blu-ray player through the entire playback of the movie to ensure that it is an authorized copy. This sophisticated protection increases the security of a DVD and is designed to result in a longer protection period for a title.

We sell directly to MPAA and independent studios. Content owners utilize our solutions to secure their content and to ensure that their end-user customers pay them for the use of such content or software. Studios generally pay us either a one time fee to use our ACP technology in perpetuity or an annual license fee and generally pay us a per disc fee to license our BD+ technology.

Our content security technology customers included the following companies: Buena Vista Home Video, Columbia-TriStar, HBO Studio Productions, Twentieth Century Fox Home Entertainment, Warner Home Video DVD and others.

We offer music, television, movie and video game metadata. Our television guidance information database includes unique data on more than one million TV series episodes, 170,000 movies, and searchable data on every TV show produced since 1960. Our data services are operated with systematic processes that are designed to

ensure completeness and quality of data. The data services are broken into levels of data: basic data (e.g., artist, album), navigational data (e.g., relationships between actor and other movies or television series), and editorial data (e.g., actor biographies, television, movie or music reviews).

Besides embedding the data into web properties or CE devices, the databases are also made available to the market via web sites operated by Macrovision, specifically allmusic.com, allmovie.com, and allgame.com. Each is a complete view of the database, but not exportable for commercial use by others and is an advertising-supported business.

Web properties typically pay us a monthly or annual fee for the rights to use the metadata, receive regular updates and integrate it into their own service. Our music, movie and video game metadata customers include Best Buy, Barnes and Noble, Clear Channel Broadcasting, MTV Networks and others.

We provide resources for all types of media and businesses in print, on-screen and online formats—as well as through interactive and electronic program guides. Additionally the data covers multiple geographies including the US, Latin America, and major Western European countries. We license a number of data and service offerings, including schedules, listings, TV supplements, and Web services. Our data can be sold stand alone or as a compliment to an IPG.

We provide advertising to end consumers on our IPGs in both our service provider and CE product lines. We sell advertisers, often broadcasters, or their agencies the opportunity to promote their products via ads inserted in our guides. We offer packages to advertisers to provide them nationwide or targeted advertising on a guide for a period of time.

To demonstrate the value of this advertising we have begun to measure usage and ad views by consumers (a click stream analysis). We believe this information may enable us to increase our revenue from advertising by offering the advertiser evidence of the reach of a given ad or time slot. Advertising is offered in North America in our Service Provider and CE products and in Europe in our CE products. We typically share the advertising revenue with the service provider or CE manufacturer.

Build Upon Key Customer Relationships. We maintain relationships with customers in various industry and market segments, including:

We intend to grow our business by capitalizing on existing customer relationships and creating new ones. We will target existing customers and seek to expand the technologies we provide them, both now and in the future. Additionally, we will focus on non-customer companies seeking to capture a portion of the digital entertainment opportunity. We believe our compelling solutions will help us create new customer relationships.

Introduce New Product Applications and Technologies. We intend to develop additional digital entertainment content solutions to sell to our extensive customer base. We have committed significant resources to expand our technology base, to enhance our existing products, to introduce additional products, and to participate in industry standard-setting efforts and organizations. We intend to pursue opportunities to improve technologies in our current fields of operations as well as in future formats and digital distribution solutions.

Expand and Protect Patent Position. We have built, and continue to add to, a large patent portfolio that helps differentiate our products. We believe that our future success will depend on our ability to continue to introduce proprietary solutions for IPGs, connected devices and data. We have patented many of these proprietary solutions, and our patents underpin our strong competitive position and financial model. We also have acquired patents. We intend to continue to obtain patents and to protect and defend our patented technologies aggressively.

Continue to Make Strategic Acquisitions. We may continue to expand our technology portfolio and extend our businesses by pursuing licensing arrangements, joint ventures, and strategic acquisitions of companies whose technologies or proprietary rights complement our technologies.

We have made a number of acquisitions of companies and technologies. In January 2007, we acquired Mediabolic, Inc., which extended our capabilities in the delivery and enhancement of digital content through networking solutions to a wide variety of connected consumer electronics devices for the digital home. Mediabolic’s entertainment networking software enables TVs, stereos, DVRs, PCs, and other familiar consumer electronic devices to discover, store, and play personal and Internet-based content over the home network. In November 2007, we enhanced our content security technology portfolio by acquiring certain intellectual property and other assets from Cryptography Research Inc., including the SPDC™ (Self-Protecting Digital Content) technology that formed the basis of BD+. In December 2007, we acquired AMG, which extended our solutions for the enhancement and distribution of digital content by acquiring one of the world’s largest information databases of metadata for entertainment products (music, movies, and games) as well as solutions that support the recognition, discovery, and management of digital media. In May 2008, we acquired Gemstar-TV Guide International, Inc.

We own or have rights to various copyrights, trademarks and trade names used in our business. For our continuing business units, these include, but are not limited to, Macrovision^®, All Game Guide^®, All Music Guide^®, AMG^®, AMG All-Game Guide^®, AMG All-Media Guide^®, AMG All-Movie Guide^®, AMG Sonicguide^®, Explore Movies^®, Explore Music^®, Lasso™, M1 Mediabolic^®, Music Map™, RipGuard^®, Tapestry™, TV Guide, My TV Guide, TV Guide Interactive, TV Guide Mobile, TV Guide On Screen, (GUIDE Plus+ in Europe and G-GUIDE in Asia), Passport, VCR Plus+ (VIDEO Plus+, ShowView and G-CODE in Europe and Asia), PlusCode, and Gemstar.

Our internal research and development efforts are focused on developing enhancements to existing products and new applications for our current technologies. We have acquired other companies and technologies to supplement our research and development expenditures.

Our primary locations for product development from continuing operations are in Santa Clara/San Francisco (California), Los Angeles (California), Radnor (Pennsylvania) and Hong Kong (China).

We operate in an industry in which innovation, investment in new ideas and protection of our intellectual property rights are critical for success. We protect our innovations and inventions through a variety of means, including but not limited to applying for patent protection domestically and internationally.

As of December 31, 2008, we hold 452 U.S. patents and have 588 U.S. patent applications pending related to our continuing operations. We also have 2,071 foreign patents issued and 956 foreign patent applications pending related to our continuing operations. Each of our U.S issued patents will expire at a different time based on the particular filing date of that respective patent, with expiration dates as late as September 2026.

There are a number of companies that produce and market IPGs as well as television schedule information in various other formats, that compete or we believe will compete with our IPG products and services. These alternative formats include passive and interactive on-screen electronic guide services, online listings, printed television guides in newspapers and weekly publications, and local cable television guides.

A common competitor we encounter is a customer who choses to build its own IPG and license our intellectual property. We believe that we provide a strong alternative to “do-it-yourself,” as we have products ready to be implemented and already have data distribution infrastructure and content as well as integration to third party services (such as VOD services for service providers). We intend to build differentiation against “do-it-yourself” by integrating our products into a suite of products and services to provide solutions for our customers. We believe our solutions can speed our customers’ time to market, be deployed at a lower cost than internally built products, and are superior to “do-it-yourself” products.

We have begun to see activity from web properties, such as Yahoo and Google, entering the CE market, namely embedded in TV’s in North America. While we today are working with them cooperatively, such web properties could offer competitive functionality in the future.

We believe improvements in software porting and in software substitutability, together with government mandated introduction of an Open Cable Applications Platform, will increasingly permit the creation of new guides and their quick placement in set-top boxes—both those purchased or leased from service providers and those purchased at retail.

Many of our competitors and other companies and individuals have obtained, and may be expected to obtain in the future, patents that may directly or indirectly affect the products or services offered or under development by us. We are currently developing a variety of enhancements to our IPGs. We cannot assure that any enhancements developed by us would not be found to infringe patents that are currently held or may be issued to others. There can be no assurance that we are or will be aware of all patents containing claims that may pose a risk of infringement by our products and services. In addition, patent applications are generally confidential for a period of 18 months from the filing date, or until a patent is issued in some cases, so we cannot evaluate the extent to which certain products and services may be covered or asserted to be covered by claims contained in pending patent applications prior to their publication. In general, if one or more of our products or services were to infringe patents held by others, we may be required to stop developing or marketing the products or services, to obtain licenses to develop and market the products or services from the holders of the patents or to redesign the products or services in such a way as to avoid infringing the patent claims. This could have an affect on our ability to compete in the IPG marketplace.

Our video content security solutions are proprietary and have broad U.S. and international patent coverage. We have an analog content security solution that has been widely deployed on commercial products that significantly distorts or inhibits copying by VHS VCRs, DVD recorders, and hard drive recorders. Currently, our video content security technology is embedded in nearly all DVD players and most digital set-top boxes worldwide. While it is possible that a competitive video content security technology could be developed and deployed, we believe it would take years for the competitive technology to be accepted by hardware manufacturers and embedded into the consumer electronic devices. Given the time this would take, it is unlikely any other analog content security technology would displace our content security infrastructure and our extensive video content security “ecosystem.”

With the increase in online content distribution over the Internet, and with the continuing advance of digital content and high-definition formats, our analog video content security solutions that protect standard definition content on optical media and digital PPV/VOD signals are viewed by some of our customers as being less important than the other digital and network content protection solutions. As a result, other Internet-based digital content security or DRM technologies may present significant competition to our video content security business, such as DRM offerings by Intertrust, Microsoft, Apple, RealNetworks, Contentguard, Philips, IBM and Sony.

There is currently no alternative advanced protection recognized in the Blu-ray standard. The success of BD+ will be driven by whether the MPAA studios choose to apply it.

We are not aware of any product or service other than the VCR Plus+ system that allows the user to program a VCR by entering a numerical code. However, several products and services on the market offer other simplified VCR programming functions and thus compete with the VCR Plus+ system. Such products and services include on-screen program guides incorporating point-and-click recording capability. In addition, some products, such as DVRs, permit consumers to record programs directly from air, cable or satellite for later viewing through the use of memory chips and hard disk drives contained in the devices.

In the database and data services area, we compete with other providers of entertainment-related content data such as Tribune Media Services, Internet Movie Database (IMDB), Gracenote and Muze, Inc. While we do not believe that our competitors’ data sets are focused on exploration, discovery, and content management in the way that our data is, they may present competition to our data services business.

In the recognition technology and CE manufacturer area, our primary competitor is Gracenote, who provides media recognition technology as part of their CDDB data set. Their core technology provides basic album and track metadata when a CD is inserted into a drive. Other competitors include FreeDB and Pandora.

The competition for the Connected Platform is CE and set-top box (STB) manufacturers developing their own capability and others such as Twonky and Digi-on. However, we believe the integration of standards and DLNA reference status into Connect Platform provides us with significant competitive advantages. Additional competitors consist of companies that focus on CE middleware and STB software companies with CE middleware offerings.

We have technical support and certification operations to support our entertainment, CE and system operator products.

Our strategy is to license our technologies to third parties that manufacture products incorporating our technologies. Our manufacturing operations are limited to low-volume video and audio content security processors used by third-party replicators that require in-house system integration and quality control efforts.

A number of government and legislative initiatives have been enacted to encourage development and implementation of technologies that protect the rights and intellectual property of the content owners.

In the United States, Congress enacted the Digital Millennium Copyright Act (“DMCA”) in October 1998. This law required all VCRs to comply with analog copy protection technologies that are in widespread use, such as those covered in our patents, beginning in May 2000. The DMCA includes a clause that outlaws all circumvention devices and technologies that could be used to defeat widely used copy protection technologies. Manufacturers have designed DVD recorder devices so they will not record analog input that is Macrovision copy-protected. Hence, our technology prevents copying on both VCRs and DVD-R devices. We also believe that software “ripper” products, when they include circumvention of copy protection or CSS encryption, are illegal under the law. In addition, we believe that software ripper companies who update their ripper products in order to circumvent RipGuard may be in violation of the anti-circumvention provisions of the DMCA. The U.S. law is based on a set of guidelines for amending basic copyright laws to deal with the protection of digital media. The guidelines were adopted in 1996 by the World Intellectual Property Organization, an agency of the United Nations.

Several countries in Europe have adopted a similar EU-wide copyright directive, which includes a provision aimed at controlling hardware and software circumvention devices and technologies. Individual countries’ legislatures are currently discussing these new copyright initiatives. The implementation of the Copyright Directive throughout Europe is continuing, with more countries enacting legislation. The Directive brings into effect prohibitions on the manufacture, import, distribution, sale and marketing of circumvention devices and services. We have already taken action under the German and UK Copyright Acts and obtained injunctions against a number of retailers to stop sales of devices that circumvent our technology.

In Japan, a revision to the Japanese copyright law went into effect in October 1999 prohibiting the sale, manufacture, and import of circumvention devices. In addition, an industry directive that became effective in 1997 requires all digital recording devices to be responsive to analog copy protection technologies that utilize automatic gain control techniques, such as those covered by our patents.

We use the vertical blanking interval, or VBI, in the analog television signals of the local affiliates of major broadcast networks such as PBS (through National Datacast), ABC, CBS, NBC and Fox to supply updates throughout the day of program listing information to our TV Guide On Screen and GUIDE Plus+ branded consumer electronics devices in the United States. We have agreements with CBS Corporation (“CBS”) and National Datacast, Inc. (“NDI”) which allow for the distribution of our CE IPG data over the digital broadcast signals of both CBS and NDI participating stations, following the installation of necessary equipment. The FCC has ruled that it is within the discretion of a cable MSO to retransmit or strip out data transmitted in the VBI lines of broadcast stations carried on that MSO’s system. We have agreements with MSOs which provide for carriage of our program listing information in either the VBI or within the digital signal of broadcast television stations.

Full-power television stations must cease analog broadcasting pursuant to the Digital Television Transition and Public Safety Act of 2005 (“Act”). The February 2009 deadline has been delayed. To assist consumers wishing to receive broadcast programming over the air using analog-only televisions after this date, the Act authorizes the National Telecommunications and Information Administration (“NTIA”) to implement a digital-to-analog converter box coupon program. Under the program, eligible consumers may obtain coupons that can be applied towards the purchase of digital-to-analog converter boxes. At the request of the Company, in 2007 NTIA adopted regulations permitting eligible converter boxes to contain hardware and software necessary for the continued functionality of our IPGs in analog consumer electronic devices. We have agreements with converter box manufacturers to incorporate hardware and software necessary for the continued functionality of our CE IPGs. We believe the Act may cause some over the air analog television viewers to upgrade to digital cable or satellite service.

The FCC has been working for over a decade to implement a congressional mandate that it create a competitive market for cable television set-top boxes and other devices to access video programming on cable systems (“navigation devices”) and give consumers a choice in the device used to access such programming, while still allowing the cable systems to have control over the secured access to their systems.

To meet its statutory obligation without compromising the security of video services, the Commission required cable systems to make available a security element (now known as a CableCARD) separate from the basic navigation device needed to access video program channels. In 2003, the FCC adopted regulations implementing an agreement between cable television system operators and consumer electronics manufacturers to facilitate the retail availability of so-called “plug and play” devices that utilize unidirectional CableCARDs, including digital televisions and other digital devices that enable subscribers to access cable television programming without the need for a set-top box (but without the ability for consumers to use interactive content).

The parties continue to negotiate a bi-directional “plug and play” agreement. This agreement would permit a cable subscriber to utilize interactive and other two-way services without the need for a set-top box, meaning that consumers could use an IPG built directly into a TV to access and operate their cable subscriptions and not need to purchase or rent a set-top box from the cable operator.

In an effort to ensure that cable operators adequately support CableCARDs, FCC regulations also prohibit multi-channel video service providers (except satellite providers) from deploying after July 1, 2007 navigation devices with combined security and non-security functions (the “integration ban”). Both cable operators and consumer electronics manufacturers are required to use the same security solution. The Commission granted a number of requests for waiver of the integration ban, and denied several petitions for waivers or deferrals. Certain parties have asked the United States Court of Appeals for the District of Columbia Circuit to review the FCC’s denials.

Further developments with respect to these issues could impact the availability and/or demand for “plug and play” devices, particularly bi-directional devices, and set-top boxes, all of which could affect demand for IPGs incorporated in set-top boxes or CE devices.

As of December 31, 2008, we had approximately 1,186 full-time employees in our continuing operations. Of these employees, approximately 211 were based outside of the United States. None of our employees in our continuing operations are covered by a collective bargaining agreement or are represented by a labor union. We have not experienced any organized work stoppages. We believe that our future success will depend in part upon the continued service of our key employees and on our continued ability to hire and retain qualified personnel. We may not be able to retain our key employees and may not be successful in attracting and retaining sufficient numbers of qualified personnel to conduct our business in the future.

TV Guide Network offers entertainment and television guidance-related programming as well as localized program listings and descriptions primarily in the United States. TV Guide Network is typically included in a basic or expanded basic viewing package offered by television programming distributors to their subscribers, and is usually available in both analog and digital channel lineups. In cable television homes, the screen for TV Guide Network is divided into two components. The lower portion of the screen contains a scrolling program guide, which is color-coded by genre and displays updated local program listings information. This customized text portion of the screen contains viewing times, channel numbers, network identification, program titles, weather, movie descriptions, program ratings and ordering instructions for pay-per-view and, where available, VOD services, for channel lineups in the United States, Puerto Rico, and the U.S. Virgin Islands. The upper portion of the screen contains original programming dedicated to the world of television. In satellite homes, TV Guide Network’s programming is shown full-screen, without a scrolling program guide. As of December 31, 2008, TV Guide Network was distributed to 82.7 million households as measured by Nielsen Media Research. TV Guide Network generates revenue primarily from advertising and carriage fees paid by multi channel video service providers.

As of December 31, 2008, TV Guide Network had 242 full time employees, all of whom were located in the United States.

TV Guide Online is comprised of five entertainment websites, led by tvguide.com, which feature a combination of entertainment news, video programming, celebrity information, localized channel listings, editorial guidance, community features and search features. TV Guide Online generates revenue primarily from advertising.

As of December 31, 2008, TV Guide Online had 63 full time employees, all of whom were located in the United States.

The sale of our TV Guide Network and TV Guide Online businesses is expected to close in the first quarter of 2009.

TVG combines live horse racing from horse racetracks in the United States and other countries with the convenience of wagering from home via telephone, online (www.tvg.com), interactive set-top box and wireless application protocol enabled mobile devices, in certain states. In addition to live racing, the television programming also features commentary, race analysis and interviews with the sport’s newsmakers, handicapping tutorials, and originally-produced programming for racing’s major events. TVG, which as of December 31, 2008 was 94.5% owned by the Company, delivers racing content and accepts state-licensed pari-mutuel account wagers on races from horse racetracks in return for a fee based on a percentage of gross pari-mutuel wagering by TVG customers.

Prior to our sale of the TVG business, TVG maintained wagering accounts for residents of the following states: California, Florida, Idaho, Kentucky, Louisiana, Maryland, Massachusetts, Montana, New Hampshire, North Dakota, Ohio, Oregon, Virginia, Washington and Wyoming. Additionally, TVG managed an account wagering system in New York as an agent for Yonkers Raceway.

As of December 31, 2008, TVG had 155 full time employees, all of whom were located in the United States.

TV Guide magazine’s weekly content was centered on TV-related news, feature stories, TV celebrity photos, behind-the-scenes coverage, reviews and recommendations and national television listings. The magazine was published as one national edition, with either an Eastern/Central or a Mountain/Pacific time-zone listings. The sale of our TV Guide Magazine business closed on December 1, 2008.

Our Software business focused on independent software vendors and enterprise IT departments with solutions including: the FLEXnet suite of electronic license management, electronic license delivery and software asset management products; InstallShield and other installer products; and AdminStudio software packaging tools. Our Games business focused on providing tools and services needed to facilitate the digital distribution of providers of digital goods. The sales of our Software and Games businesses each closed on April 1, 2008.

eMeta provided software solutions that enabled companies to manage and sell digital goods and services online. The sale of our eMeta business closed in November 2008.

Our Internet website is located at http://www.macrovision.com. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or otherwise furnish it to, the Securities and

Exchange Commission (the “SEC”). Copies will be provided to any stockholder upon request to Macrovision Solutions Corporation, Attention: Corporate Secretary, 2830 De La Cruz Boulevard, Santa Clara, California 95050. The reference to our Internet website does not constitute incorporation by reference of the information contained on or hyperlinked from our Internet website and should not be considered part of this document.

The public may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s Internet website is located at http://www.sec.gov.

In addition to the other information contained in this Annual Report on Form 10-K, you should consider carefully the following risks. This list is not exhaustive and you should carefully consider these risks and uncertainties before investing in our common stock. If any of these risks occur, our business, financial condition or operating results could be adversely affected.

If we fail to develop and deliver innovative technologies in response to changes in the entertainment industry, our business could decline.

The markets for our products and technologies are characterized by rapid change and technological evolution. We will need to continue to expend considerable resources on research and development in the future in order to continue to design and deliver enduring, innovative entertainment products and technologies. Despite our efforts, we may not be able to develop and effectively market new products, technologies and services that adequately or competitively address the needs of the changing marketplace. In addition, we may not correctly identify new or changing market trends at an early enough stage to capitalize on market opportunities. At times such changes can be dramatic, such as the shift from VHS videocassettes to DVDs for consumer playback of movies in homes and elsewhere, the anticipated shift to high definition DVD or the transition from packaged media to Internet distribution. The continued decline in worldwide shipments of VCRs has resulted in a decline in our VCR Plus+ revenues over time, causing us to focus on growth in other parts of our business. Our future success depends to a great extent on our ability to develop and deliver innovative technologies that are widely adopted in response to changes in the entertainment industry and that are compatible with the technologies or products introduced by other entertainment industry participants. Despite our efforts and investments in developing new products, services and technologies:

Our failure to successfully develop new and improved products, services and technologies, including as a result of any of the risks described above, may reduce our future growth and profitability and may adversely affect our business results and financial condition.

If we are unable to compete effectively with existing or new competitors, we could experience price reductions, fewer customers, reduced margins or loss of market share.

Our IPGs face competition from companies that produce and market program guides as well as television schedule information in a variety of formats, both print and electronic. Several products and services on the market offer simplified VCR programming functions that compete with our VCR Plus+ system.

We believe that our DVD digital-to-analog copy protection and videocassette copy protection systems currently have limited competition. It is possible, however, that competitive copy protection technologies could be developed in the future. Increased competition would be likely to result in price reductions and loss of market share, either of which could harm our business. In the video marketplace, there are a variety of supplemental copy protection and encryption systems that provide partial copy protection for digital links. These systems are not directly competitive, as some apply to future products, but they are sometimes confused with our analog copy protection and may create uncertainty in the minds of customers, thereby reducing or delaying our licensing opportunities. Additionally, they may compete from the standpoint of content owners believing they have a limited budget for copy protection, and they may choose to spend their copy protection dollars on only a few technologies. DRM solutions for consumer software, video, and audio have also attracted a number of competitors. It is possible that companies with extensive financial resources may develop or acquire copy protection and rights management solutions that compete with our offerings, or may have a controlling patent position which would negatively impact our cost basis, or may give away their DRM technologies as in the case of the Windows Media Player.

In the connected device middleware and metadata marketplace, there is competition not only from other companies, but from customer-implemented internally-developed solutions as well.

New competitors or alliances among competitors may emerge and rapidly acquire significant market share in any of these areas. Our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements than we do, which could reduce demand for our products or render them obsolete.

Our business may be adversely affected by fluctuations in demand for consumer electronics devices incorporating our technologies.

We derive significant revenues from CE manufacturer license fees for our IPG and ACP technologies based on the number of units shipped. We do not manufacture hardware, but rather depend on the cooperation of CE manufacturers to incorporate our ACP and IPG technologies into their products. Generally, our license agreements do not require manufacturers to include our technology in any specific number or percentage of units, and only a few of these agreements guarantee a minimum aggregate licensing fee. Purchases of new CE devices, including television sets, integrated satellite receiver decoders, DVRs, DVD recorders, personal computers and Internet appliances are largely discretionary and may be adversely impacted by increasing market saturation, durability of products in the marketplace, new competing products, alternate consumer entertainment options and general economic trends in the countries or regions in which these products are offered. As a result, our future operating results may be adversely impacted by fluctuations in sales of consumer electronics devices employing our technologies.

In addition, the decision by manufacturers to incorporate our IPG technology into their products is a function of what other guide technologies and products are available. Our future operating results may be adversely impacted as a result of consumer electronics manufacturers opting not to incorporate our technology into their devices as a result of other available alternatives.

Dependence on the cooperation of MSOs and DBS providers, television broadcasters, hardware manufacturers, publications, data providers and delivery mechanisms could adversely affect our revenues.

We rely on third party providers to deliver our IPG data to consumer electronics devices that include our IPG. Further, our national data network provides customized and localized listings to our IPG service for MSOs and DBS providers and licensees of our data used in third party IPGs for MSOs and DBS providers. There can be no assurance that these delivery mechanisms will distribute the data without error or that the agreements that govern some of these relationships can be maintained on favorable economic terms.

To deliver our IPG data to consumer electronics devices, we have arrangements to carry our data in a part of the television signal called the VBI or its digital signal equivalent, of television stations included in the public broadcasting network, independently owned stations, and stations owned and operated by various station group owners. We have historically only delivered our IPG data to consumer electronics devices through the VBI in analog broadcast signals.

The FCC mandate of 100% digital transmission in the United States was scheduled to take effect in February 2009, but has since been delayed by Congress. In anticipation of this, we entered into agreements with CBS and NDI which allow for the distribution of our CE IPG data over the digital broadcast signals of both CBS and NDI participating stations, following the installation of necessary equipment. The FCC has ruled that it is within the discretion of a cable MSO to retransmit or strip out data transmitted in the VBI lines of broadcast stations carried on that MSO’s system. We have agreements with MSOs which provide for carriage of our program listing information in either the VBI or within the digital signal of broadcast television stations.

We also rely on other arrangements in the United States, which are not long-term, with other broadcasters for secondary carriage of our IPG data to consumer electronics devices. We cannot assure you that we will be able to successfully renew or extend any of our existing carriage arrangements when they expire, or that renewals will be on terms that are as favorable to us as the arrangements currently in effect. Our inability to renew the existing arrangements on terms that are favorable to us, or enter into alternative arrangements that allow us to effectively transmit our IPG data to consumer electronics devices could have a material adverse effect on our CE IPG business.

Our IPG data to CE devices broadcast through the VBI can be, and has been in the past in some markets, deleted or modified by some of the local service providers. Widespread deletion or modification of this data by service providers could have a material adverse impact on our CE IPG business. To mitigate this risk in the United States, we have entered into agreements with many service providers to ensure that our IPG data to CE devices will not be deleted or modified by such systems. Additionally, cable companies in the United States are progressively moving their systems from an analog format to a digital format, which poses certain problems to the passage of our IPG data to consumer electronics devices carried in their signals. Solving such problems will require the cooperation of third parties such as the MSOs and hardware manufacturers, and may also require additional investment by us. Furthermore, in order for CE devices that incorporate our IPG to receive our data, such data must also be able to pass through any receivers through which such CE devices are receiving television programming signals. Even if our IPG data is passed to cable subscribers through cable networks by the service providers, there is a risk that the cable set-top boxes deployed by such subscribers can impede the passage of our IPG data to CE devices. Widespread impedance of our IPG data to CE devices in any of the manners set forth above could have a material adverse impact on our CE IPG business.

We are currently making significant investments in the United States, Europe and Japan to build the capability to provide our program listings information via digital broadcast signals to support the next generation of products from our manufacturing partners. This involves in some cases deploying equipment to aggregate and insert listings data, and securing bandwidth in digital broadcast streams to deliver that data. If we are unable to complete this digital delivery build-out in each of our regions in time to meet the planned deployment of the next generation of digital broadcast reliant CE devices, this could have a material adverse impact on our consumer electronics IPG business.

We deliver our data to our IPG service for MSOs and to licensees of our data used in third party IPGs for MSOs via satellite transmission, among other means. While we have built in certain redundancies in our data delivery operation, a third party provides us with satellite capacity to transmit our data to our IPG service for certain MSOs and to licensees of our data used in third party IPGs for MSOs. Our arrangement with the third party provider may be terminated on little or no notice. In the event that a provider of satellite capacity elects not to provide this capacity to transmit our data, there can be no assurance that all of our customers who currently receive our data via such provider will be able to receive our data via alternative means without significant delay or additional cost to us. In the event that such provider elects not to transmit our data, our business, operating results and financial condition could be adversely affected.

In addition, we purchase some of our program guide information from commercial vendors. The quality, accuracy and timeliness of that data may not continue to meet our standards or be acceptable to consumers.

Our VCR Plus+ system relies on consumer access to PlusCode numbers through licensed publications. We depend on the maintenance and renewal of agreements governing the PlusCode publications to ensure the distribution of the PlusCodes.

The effects of the continued global economic crisis may impact our business, operating results, financial condition or liquidity.

The recent global economic crisis has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, an unprecedented level of intervention from the United States federal government and other foreign governments, decreased consumer confidence, overall slower economic activity and extreme volatility in credit, equity and fixed income markets. While the ultimate outcome of these events cannot be predicted, these macroeconomic developments could negatively affect our business, operating results, financial condition or liquidity in a number of ways. For example, if the economic downturn makes it difficult for our customers and suppliers to accurately forecast and plan future business activities, they may cause them to delay, decrease or cancel purchases of our solutions or reduce production of their products. As many of our solutions are licensed on a per-unit fee basis, our customers’ decision to decrease production of their products or devices may decrease our licensing revenue and adversely impact our operating results.

Furthermore, as our customers face a weakening economy, they may not be able to gain sufficient credit in a timely manner, which could result in an impairment of their ability to place orders with us or to make timely payments to us for previous purchases. If this occurs, our revenue may be reduced, thereby having a negative impact on our results of operations. In addition, we may be forced to increase our allowance for doubtful accounts and our days sales outstanding may increase, which would have a negative impact on our cash position, liquidity and financial condition. We cannot predict the timing or the duration of this or any other economic downturn in the economy and we are not immune to the effects of general worldwide economic conditions.

In addition, financial institution failures may cause us to incur increased expenses or make it more difficult either to utilize our existing debt capacity or otherwise obtain financing for our operations, investing activities (including the financing of any future acquisitions), or financing activities (including the timing and amount of any repurchases of our common stock or debt we may make in the future). Our investment portfolio, which includes short-term debt securities, is generally subject to general credit, liquidity, counterparty, market and interest rate risks that may be exacerbated by the recent global financial crisis. If the banking system or the fixed income, credit or equity markets continue to deteriorate or remain volatile, our investment portfolio may be impacted and the values and liquidity of our investments could be adversely affected.

Finally, like many other stocks, our stock price has been affected by the global economic uncertainties and if investors have concerns that our business, operating results and financial condition will be negatively impacted by a worldwide economic downturn, our stock price could further decrease.

If the recent worsening of credit market conditions continues or increases, it could adversely impact our investments and as a result, our liquidity.

Recent deterioration of the credit markets has led to liquidity issues and failed auctions in the auction rate securities market. The auction rate securities we hold have failed to trade at recent auctions due to insufficient bids from buyers. We have recorded unrealized losses related to our available-for-sale auction rate securities to accumulated other comprehensive income due to temporary declines in fair value and reclassified all auction rate securities from short-term investments to long-term marketable investments on our balance sheet. If there are future unsuccessful auctions, the fair value of these auction rate securities may continue to decline. The decline in fair value of our available-for-sale auction rate securities may become other than temporary and we may incur impairment charges in connection with these securities which would adversely impact our earnings and financial condition.

We are exposed to risks associated with our changing technology base through strategic acquisitions, investments and divestitures.

We have expanded our technology base in the past through strategic acquisitions and investments in companies with complementary technologies or intellectual property and intend to do so in the future. Acquisitions hold special challenges in terms of successful integration of technologies, products and employees. In addition to the acquisition of Gemstar in May 2008, over the last two years we completed the divestitures of our TV Guide Magazine business (December 2008), our Software business (April 2008), our Games business (April 2008), our eMeta business (November 2008) and our TVG Network business (January 2009). We also completed the acquisitions of Mediabolic, Inc. (January 2007) and All Media Guide Holdings, Inc. (December 2007) and the acquisition of the assets of Cryptography Research, Inc. (November 2007). We are currently in the process of divesting our TV Guide Network and TV Guide Online businesses and expect to close the divestiture in the first quarter of 2009. We may not realize the anticipated benefits of these acquisitions and divestitures or the benefits of any other acquisitions we have completed or may complete in the future, and we may not be able to incorporate any acquired services, products or technologies with our existing operations, or integrate personnel from the acquired businesses, in which case our business could be harmed.

Acquisitions, divestitures and other strategic investments involve numerous risks, including:

Financing for future acquisitions may not be available on favorable terms, or at all. If we identify an appropriate acquisition candidate for any of our businesses, we may not be able to negotiate the terms of the acquisition successfully, finance the acquisition or integrate the acquired business, products, technologies or employees into our existing business and operations. Future acquisitions and divestitures may not be well-received by the investment community, which may cause the value of our stock to fall. We cannot ensure that we

will be able to identify or complete any acquisition or divestiture in the future, and our senior secured credit facility and the indenture related to the notes impose some restrictions on our ability to make and finance additional acquisitions or divestitures.

If we acquire businesses, new products or technologies in the future, we may incur significant acquisition-related costs. Divestitures could cause similar problems to occur. In addition, we may be required to amortize significant amounts of identifiable intangible assets and we may record significant amounts of goodwill that will be subject to annual testing for impairment. We have in the past and may in the future be required to write off all or part of one or more of these investments that could harm our operating results. If we consummate one or more significant future acquisitions in which the consideration consists of stock or other securities, our existing stockholders’ ownership could be significantly diluted. If we were to proceed with one or more significant future acquisitions in which the consideration included cash, we could be required to use a substantial portion of our available cash. Acquisition activities could also cause operating margins to fall depending upon the financial models of the businesses acquired.

Our strategic investments may involve joint development, joint marketing, or entry into new business ventures, or new technology licensing. Any joint development efforts may not result in the successful introduction of any new products by us or a third party, and any joint marketing efforts may not result in increased demand for our products. Further, any current or future strategic acquisitions and investments by us may not allow us to enter and compete effectively in new markets or enhance our business in our existing markets.

We currently hold minority equity interests in a few privately held companies. There is no active trading market for the securities of privately held companies and our investments in them are illiquid at best. We have written off substantially all of our investments in such privately held companies and we may never have an opportunity to realize any return on our investments in them.

We expect to exit non-strategic business lines and divest non-strategic assets in order to enhance our focus on the execution of our business with respect to our core strategic assets business plan. Such exit activities may not occur on the timeframes desired by management, or may not occur on terms favorable to us, which may impact management’s focus on its strategic assets and may also impact our ability to support our debt obligations.

Covenants in our debt agreements restrict our business in many ways and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected.

Our credit facilities contain various covenants that limit our ability and/or our restricted subsidiaries’ ability to, among other things:

In addition, our senior secured credit facility contains restrictive covenants and requires us to maintain specified financial ratios. Our ability to meet those financial ratios can be affected by events beyond our control, and we may be unable to meet those tests. In addition, we have historically had less debt with fewer covenants. If we fail to maintain effective internal controls to comply with these covenants, we may be in breach. A breach of any of these covenants could result in a default under our senior secured credit facility and/or our other indebtedness. Upon the occurrence of an event of default under our senior secured credit facility, the lenders could elect to declare all amounts outstanding under our senior secured credit facility to be immediately due and payable. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. A significant portion of our assets are subject to liens. If the lenders under our senior secured credit facility accelerate the repayment of borrowings, we may not have sufficient assets to repay our senior secured credit facility and our other indebtedness. Our borrowings under our senior secured credit facility are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.

We have a substantial amount of indebtedness which could adversely affect our financial position and prevent us from fulfilling our debt obligations.

We have a substantial amount of indebtedness. As of December 31, 2008, we had total debt from continuing operations of approximately $887.6 million, consisting of $100.0 million of senior notes, $547.3 million of borrowings under our senior secured credit facility, $0.3 million of capital lease obligations and $240.0 million of convertible notes. We may also incur significant additional indebtedness in the future. Our substantial indebtedness may:

Our ability to meet our debt service obligations will depend on our future performance, which will be subject to financial, business, and other factors affecting its operations, many of which are beyond our control.

We may not be able to generate sufficient cash to service our debt obligations.

Our ability to make payments on and to refinance our indebtedness will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to

meet our debt service and other obligations. Our credit agreements restrict our ability to dispose of assets, use the proceeds from any disposition of assets and to refinance our indebtedness. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.

Repayment of our debt is dependent on cash flow generated by our subsidiaries.

Macrovision Solutions Corporation’s subsidiaries, including Macrovision Corporation and Gemstar-TV Guide International, own a significant portion of our assets and conduct substantially all of our operations. Accordingly, repayment of our indebtedness is dependent, to a significant extent, on the generation of cash flow by the subsidiaries, including Macrovision Corporation and Gemstar-TV Guide International, and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors or a co-issuer of our indebtedness, our subsidiaries do not have any obligation to pay amounts due on our indebtedness or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness. Each subsidiary is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.

Despite our current level of indebtedness, we may still be able to incur substantially more indebtedness. This could exacerbate the risks associated with our substantial indebtedness.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our credit agreements and indentures limit, but do not prohibit, us or our subsidiaries from incurring additional indebtedness. If we incur any additional indebtedness that ranks equally with existing indebtedness, the holders of that indebtedness will be entitled to share ratably with the holders of our existing debt obligations in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of us. If new indebtedness is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.

Changes in, or interpretations of, tax rules and regulations, may adversely affect our effective tax rates.

We are subject to income taxes in the U.S. and foreign tax jurisdictions. Our future effective tax rates could be unfavorably affected by changes in tax laws or the interpretation of tax laws, by changes in the amount of revenue or earnings that we derive from international sources in countries with high or low statutory tax rates, or by changes in the valuation of our deferred tax assets and liabilities. Unanticipated changes in our tax rates could affect our future results of operations.

In addition, federal, state, and foreign tax jurisdictions may examine our income tax returns, including income tax returns of acquired companies and acquired tax attributes included therein. We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. In making such assessments, we exercise judgment in estimating our provision for income taxes. While we believe our estimates are reasonable, we cannot assure you that the final determination from these examinations will not be materially different from that reflected in our historical income tax provisions and accruals. Any adverse outcome from these examinations may have a material adverse effect on our business and operating results, which could cause the market price of our stock to decline.

We may fail to realize the anticipated benefits expected from the Gemstar acquisition.

Our success will depend, in part, on our ability to realize the anticipated revenue opportunities from combining the businesses of Macrovision and Gemstar. Our management believes that combining its and Gemstar’s assets will provide each company’s customers, including consumer electronics manufacturers, operators of cable and satellite programming distribution systems, direct satellite broadcasters and web portals,

with new tools, services and technologies to allow their consumers to discover, acquire, manage and enjoy content and thus produce new revenue opportunities for our company. There can be no assurance, however, that the market will adopt our new tools, services and technologies, or that these revenue opportunities will be achieved. If we are not able to successfully achieve these objectives, the anticipated benefits of the mergers may not be realized fully or at all or may take longer to realize than expected. The combining of the two companies’ businesses, even if achieved in an efficient, effective and timely manner, may not result in better combined results of operations and financial condition than would have been achieved by each company independently.

The failure to integrate successfully Macrovision’s and Gemstar’s businesses and operations may adversely affect our future results.

Integrating the acquired business has been and will continue to be a complex, time-consuming and expensive process, and can impact the effectiveness of our internal controls. The integration process and other disruptions from the acquisition of Gemstar and divestitures of the TV Guide properties could result in the disruption of our ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers, suppliers, employees and others with whom we have business dealings or to achieve the anticipated benefits of the acquisition of Gemstar. Our management will continue to have to devote substantial resources and efforts to it, which could distract management from executing other strategic priorities of the combined company’s business.

We believe that our future success will depend on our ability to continue to introduce proprietary solutions for digital content and technologies. We rely on a combination of patent, trademark, copyright and trade secret laws, nondisclosure and other contractual provisions, and technical measures to protect our intellectual property rights. Our patents, trademarks or copyrights may be challenged and invalidated or circumvented. Our patents may not be of sufficient scope or strength or be issued in all countries where products incorporating our technologies can be sold. We have filed applications to expand our patent claims and for improvement patents to extend the current expiration dates, however, expiration of some of our patents may harm our business. If we are not successful in protecting our intellectual property, our business would be harmed.

Others may develop technologies that are similar or superior to our technologies, duplicate our technologies or design around our patents. Effective intellectual property protection may be unavailable or limited in some foreign countries. Despite efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise use aspects of processes and devices that we regard as proprietary. Policing unauthorized use of our proprietary information is difficult, and the steps we have taken may not prevent misappropriation of our technologies. Such competitive threats could harm our business.

We may initiate patent infringement or patent interference actions or other litigation to protect our intellectual property, which could be costly and harm our business.

We are currently engaged in litigation, and litigation may be necessary in the future, to enforce our patents and other intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others.

We, and many of our current and potential competitors, dedicate substantial resources to protection and enforcement of intellectual property rights, especially patents in the area of digital rights management technologies. We believe that companies will continue to take steps to protect these technologies, including, but not limited to, seeking patent protection. As a result, disputes regarding the ownership of these technologies and the associated rights are likely to arise in the future and may be very costly. Companies in the technology and content-related industries have frequently resorted to litigation regarding intellectual property rights. We may be forced to litigate to determine the validity and scope of other parties’ proprietary rights. Any such litigation could be very costly, could distract our management from focusing on operating our business, and might ultimately be unsuccessful. The existence and/or outcome of such litigation could harm our business.

We may be subject to intellectual property infringement claims or other litigation, which are costly to defend and could limit our ability to use certain technologies in the future.

From time to time we receive claims and inquiries from third parties alleging that our internally developed technology, technology we have acquired or technology we license from third parties may infringe other third parties’ proprietary rights, especially patents. Third parties have also asserted and most likely will continue to assert claims against us alleging infringement of copyrights, trademark rights or other proprietary rights, or alleging unfair competition or violations of privacy rights. We could be required to spend significant amounts of time and money to defend ourselves against such claims. If any of these claims were to prevail, we could be forced to pay damages, comply with injunctions, or stop distributing our products and services while we re-engineer them or seek licenses to necessary technology, which might not be available on reasonable terms or at all. We could also be subject to claims for indemnification resulting from infringement claims made against our customers and strategic partners, which could increase our defense costs and potential damages. For example, we have received notices and lawsuits from certain customers requesting indemnification in patent-related lawsuits. We evaluate the requests and assess whether we believe we are obligated to provide such indemnification to such customers on a case by case basis. Customers or strategic partners making such requests could become unwilling or hesitant to do business with us if we decline such requests. An adverse determination with respect to such requests or in any of these events described above could require us to change our business practices and have a material impact on our business and results of operations.

We are involved in the business of protection and enablement of audio, video and software content on the Internet. There has been, and we believe that there will continue to be, an increasing level of litigation to determine the applicability of current laws to, and impact of new technologies on, the use and distribution of content over the Internet and through new devices. As we develop products and services that protect, provide or enable the provision of content in such ways, the risk of litigation against us may increase.

For our business to succeed, we need to attract and retain qualified employees and manage our employee base effectively.

Our success depends on our ability to hire and retain qualified employees and to manage our employee base effectively. Because of the specialized nature of our business, our future success will depend upon our continuing ability to identify, attract, train and retain other highly skilled managerial, technical, sales and marketing personnel, particularly as we enter new markets. Competition for people with the skills that we require is intense, particularly in the San Francisco Bay area where our headquarters are located and Los Angeles where we have significant operations, and the high cost of living in these areas makes our recruiting and compensation costs higher. In particular, declines in technology market values and the resultant impact on our stock price have in the past and may in the future impair our ability to effectively use stock options as an incentive to hire and retain employees. If we are unable to hire and retain qualified employees, our business and operating results could be adversely affected.

We must establish and maintain licensing relationships with companies to build and support a worldwide content value management ecosystem and to expand our business, and failure to do so could harm our business prospects.

Our future success will depend upon our ability to establish and maintain licensing relationships with companies in related business fields, including:

Substantially all of our license agreements are non-exclusive, and therefore our licensees are free to enter into similar agreements with third parties, including our competitors. Our licensees may develop or pursue alternative technologies either on their own or in collaboration with others, including our competitors.

Some of our third party license arrangements will require that we license others’ technologies and/or integrate our solutions with others. In addition, we rely on third parties to report usage and volume information to us. Delays, errors or omissions in this information could harm our business. If these third parties choose not to support integration efforts or delay the integration, our business could be harmed.

It may be more difficult for us, in the future, to have our technologies adopted as individual industry standards to the extent that entertainment industry participants collaborate on the development of industry standard technologies.

Increasingly, standards-setting organizations are adopting or establishing technology standards for use in a wide-range of consumer electronics products. As a result, it is more difficult for individual companies to have their technologies adopted wholesale as an informal industry standard. In addition, increasingly there are a large number of companies, including companies that typically compete against one another, involved in the development of new technologies for use in consumer entertainment products. As a result, these companies often license their collective intellectual property rights as a group, making it more difficult for any single company to have its technologies adopted widely as a de facto industry standard or to have its technologies adopted as an exclusive, explicit industry standard. Examples of this include MPEG-LA (DRM licensing); Blu-ray DVD (high definition DVD format); and Digital Living Network Alliance (DLNA) and the Universal Plug and Play (UPnP) Forum (interoperability of consumer electronics devices). If our technologies are not supported by these standards bodies or patent pools, it may be more difficult for us to grow our business in the future. Our major customers may have a large influence on industry standards and the widespread adoption of new technologies. The selection of alternative technologies to ours or to those on which our technologies operate would harm our business.

Continued consolidation of the cable and satellite broadcasting industry could adversely affect existing agreements; the impact of these changes is not clear.

We have entered into agreements with a large number of cable MSOs and DBS providers for the licensing or distribution of our technology, products and services. If, as expected, consolidation of the cable and satellite

broadcasting industry continues, some of these agreements may be affected by mergers, acquisitions or system swaps. We cannot assure you that any measures that we have taken to protect us against any negative consequences resulting from those transactions will be effective. Also, a service provider that files a bankruptcy petition or otherwise restructures or liquidates could avoid its future obligations and discharge its past payment obligations under the agreement in some circumstances. Any such events could have a material adverse effect on the amount of revenue we receive under these agreements.

The market for IPG advertising and our ability to fully exploit it may not develop.

The market for IPG advertising is at an early stage of development and we cannot assure you that we will succeed in our efforts to develop IPG advertising as an advertising medium widely accepted by consumers and advertisers. In addition, MSO, DBS and Internet protocol television, or IPTV, providers who have a patent license from us are not required to provide advertising in their IPG. Therefore our ability to derive advertising revenues from IPGs distributed by our patent licensees is also dependent on the implementation of IPG advertising by such licensees.

Limitations on control of joint ventures may adversely impact our operations.

We hold our interests in certain businesses, including Guideworks and IPG Inc., as a joint venture or in partnership with nonaffiliated third parties. As a result of such arrangements, we may be unable to control the operations, strategies and financial decisions of such joint venture or partnership entities which could in turn result in limitations on our ability to implement strategies that we may favor, or to cause dividends or distributions to be paid. In addition, our ability to transfer our interests in businesses owned with third parties is limited under certain joint venture, partnership or similar agreements.

We have limited control over existing and potential customers’ and licensees’ decisions to include our technology in their product offerings.

In general, we are dependent on our customers and licensees—including producers and distributors of content for films and videos—to incorporate our technology into their products. Although we have license agreements with many of these companies, many of these license agreements do not require any minimum purchase commitments, or are on a non-exclusive basis, or do not require incorporation of our technology in their products. If our customers were to determine that the benefits of our technology do not justify the cost of licensing the technology, then demand for our technology would decline. Furthermore, while we may be successful in obtaining mandatory status for our technology in one or more industry standards, there is no guarantee that products associated with these standards will be successful in the market. Our licensees and other manufacturers might not utilize our technology in the future. If this were to occur, our business would be harmed.

Our relationships with entertainment industry participants are particularly important to our businesses, and if we fail to maintain such relationships our business could be materially harmed.

If we fail to maintain and expand our relationships with a broad range of participants throughout the entertainment industry, including motion picture studios, broadcasters and manufacturers of CE products, our business and prospects could be materially harmed. Relationships have historically played an important role in the entertainment industries that we serve. If we fail to maintain and strengthen these relationships, these entertainment industry participants may not purchase and use our technologies, which could materially harm our business and prospects. In addition to directly providing a substantial portion of our revenue, these relationships are also critical to our ability to have our technologies adopted as industry standards. Moreover, if we fail to maintain our relationships, or if we are not able to develop relationships in new markets in which we intend to compete in the future, including markets for new technologies and expanding geographic markets, our business, operating results and prospects could be materially and adversely affected. In addition, if major industry participants form strategic relationships that exclude us, our business and prospects could be materially adversely affected.

The success of our entertainment business depends on the continued use by major movie studios of, and market demand for, our video content protection technology.

Historically, we have derived a large percentage of our net revenues and operating income from fees for the application of our patented video content protection technology to various video formats, including prerecorded videocassettes, DVDs, PPV and VOD, programs.

Revenues from these fees will depend on (a) growth in the various media formats, including the Blu-ray format, (b) use of our video content protection technology on videocassettes, DVDs, digital PPV/VOD programs or PCs, and (c) pricing for our technology. To increase or maintain our market penetration, we must continue to persuade content owners that the cost of licensing our technology is outweighed by the increase in revenues that content owners and retailers gain as a result of using content protection, such as revenues from additional sales of the copy protected material or subsequent revenues from other distribution channels.

Our ability to expand our markets into digital PPV/VOD and other venues will depend in large part on the support of the major motion picture studios in advocating the incorporation and activation of copy protection technology in the hardware and network infrastructure required to distribute such video programming. Consumers may react negatively to copy protected PPV or VOD programming because they may feel they are entitled to copy, having in the past routinely copied for later viewing analog cable and satellite-delivered subscription television, PPV programs and recorded music. If there is consumer dissatisfaction that cannot be managed or if there are technical capability or other problems, our business could be harmed.

Any decline in demand for our video content protection technology, including a change of video content protection policy by the major motion picture studios, a decline in sales of prerecorded videocassettes and DVDs that are encoded with our video content protection technology due to a shift from physical media distribution to digital distribution or otherwise, additional declines in our average unit royalties, as well as loss of demand due to consumers choosing to utilize peer-to peer services and not purchasing authentic packaged media or authorized DRM downloads, could adversely affect our business. If our customers are unable to prevent their content from becoming available through piracy sources, they may consider our technology to be less valuable, and if one or more of the motion picture studios were to withdraw its support for our content protection technologies or otherwise determine not to copy protect a significant portion of prerecorded videocassettes, DVD or digital PPV/VOD programs, our business would be harmed.

As our entertainment technologies customers try to minimize costs, they may decrease their content protection usage or negotiate decreases in their usage fees, which may result in a substantial decline in our entertainment related revenues.

Studios face increased pressure to trim their DVD manufacturing expenses. This includes cutting back their content protection usage, as well as negotiated reductions in their usage fees. Diminishing margins that studios have been experiencing have contributed to a reduction in the prices we can charge them to include our video content protection technology in their products. As such, we have experienced a decline in our entertainment technologies’ revenue associated with DVDs in the last two years. In addition, some studios choose to copy protect selected titles, or choose to not use any copy protection, and their actions may influence other studios to do the same, which could harm our business.

Our operating results may fluctuate, which may cause us to not be able to sustain our revenue levels or rate of revenue growth on a quarterly or annual basis and which may cause our common stock price to decline.

Our quarterly and annual revenues, expenses and operating results could vary significantly in the future and period-to-period comparisons should not be relied upon as indications of future performance. We may experience volatility in revenues which may cause us to not be able to sustain our revenue levels, or our rate of revenue growth, on a quarterly or annual basis. In addition, we may be required to delay or extend recognition of revenue

on more complex licensing arrangements as required under generally accepted accounting principles in the United States. Fluctuations in our operating results have in the past caused, and may in the future cause, the price of our common stock to decline.

Our quarterly operating results may also fluctuate depending upon when we receive royalty reports from certain licensees. We recognize a portion of our license revenue only after we receive royalty reports from our licensees regarding the manufacture of their products that incorporate our technologies. As a result, the timing of our revenue is dependent upon the timing of our receipt of those reports, some of which are not delivered until late in the quarter or after the end of the quarter. This may put us in a position of not being able to anticipate a decline in revenues in any given quarter. In addition, it is not uncommon for royalty reports to include corrective or retroactive royalties that cover extended periods of time. Furthermore, there have been times in the past when we have recognized an unusually large amount of licensing revenue from a licensee in a given quarter because not all of our revenue recognition criteria were met in prior periods. This can result in a large amount of licensing revenue from a licensee being recorded in a given quarter that is not necessarily indicative of the amounts of licensing revenue to be received from that licensee in future quarters, thus causing fluctuations in our operating results.

A significant portion of our revenues is derived from international sales. Economic, political, regulatory and other risks associated with our international business could have an adverse effect on our operating results.

We expect that international and export sales will continue to represent a substantial portion of our net revenues for the foreseeable future. Our future growth will depend to a large extent on worldwide acceptance and deployment of our solutions.

To the extent that foreign governments impose restrictions on importation of programming, technology or components from the United States, the demand for our solutions in these markets could diminish. In addition, the laws of some foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States, which increases the risk of unauthorized use of our technologies. Such laws also may not be conducive to copyright protection of digital content, which may make our content protection technology less effective and reduce the demand for it.

Because we sell our products worldwide, our business is subject to the risks associated with conducting business internationally, including:

Our business could be materially adversely affected if foreign markets do not continue to develop, if we do not receive additional orders to supply our technologies or products for use by foreign system operators, CE manufacturers and PPV/VOD providers or if regulations governing our international businesses change. Any changes to the statute or the regulations with respect to export of encryption technologies could require us to redesign our products or technologies or prevent us from selling our products and licensing our technologies internationally.

We have made and expect to make significant investments in infrastructure which, if ineffective, may adversely affect our business results.

We have made and expect to make significant investments in infrastructure, tools, systems, technologies and content, including initiatives relating to digital asset and rights management and data warehouses, aimed to create, assist in the development or operation of, or enhance our ability to deliver innovative products and services across multiple media, digital and emerging platforms. These investments may ultimately cost more than is anticipated, their implementation may take longer than expected and they may not meaningfully contribute to or result in successful new or enhanced products, services or technologies.

Some terms of our agreements with licensees could be interpreted in a manner that could adversely affect licensing revenue payable to us under those agreements.

Some of our license agreements contain “most favored nation” clauses. These clauses typically provide that if we enter into an agreement with another licensee on more favorable terms, we must offer some of those terms to our existing licensees. We have entered into a number of license agreements with terms that differ in some respects from those contained in other agreements. These agreements may obligate us to provide different, more favorable, terms to licensees, which could, if applied, result in lower revenues or otherwise adversely affect our business, financial condition, results of operations or prospects. While we believe that we have appropriately complied with the most favored nation terms included in our license agreements, these contracts are complex and other parties could reach a different conclusion that, if correct, could have an adverse effect on our financial condition or results of operations.

Our products could be susceptible to errors, defects, or unintended performance problems that could result in lost revenues, liability or delayed or limited market acceptance.

We offer and develop a series of complex content management and software solutions, which we license to customers. The performance of these products typically involves working with sophisticated software, computing and communications systems. Due to the complexity of these products offered and developed, and despite our quality assurance testing, the products may contain undetected defects or errors that may affect the proper use or application of such products by the customer. Because our products are embedded in digital content and other

software, our solutions’ performance could unintentionally jeopardize our customers’ product performance. Any such defects, errors, or unintended performance problems in existing or new products, and any inability to meet customer expectations in a timely manner, could result in loss of revenue or market share, failure to achieve market acceptance, diversion of development resources, injury to our reputation, increased insurance costs and increased service, any of which could materially harm our business.

In addition, we rely on the customer and third party replicators to properly use our products to protect the software and applications to which our technology may be applied. Any improper use or application of the software by the customer or the third party replicators may render our technologies useless and result in losses from claims arising out of such improper use of the products.

Because customers rely on our products as used in their software and applications, defects or errors in our products may discourage customers from purchasing our products.

These defects or errors could also result in product liability or warranty claims. Although we attempt to reduce the risk of losses resulting from these claims through warranty disclaimers and limitation of liability clauses in our agreements, these contractual provisions may not be enforceable in every instance. Furthermore, although we maintain errors and omissions insurance, this insurance may not adequately cover these claims. If a court refused to enforce the liability-limiting provisions of our contracts for any reason, or if liabilities arose that were not contractually limited or adequately covered by insurance, our business could be materially harmed.

In protecting copyrights and other intellectual property rights of our customers, our products affect consumer use of our customers’ products. Consumers may view this negatively and discontinue or threaten to discontinue purchase or use of our customers’ products unless our customers stop using our technologies. This may cause a decline in demand for our products or legal actions against us by our customers or consumers.

The satellite transmission, cable and telecommunications industries are subject to pervasive federal regulation, including FCC licensing and other requirements. These industries are also often subject to extensive regulation by local and state authorities. While these regulations do not apply directly to us, they affect cable television providers and other multi-channel video programming distributors, or MVPDs, which are the primary customers for certain of our products and services. FCC regulations prohibit MVPDs (except DBS providers) from deploying after July 1, 2007 consumer electronic navigation devices (e.g., set-top boxes) with combined security and non-security functions (the “integration ban”). The FCC recently granted a number of requests for waiver of the integration ban, and denied several petitions for waivers or deferrals. Petitions for reconsideration of the decisions denying waivers are pending before the FCC. Resolution of these petitions and other FCC action with respect to these issues could affect demand for IPGs incorporated into set-top boxes or consumer electronics devices.

Legislative initiatives seeking to weaken copyright law or new governmental regulation or new interpretation of existing laws that cause resulting legal uncertainties could harm our business.

Consumer rights advocates and other constituencies continuously challenge copyright law, notably the U.S. Digital Millennium Copyright Act of 1998, or DMCA, through both legislative and judicial actions. Legal uncertainties surrounding the application of the DMCA may adversely affect our business. If copyright law is compromised, or devices that can circumvent our technology are permitted by law and become prevalent, this could result in reduced demand for our technologies, and our business would be harmed.

Many laws and regulations are pending and may be adopted in the United States, individual states and local jurisdictions and other countries with respect to the Internet. These laws may relate to many areas that impact our business, including copyright and other intellectual property rights, digital rights management, property ownership and taxation. These types of regulations are likely to differ between countries and other political and

geographic divisions. Other countries and political organizations are likely to impose or favor more and different regulation than that which has been proposed in the United States, thus furthering the complexity of regulations. In addition, state and local governments may impose regulations in addition to, inconsistent with, or stricter than federal regulations. Changes to or the interpretation of these laws could increase our costs, expose us to increased litigation risk, substantial defense costs and other liabilities or require us or our customers to change business practices. It is not possible to predict whether or when such legislation may be adopted, and the adoption of such laws or regulations, and uncertainties associated with their validity, interpretation, applicability and enforcement, could materially and adversely affect our business.

We may be subject to legal liability for the provision of third-party products, services or content.

We periodically enter into arrangements to offer third-party products, services, content or advertising under our brands or via distribution on our websites or in our products or service offerings. We may be subject to claims concerning these products, services, content or advertising by virtue of our involvement in marketing, branding, broadcasting or providing access to them. Our agreements with these parties may not adequately protect us from these potential liabilities. It is also possible that, if any information provided directly by us contains errors or is otherwise negligently provided to users, third parties could make claims against us, including, for example, claims for intellectual property infringement. Investigating and defending any of these types of claims is expensive, even if the claims do not result in liability. If any of these claims results in liability, we could be required to pay damages or other penalties, which could harm our business and our operating results.

The provision of certain of our products and services depends on the continuing operation of communications and transmission systems and mechanisms, including satellite, cable, wire, over the air broadcast communications and transmission systems and mechanisms. These communication and transmission systems and mechanisms are subject to significant risks and any damage to or failure of these systems and mechanisms could result in an interruption of the provision of our products and services.

Several of our major business operations are subject to interruption by earthquake, fire, power shortages, terrorist attacks and other hostile acts, and other events beyond our control. The majority of our research and development activities, our corporate headquarters, our principal information technology systems, and other critical business operations are located near major seismic faults. Our operating results and financial condition could be materially harmed in the event of a major earthquake or other natural or man-made disaster that disrupts our business. The communications and transmission systems and mechanisms that we depend on are not fully redundant, and our disaster recovery planning cannot account for all eventualities.

Our telephone and computer networks are subject to security and stability risks that could harm our business and reputation and expose us to litigation or liability.

Online business activities depend on the ability to transmit confidential information and licensed intellectual property securely over private and public networks. Any compromise of our ability to transmit such information and data securely or reliably, and any costs associated with preventing or eliminating such problems, could harm our business. Online transmissions are subject to a number of security and stability risks, including:

The occurrence of any of these or similar events could damage our business, hurt our ability to distribute products and services and collect revenue, threaten the proprietary or confidential nature of our technology, harm our reputation, and expose us to litigation or liability. Because some of our technologies and businesses are intended to inhibit use of or restrict access to our customers’ intellectual property, we may become the target of hackers or other persons whose use of or access to our customers’ intellectual property is affected by our technologies. We may be required to expend significant capital or other resources to protect against the threat of security breaches, hacker attacks or system malfunctions or to alleviate problems caused by such breaches, attacks or failures.

Our Internet-based product and service offerings rely on a variety of systems, networks and databases, many of which are maintained by us at our data centers. We do not have complete redundancy for all of our systems and we do not maintain real-time back-up of our data, so in the event of significant system disruption, particularly during peak periods, we could experience loss of data processing capabilities, which could cause us to lose customers and could harm our operating results. Notwithstanding our efforts to protect against “down time” for products and services, we do occasionally experience unplanned outages or technical difficulties. In order to provide our Internet-based products and services, we must protect the security of our systems, networks, databases and software.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired, which could increase our operating costs and affect our ability to operate our business.

We have a complex business that is international in scope. Ensuring that we have adequate internal financial and accounting controls and procedures in place to help ensure that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. We are continually in the process of documenting, reviewing and, if appropriate, improving our internal controls and procedures in connection with Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accountants on the effectiveness of our internal controls over financial reporting. If we or our independent registered public accountants identify areas for further attention or improvement, implementing any appropriate changes to our internal controls may require specific compliance training of our directors, officers and employees, entail substantial costs in order to modify our existing accounting systems, and take a significant period of time to complete. We have in the past identified, and may in the future identify, significant deficiencies in the design and operation of our internal controls, which have been or will in the future need to be remediated. Furthermore, our independent registered public accountants may interpret the Section 404 requirements and the related rules and regulations differently from how we interpret them, or our independent registered public accountants may not be satisfied with our internal control over financial reporting or with the level at which these controls are documented, operated or reviewed in the future. Finally, in the event we make a significant acquisition, or a series of smaller acquisitions, we may face significant challenges in implementing the required processes and procedures in the acquired operations. As a result, our independent registered public accountants may decline or be unable to report on the effectiveness of our internal controls over financial reporting or may issue a qualified report in the future. This could result in an adverse reaction in the financial markets due to investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements.

We will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could affect our operating results.

We have incurred, and will continue to incur, significant legal, accounting and other expenses associated with corporate governance and public company reporting requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC and NASDAQ. As long as the SEC requires the current level of compliance for public companies of our size, we expect these rules and regulations to require significant legal and financial compliance costs and to make some activities time-consuming and costly. These rules and regulations may make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage than was previously available. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

We may be subject to assessment of sales and other taxes for the sale of our products, license of technology or provision of services.

We do not currently collect sales or other taxes on the sale of our products, license of technology or provision of services in states and countries other than those in which we have offices or employees. Our business would be harmed if one or more states or any foreign country required us to collect sales or other taxes from past sales of products, licenses of technology or provision of services, particularly because we would be unable to go back to customers to collect sales taxes for past sales and would likely have to pay such taxes out of our own funds.

The market price of our common stock has been, and in the future could be, significantly affected by factors such as:

Announcements by satellite television operators, cable television operators, major content providers such as the MPAA or others regarding consumer electronics business combinations, evolving industry standards, consumer rights activists’ “wins” in government regulations or the courts, motion picture production or distribution or other developments could cause the market price of our common stock to fluctuate substantially.

There can be no assurance that our historic trading prices and price/earnings ratios, or those of technology companies in general, will be sustained. In the past, following periods of volatility in the market price of a company’s securities, some companies have been named in class action suits.

Further, the general stock market instability and economic uncertainty may adversely affect the global financial markets, which could cause the market price of our common stock to fluctuate substantially.

We publish non-GAAP financial measures in our quarterly earnings press releases along with a reconciliation of non-GAAP financial measures to those measures compiled in accordance with accounting principles generally accepted in the United States (“GAAP”). The reconciling items have adjusted GAAP net income and GAAP earnings per share for certain non-cash, non-operating or non-recurring items and are described in detail in each such quarterly earnings press release. We believe that this presentation may be more meaningful to investors in analyzing the results of operations and income generation as this is how our business is managed. The market price of our stock may fluctuate based on future non-GAAP results if investors base their investment decisions upon such non-GAAP financial measures. If we decide to curtail use of non-GAAP financial measures in our quarterly earnings press releases, the market price of our stock could be affected if investors analyze our performance in a different manner.

Most U.S. sales, marketing and technical personnel for all product divisions are in these locations, with a small number of individuals operating out of their home offices. We believe that our existing facilities are adequate to meet current requirements and that additional or substitute space will be available as needed to accommodate any expansion of operations.

We also lease space for sales, marketing and technical staff in New York, New York, Schaumburg, Illinois, Maidenhead, United Kingdom; Fribourg, Switzerland; Tokyo, Japan; Seoul, Korea; Amsterdam, The Netherlands; Hong Kong; Hsinchu, Taiwan; Luxemburg and Ontario, Canada.

We are involved in legal proceedings related to intellectual property rights and other matters. The following legal proceedings include those of Macrovision Solutions Corporation and its subsidiaries.

ODS Technologies, L.P. v. Magna Entertainment Corp., HRTV, Inc. and XpressBet, Inc., in the United States District Court for the Central District of California. On May 17, 2007, Gemstar’s subsidiary ODS Technologies, L.P. (“ODS”, which does business as TVG Network) filed a patent infringement complaint—and later, an amended complaint, against Magna Entertainment Corp. (“MEC”), HRTV, LLC (“HRTV”) and XpressBet, Inc. (“XpressBet”) in the United States District Court for the Central District of California. ODS asserts that defendants infringe five of its patents related to interactive off-track wagering systems. ODS seeks injunctive relief prohibiting further infringement by defendants as well as damages, including damages attributable to defendants’ allegedly willful infringement. In response, MEC, XpressBet and HRTV asserted that they do not infringe the subject patents, that the subject patents are invalid, and that the subject patents are unenforceable. On June 25, 2008, MEC and XpressBet filed a motion for summary judgment asserting that neither of them infringe the asserted claims of the ‘354 patent. The hearing date on that motion has been taken off calendar pending completion of discovery, which is ongoing. In connection with the divestiture of TVG Network, the purchaser agreed to assume liability for this matter.

Martin Henkel v. Battista, et al., in the Court of Chancery of the State of Delaware. On December 17, 2007, a purported stockholder class action lawsuit was filed against Gemstar and members of its Board of Directors alleging that the then-pending acquisition of Gemstar was unfair to its stockholders. The complaint contained a cause of action for breach of fiduciary duty against Gemstar and members of its Board of Directors. On February 1, 2008, the plaintiff filed an amended complaint, adding News Corporation as a defendant and asserting a cause of action against News Corporation for aiding and abetting breach of fiduciary duty. On March 14, 2008, the parties executed a Memorandum of Understanding, agreeing to a full settlement of the matter in exchange for certain supplemental public disclosures related to the proposed acquisition and attorney fees not to exceed $1.25 million. The court has approved the settlement and the amount has been paid by the Company. The settlement documents have been finalized, and the class members will receive notification of the settlement.

SuperGuide Corporation v. DirecTV Enterprises, Inc., et al., in the United States District Court for the Western District of North Carolina. On March 23, 2001, the Company’s subsidiary, Gemstar Development Corporation (“GDC”), was added as a third-party defendant in this case. Plaintiff SuperGuide Corporation’s (“SuperGuide”) complaint alleged patent infringement by DirectTV, EchoStar, Thomson Consumer Electronics (“Thomson”), and Hughes Electronics (collectively, the “Defendants”) with respect to three patents (the “SuperGuide Patents”) owned by SuperGuide but licensed to GDC. After being added as a party, GDC brought claims (i) against SuperGuide for declaratory relief and for breach of contract relating to a 1993 license agreement between SuperGuide and GDC; and (ii) against EchoStar for infringing the SuperGuide Patents within GDC’s defined fields of use. Pursuant to certain licensing and settlement agreements between GDC and EchoStar, the claims between GDC and EchoStar were dismissed with prejudice. During March 2007, the Court held a bench trial on the licensing issues in the case. On July 20, 2007, the Court ruled in favor of SuperGuide on those issues. In connection with that ruling, GDC’s counterclaims against SuperGuide for declaratory judgment and breach of contract were dismissed with prejudice. On October 20, 2008, SuperGuide’s claims against DirecTV and Thomson were dismissed with prejudice following a settlement between those parties. Both

DirecTV and Thomson had asserted purported indemnification rights against us during the course of the litigation, and following the settlement, both of those entities reiterated those rights and requested that we indemnify them for the amounts they paid in settlement, but we have not agreed to do so.

Thomson, Inc. v. Gemstar—TV Guide International, Inc., in the Superior Court of the State of Indiana for the County of Hamilton. On May 23, 2008, Thomson, Inc. (“Thomson”) initiated this action, seeking, among other things, indemnification from the Company in connection with the SuperGuide Corp v. DirecTV Enterprises, Inc. et. al matter discussed above. Thomson alleges that it entered into multiple agreements with the Company between 1996 and 2003 that would require the Company to indemnify Thomson in the SuperGuide litigation. Specifically, Thomson asserts causes of action for fraud/fraudulent inducement, breach of contract, breach of implied in fact indemnity and warranty of title against infringement, and unjust enrichment. Thomson seeks a declaration from the Court that the Company owes Thomson defense and indemnity for claims regarding the patents at issue in the SuperGuide matter, compensatory damages, including fees and expenses paid by Thomson in connection with the SuperGuide matter, the return of royalties paid by Thomson to the Company under the aforementioned agreements, pre and post-judgment interest, punitive damages, attorney fees, and costs of suit.

In April 2005, Gemstar received a notice of a potential claim for indemnification from DirecTV Group, Inc. (“DirecTV”) as a result of a lawsuit filed by Finisar Corporation (“Finisar”) against DirecTV in the United States District Court for the Eastern District of Texas. Finisar alleged that several aspects of the DirecTV satellite transmission system, including aspects of its advanced electronic program guide (“EPG”) and the storage, scheduling, and transmission of data for the EPG, infringed a Finisar patent. On July 7, 2006, the Court awarded Finisar approximately $117 million. In addition, the Court ordered DirecTV to pay approximately $1.60 per activated set top box in licensing fees going forward in lieu of an injunction until the expiration of Finisar’s patent in 2012. The parties both filed appeals to the Federal Circuit, which subsequently ruled that the trial court’s construction of certain terms of the patent was too broad, vacated the jury’s verdict of infringement, held that one of the seven patent claims at issue is invalid, and left standing the remaining six claims for reconsideration by the trial court. The appeals court also reversed the jury’s finding that DirecTV’s infringement was willful. The Company has not established a reserve with respect to this matter in its consolidated financial statements.

Comcast Cable Communications Corp., LLC v. Finisar Corporation, in the United States District Court for the Northern District of California. In support of a potential claim for indemnification, Comcast Cable Communications Corp., LLC (“Comcast”) put the Company on notice that it had received communications from Finisar Corporation (“Finisar”) asserting infringement of U.S. Patent 5, 404, 505 (the “‘505 patent”). On July 7, 2006, Comcast filed a declaratory judgment action in the Northern District of California asking the Court to rule, among other things, that it does not infringe the ‘505 patent and/or that the patent is invalid. On May 15, 2008, Finisar entered into a covenant and stipulation with Comcast, filed with the California Court, that it would not assert any claim of the ‘505 patent against Comcast or certain related entities, other than claim 25. On July 11, 2008, the Court ruled on Comcast’s summary judgment motion, finding that claim 25 is invalid, and therefore finding that Comcast’s non-infringement motion is moot. Comcast has not taken any further action insofar as its potential indemnity claim against the Company is concerned.

Youbet.com, Inc. v. ODS Technologies, L.P. and ODS Properties, Inc., American Arbitration Association. In this matter, filed December 9, 2008, the plaintiff alleges that the defendants overcharged them in wagering fees at various horse tracks, and claims damages in excess of $11.0 million dollars. In connection with the divestiture of TVG Network, the purchaser agreed to assume liability for this matter.

In addition to the items listed above, Macrovision Solutions Corporation is party to various legal actions, claims and proceedings incidental to its business. Macrovision Solutions Corporation has established loss provisions only for matters in which losses are probable and can be reasonably estimated. Some of the matters

pending against Macrovision Solutions Corporation involve potential compensatory, punitive or treble damage claims, or sanctions, that if granted, could require us to pay damages or make other expenditures in amounts that could have a material adverse effect on our financial position or results of operations. At this time management has not reached a determination that any of the matters listed above or Macrovision Solutions’ other litigation are expected to result in liabilities that will have a material adverse effect on our financial position or results of operations or cash flows.

In management’s opinion, none of these other disputes and legal actions is expected to have a material impact on our consolidated financial position, results of operations or cash flows.

We did not submit any matters to a vote of security holders during the quarter ended December 31, 2008.

We currently anticipate the Company will hold its annual meeting of stockholders in July 2009.

The common stock of Macrovision Solutions Corporation has been listed on the NASDAQ National Market under the symbol “MVSN” since May 2, 2008. As part of Macrovision Solution Corporations assumption of the ownership on May 2, 2008 of both Gemstar and Macrovision Corporation (See Note 1 to the Consolidated Financial Statements) Macrovision Corporation’s stock was delisted. The following table sets forth, for the periods indicated, the reported high and low closing prices for the common stock of Macrovision Solutions Corporation:

As of February 18, 2009, there were 302 holders of record of our common stock, based upon information furnished by American Stock Transfer & Trust Company, the transfer agent for our securities. We believe, based upon security positions listings, that there are approximately 49,549 beneficial owners of our common stock as of February 18, 2009. As of February 18, 2009, there were 100,970,031 shares of common stock outstanding.

The graph below shows a comparison of the cumulative total stockholder return on our common stock with the cumulative total return on the NASDAQ Composite Index (the “NASDAQ”), the S&P 500 Composite Index (the “S&P 500”) and the Russell 2000 Index (“Russell 2000”) from May 2, 2008 through December 31, 2008. The graph assumes an investment of $100 in our common stock and in each of the market indices, and further assumes the reinvestment of all dividends. The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock.

We have not declared or paid any cash dividends on our common stock since 1994. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. At this time, we intend to retain all earnings for use in our business operations and to pay down debt. Our Term Loan contains covenants limiting our ability to pay dividends. See “Liquidity and Capital Resources.”

During the fourth quarter of 2008 the Company repurchased 2.3 million shares of common stock for approximately $25.1 million. These repurchases were recorded as treasury stock and resulted in a reduction of stockholders’ equity. As of December 31, 2008, treasury stock consisted of 2.3 million shares of common stock that had been repurchased, with a cost basis of approximately $25.1 million.

The following table sets forth selected consolidated financial data and other operating information. The financial data does not purport to indicate results of operations as of any future date or for any future period. The financial data is derived from our consolidated financial statements and should be read in conjunction with the consolidated financial statements, related notes and other financial information included herein. For further discussion of factors that could affect comparability of these consolidated financial statements, see the notes following the table.

On December 6, 2007, Macrovision Corporation and Gemstar entered into an agreement for Macrovision Corporation to acquire Gemstar in a cash and stock transaction. Upon consummation of this transaction on May 2, 2008, Macrovision Solutions Corporation, a Delaware corporation founded in 2007, assumed ownership of both Gemstar and Macrovision Corporation. The Company’s results of operations include the operations of Gemstar from May 2, 2008, forward.

On April 1, 2008, the Company closed the sale of its Software and Games businesses. In the fourth quarter of 2008, the Company closed the sale of its TV Guide Magazine and eMeta businesses. On January 27, 2009, the Company closed the sale of its TVG Network business. The Company currently expects to close the sale of its TV Guide Network and TV Guide Online businesses in the first quarter of 2009. The results of operations and cash flows of Software, Games, TV Guide Magazine TV Guide Network, TV Guide Online, TVG Network and eMeta have been classified as discontinued operations, for all periods presented (See Note 4 to the Consolidated Financial Statements).

The following commentary should be read in conjunction with the Consolidated Financial Statements and related notes contained elsewhere in this Form 10-K.

The Company’s continuing operations provide a broad set of solutions that enable businesses to protect, enable and distribute their digital goods to consumers and allows consumers the ability to discover and manage digital media across multiple channels. With the Gemstar acquisition, our offerings now include IPGs. In addition to offering Company developed IPGs, our customers may also license our patents and deploy their own IPG or a third party IPG. We group our revenue into the following categories – (i) CE manufacturers, (ii) service providers (cable, satellite, telecommunications, mobile and internet service providers among others), and (iii) other. CE manufacturers deploy such Company products and services as Connected Platform, TV Guide On Screen, Guide Plus+, G-GUIDE, VCR Plus+, My TV Guide, G-Code, ShowView System, LASSO and Tapestry. Service providers deploy such Company products and service as Passport Echo, Passport DCT, Passport, Passport Applications, i-Guide, j-Guide, My TV Guide, TV Guide Mobile and G-Guide Mobile. Other includes our entertainment company content protection products and services such as ACP, RipGuard and BD+; AMG related web sites; and our business of licensing our extensive database of descriptive information about television, movie, music and game content.

Comparison of Years Ended December 31, 2008 and 2007 from continuing operations

The following tables present our 2008 results from continuing operations compared to the prior year (in thousands):

For the year ended December 31, 2008, revenue from the sale of our products and licensing of our patents to CE manufacturers increased significantly compared to the prior year. This was largely due to including revenue from products and services the Company obtained in the Gemstar acquisition. Legacy Gemstar products and patents contributed $74.5 million to revenue in 2008. We expect revenue from the licensing of our IPG products and patents to grow in the future primarily driven by new license agreements and increased sales of CE devices incorporating our products or patents. For the year ended December 31, 2008, legacy Macrovision revenue decreased by $9.2 million as compared to the prior year. This decrease was primarily due to the third quarter of 2007 including a significant set-top box licensing transaction.

For the year ended December 31, 2008, revenue from the sale of our products to service providers increased significantly compared to the prior year. This was largely due to including revenue from products and services the Company obtained in the Gemstar acquisition. Legacy Gemstar products and services contributed $118.1 million in revenues to 2008, primarily from the licensing of our IPG products and patents. We expect revenue from the licensing of our IPG products and patents to grow in the future as we continue to expand our licensing program internationally.

Other consists primarily of the licensing of our content protection technologies to entertainment companies and the licensing of our underlying media content/metadata. Other increased compared to the prior year primarily due to the Gemstar and the All Media Guide Holding, Inc. (“AMG”) acquisitions. The AMG acquisition occurred in December 2007. The data businesses acquired from Gemstar and the data and online business acquired from AMG contributed revenues of $17.6 million in 2008. These increases were partially offset by a decrease in content protection revenues from entertainment studios of $15.7 million, primarily due to price declines in new agreements.

For the year ended December 31, 2008, cost of revenues increased from the prior year, primarily due to additional costs associated with products and services acquired in the Gemstar acquisition. Also contributing to the increase are costs associated with AMG, which was acquired in December 2007.

For the year ended December 31, 2008, research and development expenses increased from the prior year primarily due to additional costs related to the Gemstar operations as well as AMG and BD+ research and development activities.

For the year ended December 31, 2008, selling, general and administrative increased from the prior year, primarily due to additional costs associated with the Gemstar operations. Also contributing to the increase in general and administrative costs were costs associated with the integration of Gemstar and an increase in stock compensation expense. We expect selling, general and administrative expenses as a percentage of revenue to decline in the future as we realize a full year of synergies from the Gemstar acquisition.

Depreciation and amortization increased from the same periods in the prior year due to the depreciation and amortization of intangible assets from the acquisitions of Gemstar, AMG and BD+ technology.

During the year ended December 31, 2007, we implemented several restructuring programs. These programs included the termination of research and development programs, the abandonment of certain facilities, an organizational structure change and the termination of our Hawkeye anti-piracy service. As a result of such programs, we recorded an aggregate charge of $4.5 million for the year ended December 31, 2007 which included severance costs, asset impairment costs and contract cancellation costs.

Interest expense increased compared to the same periods in the prior year due to the issuance of the $550 million Senior Secured Term Loan credit facility and the $100 million Senior Notes to finance the Gemstar acquisition.

During 2008, the Company sold its investment in Digimarc and recorded a gain of $5.2 million.

Interest income and other, net decreased as compared to the prior year due to lower prevailing interest rates and lower average cash and investment balances.

We recorded an income tax benefit of $20.2 million and income tax expense of $16.1 million for continuing operations for 2008 and 2007, respectively. This decrease from 2007 to 2008 was primarily a result of fluctuation in the geographic source of profits between the years and the reversal of accrued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”) liabilities.

Discontinued operations in 2008 includes Software, Games, eMeta, TV Guide Magazine, TV Guide Network, TV Guide Online and TVG Network. Discontinued operations in 2007 includes Software, Games and eMeta. The increase in the loss from discontinued operations is primarily due to $208.3 million in goodwill and intangible asset impairment charges related to TV Guide Network, TV Guide Online and TVG Network being recorded in 2008. These impairments were partially offset by $153.3 million in pre-tax net gains from the sale of our Software, Games and eMeta businesses.

Comparison of Years Ended December 31, 2007 and 2006 from continuing operations

The following table present our 2007 results from continuing operations compared to the prior year (in thousands):

Our revenues from CE Manufacturers for 2007 increased compared to 2006, primarily due to an increase in digital set-top boxes and other CE devices using our technology, and the inclusion of Mediabolic since January 1, 2007.

Our revenues from service providers for 2007 decreased compared to 2006, primarily due to a decline in perpetual content protection licenses signed in 2007 versus 2006.

Our other revenue decreased in 2007 compared to 2006, primarily due to a decrease in revenue from our entertainment content protection customers due to the loss of customers and lower pricing.

Cost of revenues were consistent with the prior year and did not increase in proportion to the growth in revenue since the majority of the revenue growth is from the sale of ACP to CE manufacturers.

Amortization of intangibles increased in 2007 as compared to 2006. The increase was primarily due to the amortization of intangibles from the acquisition of Mediabolic, SPDC and AMG, which we completed during the year ended December 31, 2007.

Research and development expenses in 2007 decreased, as compared to 2006, primarily due to the consolidation of research and development programs as a part of the 2007 restructuring programs and workforce reductions.

Selling, general and administrative expenses in 2007 increased, as compared to 2006, primarily due to increased commissions commensurate with the increase in revenue and higher costs, in general, to support the growth of the business.

During 2007, we implemented several restructuring programs. These programs included the termination of research and development programs, the abandonment of certain facilities, an organizational structure change and the termination of our Hawkeye anti-piracy service. As a result, we recorded an aggregate charge of $4.5 million for severance costs, asset impairment costs and contract cancellation costs.

Interest expense increased due to a full year of interest expense for the $240 million 2.625% Convertible Senior Notes due 2011.

The increase was primarily due to higher invested balances and higher interest rates earned in our portfolio.

We recorded income tax expense for continuing operations of $16.1 million and $9.8 million for 2007 and 2006, respectively. Income tax expense represents combined federal, foreign and state taxes at effective rates of 26% for 2007 and 24% for 2006. The rate increase from 2006 to 2007 was primarily a result of fluctuations in the geographic source of profits between years.

Discontinued operations in 2007 and 2006 includes Software, Games and eMeta. Loss from discontinued operation in 2007, as compared to income from discontinued operations in 2006, was primarily due to increased research and development costs related to Games, $14.6 million in restructuring and related asset impairment charges and a $7 million legal settlement charge in 2007.

Our cost of revenues consists primarily of service costs, replicator fees and patent prosecution, patent maintenance and patent litigation costs. Our research and development expenses are comprised primarily of employee compensation and benefits, tooling and supplies, our 49% share of the Guideworks joint venture and an allocation of overhead and facilities costs. We account for our 49% share of Guideworks as an operating expense in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 68, Research and Development Arrangements. Our selling and marketing expenses are comprised primarily of employee compensation and benefits, travel, advertising and an allocation of overhead and facilities costs. Our general and administrative expenses are comprised primarily of employee compensation and benefits, travel, accounting, tax and corporate legal fees and an allocation of overhead and facilities costs. Included in expenses for the year ended December 31, 2008, were $9.2 million of costs related to the transition and integration of legacy Gemstar businesses, products and employees.

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, allowance for doubtful accounts, equity-based compensation, goodwill and intangible assets, impairment of long lived assets and income taxes. Our estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

We have identified the accounting policies below as critical to our continuing business operations and the understanding of our results of operations.

We recognize revenue in accordance with current U.S. generally accepted accounting principles and with the guidelines of the SEC Staff Accounting Bulletin, or SAB, No. 101 as amended by SAB No. 104 Revenue recognition in Financial Statements. We also recognize revenue on software products in accordance with Statements of Position (“SOP”) 97-2, Software Revenue Recognition , as amended by SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.

Revenues from licensing video technology and trademarks are primarily generated from licensing agreements that generally pay a per-unit royalty fee for DVDs and digital set-top boxes. Licensees generally report replication activity within 30 to 60 days after the end of the month or quarter in which such activity takes place. Consequently, we recognize revenue from these licensing agreements on an as earned basis, provided amounts are fixed or determinable and collection is reasonably assured. The Company relies heavily on past experience and working relationships with these customers to reasonably and successfully estimate current period volume in order to calculate the period end revenue accrual. Any unusual or unanticipated replication volumes in a particular period can add significant fluctuations on the revenue reported. We have also entered into agreements with certain entertainment studios for which they have the right to ship an unlimited number of DVDs that utilize our ACP technology over a specified term for a flat fee. The Company records the revenue associated with these arrangements on a straight-line basis over the specified term.

The Company licenses its proprietary IPG technology to CE manufacturers and to service providers. The Company generally recognizes revenue from IPG product and patent licensing on a per-unit shipped model (with CE manufacturers) or a per subscriber model (with service providers). The Company’s recognition of revenues from per-unit license fees is based on units reported shipped by the manufacturer. CE manufacturers normally report their unit shipments to us in the quarter immediately following that of actual shipment by the licensee. Revenues from per-subscriber fees are recognized in the period the services are provided by a licensee, as reported to us by the licensee. Revenues from annual or other license fees are recognized based on the specific terms of the license arrangement. For instance, certain IPG licensees enter into agreements for which they have the right to ship an unlimited number of units over a specified term for a flat fee. The Company records the fees associated with these arrangements on a straight-line basis over the specified term.

Amounts for fees collected or invoiced and due relating to arrangements where revenue cannot be recognized are reflected on our balance sheet as deferred revenue and recognized when the applicable revenue recognition criteria are satisfied.

Revenue recognition requirements in the software industry are very complex and are subject to change. Our revenue recognition for our software products in our continuing operations continues to be one of our critical accounting policies because revenue recognition is based on complex rules which require us to make judgments and estimates. We generally recognize revenue when persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable and collectability is probable. However, determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue we report. For example, for multiple element arrangements we must make assumptions and judgments in order to allocate the total price among the various elements we must deliver, to determine whether undelivered services are essential to the functionality of the delivered products and services, to determine whether vendor-specific evidence of fair value exists for each undelivered element.

When licenses are sold together with consulting and/or implementation services, license fees are recognized upon delivery of the product provided that: (1) the above criteria have been met; (2) payment of the license fees is not dependent upon performance of the consulting and implementation services; and (3) the services are not essential to the functionality of the software. For arrangements where services are essential to the functionality of the software, both the license and services revenue are recognized in accordance with the provisions of SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. Arrangements

that allow us to make reasonably dependable estimates relative to contract costs and the extent of progress toward completion are accounted for using the percentage-of-completion method. Arrangements that do not allow us to make reasonably dependable estimates of costs and progress are accounted for using the completed-contracts method. Because the completed-contracts method precludes recognition of performance under the contract as the work progresses, it does not reflect current financial performance when the contract extends beyond one accounting period, and it therefore may result in uneven recognition of revenue, related cost of revenues and gross margin.

We provide consulting and training services to our customers. Revenue from such services is generally recognized as the services are performed, except in instances where services are included in an arrangement accounted for under SOP 81-1. Professional services revenues are included in services revenue in the accompanying consolidated financial statements.

We estimate the collectibility of our accounts receivable on an account-by-account basis. We record an increase in the allowance for doubtful accounts when the prospect of collecting a specific account receivable becomes doubtful. We specifically analyze accounts receivable and historical bad debts experience, customer creditworthiness, current economic trends, international situations (such as currency devaluation), and changes in our customer payment history when evaluating the adequacy of the allowance for doubtful accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

We currently use the Black-Scholes option pricing model to determine the fair value of stock options and employee stock purchase plan shares. The fair value of equity-based payment awards on the date of grant is determined by using an option-pricing model using a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. We estimate the volatility of our common stock by using a combination of historical volatility and implied volatility in market traded options.

The Black-Scholes option pricing model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. Existing valuation models, including the Black-Scholes and lattice binomial models, may not provide reliable measures of the fair values of our equity-based compensation. Consequently, there is a risk that our estimates of the fair values of our equity-based compensation awards on the grant dates may bear little resemblance to the actual values realized upon the exercise, expiration, early termination or forfeiture of those equity-based payments in the future. Certain equity-based payments, such as employee stock options, may expire worthless or otherwise result in zero intrinsic value as compared to the fair values originally estimated on the grant date and reported in our financial statements. Alternatively, value may be realized from these instruments that are significantly higher than the fair values originally estimated on the grant date and reported in our financial statements.

We hold investments in auction rate securities having contractual maturities of greater than one year and interest rate reset features of between 7 and 35 days. These auction rate securities were priced and subsequently traded as short-term investments because of the interest rate reset feature. Consequently, we have historically classified our auction rate securities as available for sale short-term investments at par.

As a result of recent adverse conditions in the financial markets, the auction rate securities we hold have failed to trade at recent auctions due to insufficient bids from buyers. We have therefore had to hold these securities beyond their scheduled auction reset dates. The short-term liquidity of these securities is currently

uncertain. As it is not possible to predict when auctions for the securities we hold will succeed in the future and because we have the ability and intent to hold our available-for-sale auction rate securities until the market recovers, we have reclassified our auction rate securities to long-term marketable securities on our Consolidated Balance Sheet as of December 31, 2008.

The Company owns auction rate securities it acquired through UBS AG with a Par value of $62.4 million. Due to the failure of the auction rate market in early 2008, UBS AG and other major banks entered into discussions with government agencies to provide liquidity to owners of auction rate securities. In December 2008, the Company entered into an agreement (the “Agreement”) with UBS AG which provides (1) the Company the right (“Put Option”) to sell these auction rate securities back to UBS AG at par, at the Company’s sole discretion, anytime during the period from June 30, 2010 through July 2, 2012, and (2) UBS AG the right to purchase these auction rate securities or sell them on the Company’s behalf at par anytime through July 2, 2012. The Company elected to measure the Put Option under the fair value option of SFAS No. 159, recorded income of approximately $10.4 million pre-tax, and recorded a corresponding long term investment. Simultaneously, the Company transferred these auction rate securities from available-for-sale to trading investment securities. As a result of this transfer, the Company recognized an other-than-temporary impairment loss of approximately $10.4 million pre-tax, reflecting a reversal of the related temporary valuation allowance that was previously recorded in other comprehensive loss. The recording of the Put Option and the recognition of the other-than-temporary impairment loss resulted in no material impact to the Consolidated Statement of Operations for the year ended December 31, 2008. The Company anticipates that any future changes in the fair value of the Put Option will be offset by the changes in the fair value of the related auction rate securities with no material net impact to the Consolidated Statement of Operations. The Put Option will continue to be measured at fair value utilizing Level 3 inputs until the earlier of its maturity or exercise. The Company’s auction rate securities which were not purchased from this investment firm continue to be classified as available-for-sale securities.

The fair values of these securities are estimated utilizing a discounted cash flow analysis or other type of valuation model as of December 31, 2008 rather than at par. These analyses are highly judgmental and consider, among other items, the likelihood of redemption, credit quality, duration, insurance wraps and expected future cash flows. These securities were also compared, when possible, to other observable market data with similar characteristics to the securities held by us.

Temporary declines in fair value for our available-for-sale auction rate securities, which we attribute to market liquidity issues rather than credit issues, are recorded in accumulated other comprehensive income. Any future fluctuation in fair value related to these instruments that we deem to be temporary, including any recoveries of previous write-downs, would be recorded to accumulated other comprehensive income. If we determine that any future valuation adjustment is other than temporary, we will record a charge to earnings as appropriate.

Goodwill represents the excess of cost over fair value of assets of businesses acquired. We account for goodwill under the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

Goodwill and intangible assets not subject to amortization are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the assets might be impaired. In connection with our impairment analysis performed annually in our fourth quarter, we are required to perform an assessment of whether there is an indication that goodwill is impaired. To accomplish this, we are required to determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing

goodwill and intangible assets, to those reporting units. We determine the fair value of each reporting unit using the discounted cash flow approach and a market based approach. To the extent the carrying amount of a reporting unit exceeds its fair value, we would be required to perform the second step of the impairment analysis, as this is an indication that the reporting unit goodwill may be impaired. In this step, we compare the implied fair value of the reporting unit goodwill with the carrying amount of the reporting unit goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit to all of the assets (recognized and unrecognized) and liabilities of the reporting unit in a manner similar to a purchase price allocation, in accordance with SFAS No. 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. To the extent the implied fair value of goodwill of each reporting unit is less than its carrying amount we would be required to recognize an impairment loss. The process of evaluating the potential impairment of goodwill is subjective and requires judgment at many points during the test including future revenue forecasts, discount rates and various reporting unit allocations.

In accordance with SFAS No. 144, long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposal group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

We account for income taxes using the asset and liability method of SFAS 109, Accounting for Income Taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year and for deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. We account for uncertainty in income taxes using the cumulative probability method under FIN 48. Management must make assumptions, judgments and estimates to determine our current provision for income taxes and also our deferred tax assets and liabilities and any valuation allowance to be recorded against a deferred tax asset. Our judgments, assumptions and estimates relative to the current provision take into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amount provided for income taxes in our consolidated financial statements.

We finance our operations primarily with cash generated by operations, principally from our IPG and content protection products. Our continuing operating activities provided net cash of $55.4 million, $67.1 million and $68.9 million in 2008, 2007 and 2006, respectively. Cash provided by continuing operating activities decreased $11.7 million in 2008 from 2007, primarily due to payment of severance related to the Gemstar acquisition (see Note 8 to the Consolidated Financial Statements). The availability of cash generated by our operations in the future could be affected by other business risks discussed in the “Risk Factors” section of this annual report.

Investing activities of continuing operations used net cash of $592.4 million, $128.5 million and $267.4 million in 2008, 2007 and 2006, respectively. The increase in cash used in 2008, as compared to 2007, was primarily due to the Gemstar acquisition, partially offset by the proceeds from the sale of Software and Games

(see Note 3 and Note 4 to the Consolidated Financial Statements). During 2007, we used $129.8 million in cash for acquisitions for our continuing operations, which was offset by the release of restricted cash of $12 million and net purchases of long- and short-term marketable securities.

Net cash provided by financing activities was $594.0 million, $15.7 million and $206.4 million in 2008, 2007 and 2006, respectively. The increase in net cash provided by financing activities in 2008 was primarily due to the receipt of $615 million in net debt proceeds to fund the Gemstar acquisition, partially offset by a $59.1 million decrease in proceeds from exercise of options and stock issued under the ESPP.

In September 2007, the Board of Directors of Macrovision Corporation authorized a stock repurchase program, which allows the Company to purchase up to $60.0 million of the Company’s common stock in the open market from time to time at prevailing market prices or otherwise, as conditions warrant. On May 5, 2008, the Board of Directors of Macrovision Solutions Corporation reconfirmed this stock purchase program. During the fourth quarter of 2008 the Company repurchased 2.3 million shares of common stock for approximately $25.1 million. These repurchases were recorded as treasury stock and resulted in a reduction of stockholders’ equity. As of December 31, 2008, treasury stock consisted of 2.3 million shares of common stock that had been repurchased, with a cost basis of approximately $25.1 million.

In connection with the Gemstar acquisition Macrovision Solutions Corporation and Macrovision Corporation, as co-obligors, entered into a $550 million five year senior secured term loan credit facility (“Term Loan”). As of December 31, 2008, $547.3 million was outstanding. The Term Loan is guaranteed by Company domestic subsidiaries, and the assets and shares of Company domestic subsidiaries are pledged as collateral against the Term Loan. The Company is required to use the proceeds from asset sales of $75 million or more to pay down the Term Loan; proceeds from assets sales of less than $75 million may be retained for investment in fixed or capital assets. The Company may elect to pay interest at a rate of (i) libor plus 3.75%, with a libor floor of 3.5% or (ii) the Term Loan administrative agent’s prime rate plus 2.75%. As of December 31, 2008, the interest rate is 6.0%. The Term Loan includes customary covenants, including total leverage ratio limits, fixed charge coverage minimums and restrictions on additional debt incurrance and dividend payments among others. The Company is required to make principal payments of $5.5 million each year with the remaining balance due May 2013. As of December 31, 2008, the Company was in compliance with the Term Loan debt covenants.

In the event (i) the Company’s leverage ratio is greater than 2.5 to 1.0, and (ii) more than $50 million in aggregate principal amount of the 2.625% convertible senior notes due 2011 (the “Convertible Notes”) is still outstanding, and (iii) the scheduled maturity of the Convertible Notes is more than 181 days in the future, then our Term Loan will become due on that 182nd day prior to the Convertible Notes’ maturity date.

In connection with the Gemstar acquisition Macrovision Solutions Corporation and Macrovision Corporation, as co-obligors, issued $100 million aggregate principal amount of 11% senior notes (“Senior Notes”) due 2013. The Senior Notes include customary covenants, including fixed charge coverage minimums and restrictions on acquisitions, additional debt incurrance and dividend payments among others. Interest is payable at 11% semiannually in arrears on November 15 and May 15. Provided that the Term Loan has been repaid, the Company may redeem some or all of the Senior Notes at any time on or after November 15, 2009 at a price equal to 100% of the principal amount of notes to be redeemed. In addition, provided that the Term Loan has been repaid, the Company may redeem the Senior Notes in whole or in part at any time before November 15, 2009 at a redemption price plus a “make-whole” premium. The Company must offer to purchase the Senior Notes if it experiences specific kinds of changes of control or sells assets under certain circumstances.

In August 2006, the Company issued, in a private offering, $240.0 million in 2.625% convertible senior notes due 2011at par (“Convertible Notes”) . The Convertible Notes may be converted, under certain circumstances described below, based on an initial conversion rate of 35.3571 shares of common stock per $1,000 principal amount of notes (which represents an initial conversion price of approximately $28.28 per share).

after the calendar quarter ending September 30, 2006, if the last reported sale price of the Company’s common stock for at least 20 trading days during the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 120% of the applicable conversion price in effect on the last trading day of the immediately preceding fiscal quarter; (ii) during the five business-day period after any ten consecutive trading-day period (the “measurement period”) in which the trading price per note for each day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such day; or (iii) upon the occurrence of specified corporate transactions, as defined in the indenture. From June 15, 2011 until the close of business on the scheduled trading day immediately preceding the maturity date of August 15, 2011, holders may convert their Convertible Notes into cash and shares of the Company’s common stock, if any, at the applicable conversion rate, at any time, regardless of the foregoing circumstances.

Upon conversion, a holder will receive the conversion value of the Convertible Notes converted equal to the conversion rate multiplied by the volume weighted average price of the Company’s common stock during a specified period following the conversion date. The conversion value of each Convertible Note will be paid in: (i) cash equal to the lesser of the principal amount of the Convertible Note or the conversion value, as defined, and (ii) to the extent the conversion value exceeds the principal amount of the Convertible Note, a combination of common stock and cash. In addition, upon a fundamental change at any time, as defined, the holders may require the Company to repurchase for cash all or a portion of their Convertible Notes upon a “designated event” at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus accrued and unpaid interest, if any.

In January 2009 we closed the sale of our TVG Network business and we currently expect to close the sale of our TV Guide Network and TV Guide Online businesses in the first quarter of 2009. We will utilize net proceeds from these sales to pay down our Senior Secured Term Loan Credit Facility following their respective closings.

As of December 31, 2008, we had $199.2 million in cash and cash equivalents, $77.9 million in short-term investments, and $85.0 million in long-term marketable securities. We anticipate that capital expenditures to support the growth of our business and strengthen our operations infrastructure will be between $15 million and $20 million in 2009.

As of December 31, 2008, we held auction rate securities with a fair value of $66.3 million and par value of $79.5 million. Our auction rate securities portfolio includes solely AAA rated investments, comprised of federally insured student loans and municipal and educational authority bonds. However, the auction rate securities we hold have failed to trade at recent auctions due to insufficient bids from buyers. This limits the short-term liquidity of these instruments and may limit our ability to liquidate and fully recover the carrying value of our auction rate securities if we needed to convert some or all to cash in the near term. These developments may result in an impairment charge to earnings if future auctions fail and credit ratings deteriorate as a result. We believe that based upon our current other cash and cash equivalent balances, the current lack of liquidity in the auction rate securities market will not have a material impact on our liquidity or our ability to fund our operations.

Included in the above are auction rate securities acquired through UBS AG with a par value of $62.4 million. Due to the failure of the auction rate market in early 2008, UBS and other major banks entered into discussions with governmental agencies to provide liquidity to owners of auction rate securities. In December 2008, the Company entered into an agreement with UBS which provides (1) the Company the right to sell these auction rate securities back to UBS AG at par, at the Company’s sole discretion, anytime during the period from June 30, 2010 through July 2, 2012, and (2) UBS AG the right to purchase these auction rate securities or sell them on the Company’s behalf at par anytime through July 2, 2012. (See Note 1 to the Consolidated Financial Statements).

We believe that cash flows generated from operations will be sufficient to meet our working capital, capital expenditure and debt requirements for the foreseeable future.

The collective results from all discontinued operations were as follows (in thousands):

Software focused on independent software vendors and enterprise IT departments with solutions including the FLEXnet suite of electronic license management, electronic license delivery and software asset management products; InstallShield and other installer products; and AdminStudio software packaging tools. The sale of Software closed on April 1, 2008.

Games focused on providing tools and services needed to facilitate the digital distribution of providers of digital goods. Games pre-tax loss in 2007 included $13.2 million of restructuring charges and asset impairment charges. The sale of Games closed on April 1, 2008.

eMeta provided software solutions that enable companies to manage and sell digital goods and services online. eMeta pre-tax loss in 2008 included $6.7 million in goodwill and intangible asset impairment charges. The sale of eMeta closed in November 2008.

TV Guide Magazine’s weekly publication was centered on TV-related news, feature stories, TV celebrity photos, behind-the-scenes coverage, reviews and recommendations and national television listings. The sale of TV Guide Magazine closed in December 2008.

TVG Network generated revenue primarily from wagering and licensing fees. TVG Network pre-tax loss in 2008 included $70.0 million in goodwill and intangible asset impairment charges. The sale of TVG Network closed in January 2009.

TV Guide Network and TV Guide Online generated revenue primarily from advertising and carriage fees. TV Guide Network and TV Guide Online pre-tax loss in 2008 included $138.3 million in goodwill and intangible asset impairment charges. The sale of TV Guide Network and TV Guide Online is expected to close in the first quarter of 2009.

The following table summarizes Macrovision’s contractual obligations at December 31, 2008 (in thousands):

Operating leases in the above table have been included on a gross basis. The Company has agreements to receive approximately $24.4 million under operating subleases. Excluded from the table above is a capital lease for a satellite transponder used by the Company’s TV Guide Network business, which is included in assets held for sale on the December 31, 2008 Consolidated Balance Sheet. Payments under this lease are $1.6 million each year through 2019.

We are exposed to financial market risks, including changes in interest rates, foreign currency exchange rates and security investments. Changes in these factors may cause fluctuations in our earnings and cash flows. We evaluate and manage the exposure to these market risks as follows:

Fixed Income Investments: We have an investment portfolio of money market funds and fixed income securities, including those classified as cash equivalents, short-term investments and long-term marketable investment securities of $324.8 million as of December 31, 2008. Most of these securities are subject to interest rate fluctuations. An increase in interest rates could adversely affect the market value of our fixed income securities while a decrease in interest rates could adversely affect the amount of interest income we receive.

Our investment portfolio consists principally of investment grade municipal bonds, money market mutual funds, U.S. Treasury and agency securities, corporate bonds, commercial paper and auction rate securities. We regularly monitor the credit risk in our investment portfolio and take appropriate measures to manage such risks prudently in accordance with our investment policies.

As a result of recent adverse conditions in the financial markets, auction rate securities may present risks arising from liquidity and/or credit concerns. At December 31, 2008, the fair value of our auction rate securities portfolio totaled approximately $66.3 million. Our auction rate securities portfolio includes solely AAA rated investments, comprised of federally insured student loans and municipal and educational authority bonds. However, the auction rate securities we hold have failed to trade at recent auctions due to insufficient bids from buyers. If there are future unsuccessful auctions, it may result in us having to hold these securities beyond their scheduled auction reset dates, limiting the short-term liquidity of these securities. In addition, the credit ratings of these investments may deteriorate and as a result the fair value of these auction rate securities may decline and we may incur impairment charges in connection with these securities which would adversely impact our earnings and financial condition.

We do not use derivative financial instruments in our investment portfolio to manage interest rate risk. We limit our exposure to interest rate and credit risk, however, by establishing and strictly monitoring clear policies and guidelines for our fixed income portfolios. The primary objective of these policies is to preserve principal while at the same time maximizing yields, without significantly increasing risk. A hypothetical 50 basis point increase in interest rates would result in a $0.1 million decrease in the fair value of our fixed income available-for-sale securities as of December 31, 2008.

Foreign Currency Exchange Rates. Due to our reliance on international and export sales, we are subject to the risks of fluctuations in currency exchange rates. Because a substantial majority of our international and export revenues, as well as expenses, are typically denominated in U.S. dollars, fluctuations in currency exchange rates could cause our products to become relatively more expensive to customers in a particular country, leading to a reduction in sales or profitability in that country. Many of our subsidiaries operate in their local currency, which mitigates a portion of the exposure related to the respective currency collected.

Indebtedness. The Company has three debt instruments outstanding: a $550 million Senior Credit Facility Term Loan (current balance outstanding $547.3 million), a $100 million Senior Note and $240 million Senior Convertible Notes. The terms of these debt instruments are more fully described in Note 6 to the Consolidated Financial Statements.

The information required by this item is submitted in a separate section of this report beginning on F-1 of this report.

Under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our internal control over financial reporting includes those policies and procedures that:

Our management assessed the effectiveness of our system of internal control over financial reporting as of December 31, 2008. In making this assessment, we used the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our assessment and the criteria set forth by COSO, we believe that Macrovision maintained effective internal control over financial reporting as of December 31, 2008.

The effectiveness of our internal control over financial reporting as of December 31, 2008 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Our system of internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

All internal control systems, no matter how well designed and operated, can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management does not expect that our disclosure controls and procedures will prevent all error and fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within the company have been detected, even with respect to those systems of internal control that are determined to be effective. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Our system contains self monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.

The Audit Committee of the Board of Directors, which is comprised solely of independent directors, has oversight responsibility for our financial reporting process and the audits of our consolidated financial statements and internal control over financial reporting. The Audit Committee meets regularly with management and with our internal auditors and independent registered public accounting firm (collectively, the “accountants”) to review matters related to the quality and integrity of our financial reporting, internal control over financial reporting (including compliance matters related to our Code of Personal and Business Conduct and Ethics), and the nature, extent, and results of internal and external audits. Our accountants have full and free access and report directly to the Audit Committee. The Audit Committee recommended, and the Board of Directors approved, that the audited consolidated financial statements be included in this Annual Report on Form 10-K.

During the quarter ended December 31, 2008, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, these controls.

We have audited Macrovision Solutions Corporation’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Macrovision Solutions Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Macrovision Solutions Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Macrovision Solutions Corporation as of December 31, 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2008 of Macrovision Solutions Corporation and our report dated February 23, 2009 expressed an unqualified opinion thereon.

Our board of directors currently consists of seven members, all of whom except for our chief executive officer are “independent” under applicable rules of the Securities and Exchange Commission (“SEC”). Our bylaws provide that our board of directors shall have not less than five members, with the exact number of directors to be fixed from time to time by the board of directors. There are no family relationships among our executive officers and directors.

The names of the current directors, their ages as of February 15, 2009 and other information about them are shown below.

The “Director Since” column above denotes the year in which such member joined as a director of Macrovision Solutions Corporation or one of its subsidiaries, Macrovision Corporation or Gemstar-TV Guide International, Inc.

Alfred J. Amoroso. Mr. Amoroso joined Macrovision as our President and Chief Executive Officer and member of the Board of Directors in July 2005. From September 2004 to June 2005, Mr. Amoroso served as an advisor to Warburg Pincus, an investment firm. From July 2002 to August 2004, Mr. Amoroso served as the President, Chief Executive Officer and Vice Chairman of META Group, an information technology research and advisory firm. From October 1999 until its merger with IBM in January 2002, Mr. Amoroso served as President, Chief Executive Officer and a director of CrossWorlds Software, Inc. Mr. Amoroso holds a B.S. in systems engineering and M.S. in operations research from Polytechnic Institute of Brooklyn.

Andrew K. Ludwick. Mr. Ludwick has served as our Chairman of the Board since May 2008. Mr. Ludwick has been a private investor since November 1997. Mr. Ludwick served as Chief Executive Officer of Bay Networks, a networking company, from September 1995 to October 1997. From July 1985 to September 1995, Mr. Ludwick was founder, President and Chief Executive Officer of SynOptics, an internetworking company. Mr. Ludwick holds a B.A. from Harvard College and an M.B.A. from Harvard Business School. Mr. Ludwick serves on the board of directors of Zebra Technologies Corporation, a provider of on-demand printing solutions.

Alan L. Earhart. Mr. Earhart retired as partner of PricewaterhouseCoopers LLP in 2001. From 1970 to 2001, Mr. Earhart held a variety of positions with Coopers & Lybrand and its successor entity, PricewaterhouseCoopers LLP, an accounting and consulting firm, including most recently as the Managing Partner for PricewaterhouseCoopers’ Silicon Valley office. Mr. Earhart holds a B.S. degree in accounting from the University of Oregon. Mr. Earhart serves on the board of directors of Monolithic Power Systems, Inc., a semiconductor company, NetApp, a computer storage and data management company, and Brocade Communications Systems Inc., a data center networking solutions company.

Robert J. Majteles. Mr. Majteles has been the managing partner of Treehouse Capital LLC, an investment firm, since 2001. In addition, Mr. Majteles is a lecturer at both the graduate and undergraduate levels at U.C. Berkeley. Mr. Majteles holds a B.A. from Columbia University and a J.D. from Stanford University. Mr. Majteles serves on the boards of directors of Adept Technology, Inc., Comarco, Inc.; Merriman, Curhan & Ford; Unify Corporation and U.S. Auto Parts Network, Inc.

James E. Meyer. Mr. Meyer has been at Sirius Satellite Radio as President of Operations and Sales since April 2004. From December 2001 until 2002, Mr. Meyer served as special advisor to the Chairman of Thomson Multimedia, Inc. (“Thomson”). From January 1997 until December 2001, Mr. Meyer served as the Senior Executive Vice President for Thomson as well as Chief Operating Officer for Thomson Consumer Electronics. Mr. Meyer holds a B.S. in economics and an MBA from St. Bonaventure University.

James P. O’Shaughnessy. Mr. O’Shaughnessy has conducted a consulting practice in the field of intangible asset management since 2004. From 1996 to 2004, Mr. O’Shaughnessy served as Vice President and Chief Intellectual Property Counsel at Rockwell Automation. Mr. O’Shaughnessy holds a B.S. in materials engineering from Rensselaer Polytechnic Institute and a J.D. from Georgetown University Law Center.

Ruthann Quindlen. Ms. Quindlen has been a general partner or managing member of Funds VI-VIII with Institutional Venture Partners (IVP), a Silicon Valley investment firm, since September 1993. At IVP, Ms. Quindlen works with her partners to evaluate ongoing investments in IVP portfolio companies. Ms. Quindlen holds a B.S. in Foreign Service from Georgetown University and an MBA from the Wharton School of the University of Pennsylvania.

The names of our current executive officers, their ages as of February 15, 2009, and their positions are shown below. Biographical summaries of each of our executive officers who are not also members of our board of directors are included below.

For a biography of Alfred J. Amoroso, please see above in “Information About Our Board of Directors.”

James Budge. Mr. Budge has served as our Chief Financial Officer since September 2005. Mr. Budge served as Chief Financial Officer of Trados, Inc., an enterprise management software provider, from January 2004 until its merger with SDL International in August 2005. From August 2002 until joining Trados, Mr. Budge served as Chief Financial Officer of Sendmail, Inc., a secure email provider, and from April 1999 until its merger with IBM in January 2002, Mr. Budge served as Chief Financial Officer of CrossWorlds Software, Inc., a provider of business infrastructure software. Mr. Budge holds a B.S. in Accounting from Brigham Young University and is a Certified Public Accountant.

Thomas Carson. Mr. Carson has served as our Executive Vice President, Worldwide Sales & Services since May 2008 when the acquisition of Gemstar-TV Guide International by Macrovision was completed. From April 2006 to May 2008, Mr. Carson served in various capacities at Gemstar, including President of the North American IPG business and President for North American CE business. From February 2005 to April 2006, Mr. Carson served as Executive Vice President of Operational Efficiency programs at Thomson Multimedia Corporation and from February 2004 to February 2005, he served as Executive Vice President, Global Sales and Services at Thomson. Mr. Carson holds a B.S in business administration and an MBA from Villanova University.

Stephen Yu. Mr. Yu has served as our Executive Vice President, General Counsel and Corporate Secretary since May 2006. He served as Vice President, General Counsel and Secretary of Aspect Communications Corporation, a provider of contact center solutions, from April 2003 until its acquisition by Concerto Software, Inc. in September 2005. From June 2002 to January 2003, Mr. Yu served as Vice President, General Counsel and Secretary of Riverstone Networks, Inc., a provider of ethernet network solutions, and from September 1999 to May 2002, he served as Vice President, General Counsel and Secretary of Palm, Inc., a provider of mobile computing solutions. Mr. Yu holds a B.S. in electrical engineering from Purdue University and a J.D. cum laude from Georgetown University Law Center. Mr. Yu is a member of the California State Bar.

In accordance with Section 16(a) of the Securities Exchange Act of 1934 and the regulations of the Securities and Exchange Commission, our directors, executive officers and holders of more than 10% of our common stock are required to file reports of ownership and changes in ownership with the Securities and Exchange Commission and Nasdaq and to furnish us with copies of all of the reports they file.

To the best of our knowledge, based solely on a review of the copies of such forms and certifications furnished to us from the reporting persons, we believe that all filing requirements applicable to our directors and executive officers were timely met.

Code of Conduct. In February 2004, we adopted our Code of Personal and Business Conduct and Ethics (the “Code of Conduct”) as required by applicable securities laws, rules of the SEC and the listing standards of Nasdaq. The Code of Conduct applies to all of our directors and employees, including the principal executive officer, principal financial officer and principal accounting officer. A copy of such code of conduct and ethics was filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 2003. If we make any substantive amendments to the code of conduct and ethics or grant any waiver, including implicit waiver, from a provision of the code of conduct and ethics to our principal executive officer, principal financial officer or principal accounting officer, we will disclose the nature of such amendment or waiver on our website at www.macrovision.com or in a current report on Form 8-K that will be publicly filed.

Corporate Governance Guidelines and Committee Charters. In February 2009, we adopted our Corporate Governance Guidelines to assist the Board in following corporate practices that serve the best interest of the company and its stockholders. Our Corporate Governance Guidelines and the charters of each of our audit committee, compensation committee and corporate governance and nominating committee are available at our website at www.macrovision.com.

Our board of directors held seven meetings in 2008 and acted by unanimous written consent nine times. Except for Mr. Meyer, each director attended at least 75% of (i) the meetings of our board of directors that were held during the time he or she was a director in 2008 and (ii) the meetings of the committees of our board of directors that were held during the time he or she was a member of such committee during 2008. As part of each

regularly scheduled board meeting, the independent members of our board of directors hold a separate meeting that employee and affiliated directors and other members of management do not attend. Our board of directors has an audit committee, a compensation committee and a corporate governance and nominating committee.

Although we do not have a formal policy regarding attendance by members of the board of directors at the annual meeting, we encourage directors to attend and historically all have done so.

The members of the audit committee are Alan Earhart, Robert J. Majteles, James Meyer and Ruthann Quindlen, each of whom meets the independence and other requirements to serve on our audit committee under SEC rules and the listing standards of Nasdaq. Mr. Earhart is the chair of the audit committee. Our board of directors has determined that Mr. Earhart is an “audit committee financial expert” as defined by the rules of the SEC and also meets Nasdaq’s professional experience requirements. The audit committee met five times and acted by unanimous written consent two times in 2008.

Our board of directors has adopted a charter governing the duties and responsibilities of the audit committee. A copy of the audit committee charter is available on our website at www.macrovision.com. The principal function of the audit committee is to assist our board of directors in its oversight responsibilities relating to our financial accounting, reporting and controls. The audit committee monitors and evaluates periodic reviews of the adequacy of the accounting and financial reporting processes and systems of internal control that are conducted by our financial and senior management and our independent registered public accounting firm; is responsible for the appointment, compensation and monitoring of the work of our independent registered public accounting firm; reviews and evaluates the qualifications, independence and performance of our independent registered public accounting firm; monitors our compliance with legal and regulatory requirements; monitors the performance of our internal audit function; and facilitates communication among our independent registered public accounting firm, our financial and senior management and our board of directors.

The members of the compensation committee are Robert J. Majteles, James O’Shaughnessy and Ruthann Quindlen, each of whom meets the independence and other requirements to serve on our compensation committee under SEC rules and the listing standards of Nasdaq. Mr. O’Shaughnessy is the chair of the compensation committee. The compensation committee met six times in 2008 and acted by unanimous written consent two times in 2008.

Our board of directors has adopted a charter governing the duties and responsibilities of the compensation committee. Our compensation committee charter is available on our website at www.macrovision.com. The principal functions of the compensation committee are to review and approve our incentive compensation programs for all executive-level direct reports of the chief executive officer and review and recommend the annual compensation for the chief executive officer to the board of directors for approval. The compensation committee reviews and approves all compensation (including the adjustment of base salary each year) and all bonus and other incentive compensation programs for our executive-level officers (other than our chief executive officer), and authorizes all awards to our executive-level officers under those programs. The compensation committee also approves any employment severance or termination arrangement with any executive-level officer (other than our chief executive officer). All decisions regarding the compensation of our chief executive officer are reviewed by the compensation committee, which then recommends such compensation to the full board of directors for approval. The chief executive officer abstains from voting on approval of his own compensation and such approval is made by the remaining members of the board of directors, all of whom are “independent” under applicable rules of the SEC.

The compensation committee meets with our chief executive officer and executive vice president of human resources at the beginning of each fiscal year to discuss the incentive compensation programs to be effective for that fiscal year. The agenda for each compensation committee meeting is determined by the chairman of our

compensation committee with the assistance of our chief executive officer, general counsel and executive vice president of human resources. The compensation committee may delegate to subcommittees any power and authority of the compensation committee, and such subcommittees have the sole authority to assist the compensation committee in carrying out its responsibilities, including the sole authority to approve any consultant fees.

The members of the corporate governance and nominating committee are Andrew K. Ludwick and Robert J. Majteles, each of whom meets the independence and other requirements to serve on our corporate governance and nominating committee under SEC rules and the listing standards of Nasdaq. Mr. Ludwick is the chair of the corporate governance and nominating committee. The corporate governance and nominating committee met three times in 2008.

Our board of directors has adopted a charter governing the duties and responsibilities of the corporate governance and nominating committee. Our corporate governance and nominating committee charter is available on our website at www.macrovision.com. The principal functions of the corporate governance and nominating committee are to advise and make recommendations to our board of directors on matters concerning corporate governance, review potential or actual conflicts of interest involving members of our board of directors, help identify, evaluate and recruit candidates to fill vacancies on our board of directors, identify the nominees for election to our board of directors at the annual meeting of stockholders and oversee the evaluation of members of our board of directors.

Director Qualifications. The corporate governance and nominating committee reviews, evaluates and proposes prospective candidates for our board of directors. Each member of our board of directors must have broad experience and business acumen, a record of professional accomplishment in his or her field, and demonstrated honesty and integrity consistent with our values. In evaluating director nominees, the corporate governance and nominating committee considers a variety of factors, including the appropriate size of the board of directors, our needs with respect to the particular talents and experience of the directors, the nominee’s experience and understanding of our business and industry, familiarity with national and international business matters, strategic thinking and willingness to share ideas, network of contacts, experience with accounting rules and practices, and diversity of professional expertise and experience beneficial to the achievement of our strategic goals. The corporate governance and nominating committee may also consider such other factors as it may deem are in the best interests of our company and our stockholders. The corporate governance and nominating committee understands that it is necessary for at least one, and preferably for several, members of the board to meet the criteria for an “audit committee financial expert” as defined by SEC rules and for a majority of the members of the board to meet the definition of “independent director” under the listing standards of Nasdaq.

Identifying Nominees. The corporate governance and nominating committee identifies nominees by first identifying the desired skills and experience of a new nominee based on the qualifications discussed above. The corporate governance and nominating committee may identify potential nominees based upon suggestions by non-employee members of the board, senior level executives, individuals personally known to the members of the board, third-party search firms and/or stockholders, and evaluate those persons on its own. The corporate governance and nominating committee does not evaluate proposed nominees differently depending upon who has made the proposal. In 2008, we did not pay any fees or expenses to any third party to assist in this process.

Stockholder Nominations. In identifying nominees for our board of directors, the corporate governance and nominating committee will consider any stockholder recommendations for candidates to serve on the board. If a stockholder wishes to nominate a candidate to serve on our board, the stockholder should follow the procedures as set forth in our bylaws. Any notice of director nomination must meet all the requirements contained in our

bylaws and include other information required pursuant to Regulation 14A under the Securities Exchange Act of 1934, including the nominee’s consent to serve as a director and evidence of the nominating stockholder’s ownership of our stock. If a stockholder wishes to suggest a candidate for consideration by the corporate governance and nominating committee, the stockholder should provide comparable information to the corporate governance and nominating committee with a request that the committee consider the candidate for nomination. To assure time for meaningful consideration by the corporate governance and nominating committee, any such notice should be sent to the attention of Corporate Secretary, 2830 De La Cruz Boulevard, Santa Clara, California 95050 on or before the date on which stockholder proposals to be included in the proxy statement for a given stockholder meeting must be received by us.

Stockholders may send communications to the board of directors or individual members of the board by submitting a letter or letters in a sealed envelope(s) labeled with the name(s) of the desired recipient(s). This letter should be placed in a larger envelope and mailed to Macrovision Solutions Corporation, Attention: Corporate Secretary, 2830 De La Cruz Boulevard, Santa Clara, California 95050. The Corporate Secretary will forward the sealed envelope(s) to the designated recipient. Comments or complaints relating to accounting or auditing matters may be submitted directly to the chair of the audit committee through the same address listed above.

We have adopted a basic philosophy and practice of offering market competitive compensation that is designed to attract, retain and motivate a highly qualified executive management team. With respect to our chief executive officer, chief financial officer, and the other two executive officers (collectively referred to as the “Named Executives”), this Compensation Analysis and Discussion describes our compensation philosophy and objectives, the methodologies used for establishing the compensation programs for the Named Executives, and the policies and practices to administer such programs.

The compensation committee is comprised entirely of non-employee directors. In addition to offering market competitive compensation programs, we place significant emphasis on pay for performance, where the primary aim is to motivate executive management to achieve the business and strategic objectives that drive stockholder value. Our executive compensation programs have been designed, and are maintained by the compensation committee, to achieve the following objectives:

In pursuit of these objectives, the compensation committee believes that the compensation packages provided to the Named Executives should include both cash and stock-based compensation, with an emphasis on pay for performance.

In determining the appropriate compensation levels for our chief executive officer, the compensation committee meets outside the presence of all our executive officers. With respect to the compensation levels of all other Named Executives, the compensation committee meets outside the presence of all executive officers except our chief executive officer. Mr. Amoroso, our chief executive officer, annually reviews each other Named Executive’s performance with the compensation committee.

The compensation committee has the authority to retain outside consultants or advisors to assist the committee in fulfilling its duties. In 2008, the compensation committee engaged Croner Associates, an independent outside compensation consultant, to advise the compensation committee on matters related to the compensation of the Named Executives and the Board of Directors.

With the input of our human resources department, the chief executive officer makes recommendations to the compensation committee regarding base salary levels, target incentive awards, performance goals, special bonuses, and equity incentive awards for Named Executives other than the chief executive officer. In conjunction with the annual performance review of each Named Executive in February of each year, the compensation committee carefully considers the recommendations of the chief executive officer when making decisions on setting base salary, bonus payments under the prior year’s annual incentive plan, target amounts and performance criteria for the current year’s annual incentive plan, and special bonuses for prior year accomplishments. In February, the compensation committee makes such determinations with respect to the chief executive officer as well. The compensation committee similarly determines equity incentive awards for each Named Executive on an annual basis. At these times and other times throughout the year, the compensation committee reviews the analyses and supporting materials provided by our chief executive officer, the human resources department and the compensation consultant regarding compensation of all Named Executives. In making compensation determinations, the compensation committee acts on the recommendations of the chief executive officer with modifications as deemed appropriate by the compensation committee for Named Executives other than the chief executive officer. The compensation committee reviews and recommends to the board of directors for approval each element of compensation for the chief executive officer.

We seek to attract and retain executives by offering total compensation competitive with the market in which we compete for executive talent. To determine market competitive pay levels for the Named Executives, the human resources department and the independent compensation consultant conduct analyses of market practices based on published survey data and on the disclosed compensation practices of publicly-traded companies comparable to Macrovision Solutions Corporation (“Compensation Peer Group”). The companies included in the Compensation Peer Group are technology companies that are similar in annual revenues and market capitalization to us and companies that may compete with our product offerings or with whom we believe we compete in the market for executive talent. Each element of the compensation mix is compared against the market data as well as the total direct compensation value provided. The Compensation Peer Group is periodically reviewed by the compensation committee. The following companies comprised the Compensation Peer Group for fiscal 2008: Akamai Technologies, ChoicePoint, CNET Networks, Dolby Laboratories, Epicor Software Corporation, Factset Research Systems, HLTH Corporation, HIS, Inc., Informatica, Interactive Data Corporation, Mentor Graphics, National Instruments, NDS Group, Nuance Communications, Open Text, Progress Software, Quest Software, Real Networks, Red Hat, Salesforce.com, Tibco Software, United Online, Inc. and ValueClick, Inc.

Because we compete aggressively with both large and middle market companies in the market for executive talent, the compensation committee generally targets total direct compensation (i.e., base salary, annual cash incentives and value of long-term equity incentives) for the Named Executives in the approximate range of the 60th to 75th percentile of the Compensation Peer Group and published market data. The allocation between cash and non-cash compensation is based on the compensation committee’s determination of the appropriate mix among base pay, annual cash incentives and long-term equity incentives to encourage retention and performance. For the fiscal year ended December 31, 2008, the elements of the compensation mix include:

We establish the base salary of each Named Executive based on consideration of approximately the 50th percentile pay levels of the Compensation Peer Group and published survey data and on other internal factors, such as the individual’s performance and experience, company performance and internal equity. The market analysis performed by our human resources department and the compensation surveys are reviewed by our chief executive officer and compensation committee. The compensation committee considers the recommendations of our chief executive officer and human resources department and the data provided by the compensation surveys in determining the appropriate base salary levels for the Named Executives. Base salary increases for Named Executives (other than the chief executive officer) are at the discretion of the compensation committee. Base salary increases for the chief executive officer are at the discretion of the members of board of directors other than our chief executive officer, all of whom are independent directors. In general, base salary increases have been in the range of three to five percent per year; however, in 2008, in light of the completion of the Gemstar-TV Guide acquisition in May 2008, the compensation committee approved substantial increases to the 2008 base salary of certain Named Executives, some of which were in excess of 15% of the Named Executive’s prior year base salary. In making the adjustments, the compensation committee considered the substantial changes to the size and the business model of the Company and the goals associated therewith. The compensation committee also received advice and recommendations from its compensation consultant and compared each of the executive’s compensation to the compensation received by competitive positions in the Company’s peer group established by the compensation committee. Although the compensation committee believes that competitive base salaries are necessary to attract and retain a highly qualified executive team, it feels that a significant portion of executive compensation should be based on pay for performance.

During 2008, the Named Executives were awarded increases to their base salaries on March 1, 2008 and June 1, 2008 as follows:

For our Named Executives, annual cash incentive payments are based upon the attainment of specified revenue and operating income targets by the Company and upon the achievement of individual goals. In setting the target bonus amounts for each of the Named Executives, we consider bonus levels at approximately the 60th percentile of the Compensation Peer Group and published market data. The amount of bonuses paid to the Named Executives, however, is subject to the discretion of the compensation committee based on its assessment of the participant’s contribution to the organization and general and industry-specific conditions existing during the applicable period. For 2008, the compensation committee approved bonus payments for our senior executives

earned under our 2008 Senior Executive Company Incentive Plan (the “Executive Plan”), as applicable, as set forth in our Summary Compensation Table. Annual bonus amounts have varied historically based on the achievement of the targets set and individual goal attainment. The Company does not disclose the specific thresholds for the economic performance component because such information constitutes confidential and sensitive financial information. If this information were publicly disclosed, it would cause competitive harm by alerting our competitors to certain of our important internal financial performance targets which would in turn provide them with valuable insight into our views on the state of the markets in which we operate and our internal benchmarks. The compensation committee also uses the annual discretionary cash bonuses to reward exemplary performance of certain senior officers and to recognize achievement of strategic or above and beyond the ordinary course projects that have a material beneficial impact to the Company. In 2008, our total bonus payout to (i) our Chief Executive Officer was 107% of his bonus potential publicly disclosed in February 2008 when we announced the Executive Plan; and (ii) our other Named Executives was 118% of their bonus potential. In determining these bonus payments, the compensation committee factored in the extraordinary achievement of the senior executives in 2008 with respect to completing the acquisition and integration of Gemstar, the divestitures of the software, games and eMeta businesses and the divestitures of the TV Guide media properties. We expect bonus attainment for our Named Executives to continue to vary in the future based on target and goal attainment. The discretionary annual bonus for performance in 2009 will be paid pursuant to the terms of the 2009 Senior Executive Company Incentive Plan, which was publicly disclosed in February 2009, and participants will again be evaluated based on both an individual performance component and a company performance component.

In addition to the cash bonuses payable under the Executive Plan, to reward extraordinary performance and achievements special bonuses may be awarded to the Named Executives from time to time in a variety of forms, including additional cash bonuses and/or special equity grants. These extraordinary bonus payments are based on the recommendation of the chief executive officer and subject to the approval of the compensation committee. With respect to certain of the Named Executives, the compensation committee awarded discretionary bonuses to reward extraordinary performance in 2008 related to the achievement of strategic objectives regarding the acquisition of Gemstar-TV Guide International, Inc., as set forth in our Summary Compensation Table.

The third component of executive compensation is equity grants which may come in the form of stock options and restricted stock. These grants are designed to provide long-term incentives to executive officers and to better align interests of executives with the interests of stockholders. Such equity compensation provides an incentive that focuses the individual’s attention on managing the Company from the perspective of an owner with an equity stake in the business. The value of stock options is tied to the future performance of the Company’s common stock, and the recipient will benefit only when the price of the Company’s common stock increases above the option exercise price. Stock options reward management for long-term strategic planning and execution through the resulting enhancement of share price. The Company believes that a compensation structure that includes the periodic granting of long-term incentives such as stock options helps to attract and retain senior managers with long-term management perspectives.

Historically, the compensation committee has emphasized equity-based compensation in the form of stock option grants. However, as a result of Financial Accounting Standard No. 123R (“FAS 123(R)”) and our adoption of a policy limiting the aggregate number of shares granted under our equity plans in order to help reduce dilution to our stockholders, the compensation committee decided to alter its equity-compensation practices by awarding a mix of stock options and restricted stock. The compensation committee determined that this mix would be less dilutive to our current stockholders than its traditional option award practices and would reduce the amount of compensation expense that would be recognized in our statements of income, which in turn would result in higher reported net income.

The equity-based compensation awarded to the Named Executives are set by the compensation committee based on the practices of the Compensation Peer Group, published survey data and the recommendation of the chief executive officer. In addition, the compensation committee also considered the executive’s replacement value, individual performance and achievements.

In June 2008, the Named Executives received option grants under the Macrovision 2000 Equity Incentive Plan or the 2007 Long-Term Incentive Plan at exercise prices equal to the fair market value of our common stock on the grant dates. These options vest over a three-year period after the grant date, subject to the Named Executive’s continued employment with the Company, and expire five years from the grant date, unless the participant’s employment with the Company terminates before the end of such five-year period.

Our chief executive officer also received restricted stock grants in 2008 in accordance with the terms of his amended employment agreement, which vest over a four-year period after the grant date subject to his continued employment with the Company. In consideration for the waiver of restricted stock grants to which our chief executive was entitled pursuant to his employment agreement, as amended, our chief executive officer also received stock options in September 2008, which vest over a four-year period after the grant date (subject to his continued employment with the Company) and expire seven years from the grant date.

Each of the Named Executives, except for Mr. Carson, has entered into an executive severance and arbitration agreement with the Company. With the exception of the chief executive officer, all executive severance and arbitration agreements of the Named Executives are substantially the same, providing cash severance of twelve months base pay, accelerated vesting of equity-based compensation and continuation of benefits coverage only upon termination of employment in connection with a “change in control” of the Company. The executive severance and arbitration agreement of the chief executive officer provides for the similar cash severance, accelerated vesting and benefit coverage as the other Named Executives in the event of a “change in control,” but differs from the other Named Executives’ agreements in that the chief executive officer’s executive severance and arbitration agreement provides him (i) certain of such severance benefits upon termination of his employment by the Company without “cause” or his voluntary termination with “good reason” unrelated to any “change in control” of the Company or by reason of death, and (ii) an additional tax “gross-up” payment if the payment of severance, accelerated vesting and continuation of benefits upon a “change in control” results in excise tax under Code Section 4999 of the Internal Revenue Code of 1986, as amended. All severance benefits provided to the Named Executives, including the chief executive officer, as the result of a “change in control” are “double trigger” benefits, which means that the payment of cash severance, accelerated vesting of equity-based compensation and continuation of benefits requires both (1) a “change in control” of Macrovision, and (2) the Named Executive’s termination of employment by the Company without “cause” or by the Named Executive with “good reason.” The terms “change in control,” “cause” and “good reason” are defined in the executive severance and arbitration agreements.

Enhanced Severance Benefits. As part of the acquisition of Gemstar, we agreed to honor the retention program that Gemstar adopted in August 2007. Pursuant to the retention program, Mr. Carson will be eligible to receive a severance payout amount equal to 1.0 times annual compensation (base salary plus target bonus) and will be eligible for reimbursement of the cost of continued health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 for twelve months, in the event of a termination by the Company without cause (as defined in the retention program), or by the executive for good reason, prior to May 3, 2009. Receipt of these enhanced severance benefits is subject to the executive providing a release of claims to the Company. In no event shall Mr. Carson receive severance payments under both the retention program and his employment agreement.

In 2008, these benefits included health, dental, vision, disability and life insurance, healthcare savings accounts, health club membership reimbursement, paid vacation time and company contributions to a 401(k) profit sharing retirement plan. Benefits are provided to all employees in accordance with practices within the marketplace and are a necessary element of compensation in attracting and retaining employees.

In administering the compensation programs of the Named Executives, the compensation committee meets at least four times a year in conjunction with regularly scheduled Board of Director meetings. The compensation committee also meets telephonically to discuss extraordinary items. The compensation committee members regularly confer with our chief executive officer and human resources department on matters regarding the compensation of the Named Executives, other senior officers reporting directly to the chief executive officer, and certain other Company personnel in extraordinary performance situations.

Stock options provide for financial gain derived from the potential appreciation in stock price from the date that the option is granted until the date that the option is exercised. The exercise price of stock option grants is set at fair market value on grant date. Under our existing equity incentive plans, the Company may not grant stock options at a discount to fair market value or reduce the exercise price of outstanding stock options except in the case of a stock split or other similar event. The Company does not grant stock options with a so-called “reload” feature, nor does it loan funds to employees to enable them to exercise stock options. The Company’s long-term performance ultimately determines the value of stock options, because gains from stock option exercises are entirely dependent on the long-term appreciation of the Company’s stock price. The Company does not backdate options or grant options retroactively. In addition, we do not intentionally coordinate grants of options so that they are made before the announcement of favorable information, or after announcement of unfavorable information. The Company’s options are granted at fair market value on a fixed date with all required approvals obtained in advance of or on the actual grant date. All grants require the approval of the compensation committee (or the independent members of our board of directors in the case of grants to our chief executive officer), or the chief executive officer for specific circumstances acting under delegated authority from the compensation committee.

In 2008, the grants of restricted stock and stock options to our chief executive officer were made on March 1, 2008 and September 1, 2008 in accordance with his employment agreement entered into with the Company in 2005, as amended, which provided for such grants.

In May 2008, we granted stock options to our Named Executives (including our chief executive officer) at a meeting of our compensation committee meeting. In accordance with the procedures described below, these grants had an effective date of June 1, 2008, which was the date used for purposes of establishing the exercise price of options awarded to the Named Executives.

For fiscal year 2008, the Company utilized the following procedures for granting stock options to all executive officers, which includes the Named Executives. The procedures apply to both “new-hire” grants, annual “refresher” grants and other “continuing” grants. They do not apply to grants made to executive officers at such time, if any, as they may become new-hire employees of the Company in connection with the Company’s acquisition of another business. The procedures included the following:

Stock Options. Subject always to prior compensation committee authorization of the particular stock option grant, grants for all newly hired executive officers (other than those employed in connection with a business acquisition) shall occur on the first day of the month next following the new employee’s start date (except for

January, which would be January 2, due to the perpetual January 1 holiday). For example, if the compensation committee authorized a grant to a new-hire executive officer on January 10 and the executive officer started employment on January 20, the grant date would be February 1. If the new-hire executive officer started employment on January 20 but the compensation committee did not authorize the grant until February 2, the grant date would be March 1.

Restricted Stock. Restricted stock may be granted upon the following dates each calendar year: January 2, March 1, May 1, July 1, September 1 and November 1 (the “restricted stock grant dates”). Subject always to prior compensation committee authorization of the particular grant of restricted stock, grants for all newly hired executive officers (other than those employed in connection with a business acquisition) shall occur on the restricted stock grant date next following the new employee’s start date. For example, if the compensation committee authorized a grant to a new-hire executive officer on February 10 and the executive officer started employment on February 20, the grant date would be March 1. If the new-hire executive officer started employment on February 20 but the compensation committee did not authorize the grant until March 2, the grant date would be May 1.

Annual refresher grants. If the compensation committee determines to authorize regularly scheduled “refresher” grants of restricted stock or stock options, such grants will be made on the first day of the month next following approval of the grant by the compensation committee for grants of stock options or at such later time as the compensation committee shall designate; provided such later time is on the first day of a calendar month. For example, refresher grants to the Named Executives that were approved in May 2008 were made on June 1, 2008. The compensation committee can also designate multiple future dates for such refresher grants. For example, the compensation committee could authorize a refresher grant to Named Executives in February with grant dates of March 1 and September 1 of that year.

Continuing Grants. In addition to the regularly scheduled “refresher” grants of stock options or restricted stock, the Company may grant stock options or restricted stock to existing employees for retention, promotion or special bonus reasons. Continuing grants for executive officers shall occur: (i) on the first day of the month next following approval of the grant by the compensation committee for grants of stock options; and (ii) on the next restricted stock grant date following the date of approval of the grant by the compensation committee for grants of restricted stock.

Exercise Price of Stock Options. In all instances, the exercise price for stock options will be set as the closing price of the Company’s common stock on the grant date, or the closing price on the last day of trading prior to that date if the grant date falls on a weekend or holiday.

Stock ownership guidelines have not been implemented by the compensation committee for our Named Executives. We will continue to periodically review best practices and re-evaluate our position with respect to stock ownership guidelines.

Section 162(m) of the Internal Revenue Code generally limits the corporate deduction by a public company for compensation paid to its chief executive officer and other Named Executives during any single year to $1 million per individual, unless certain requirements are met which qualify that compensation as performance-based under these tax rules. Our compensation committee considers the impact of this deduction limitation rule in establishing and implementing compensation policies and practices. The committee intends to qualify compensation as performance-based for these purposes in appropriate circumstances, but has not established a policy whereby all compensation paid to our Named Executives must be fully deductible. Rather, the deductibility of such compensation is one of the factors it considers in establishing and implementing our

executive compensation programs, along with the need to design compensation programs that appropriately motivate our senior management and our need to attract and retain key executives by remaining competitive in our pay practices.

Under the 2000 Equity Incentive Plan and 2008 Equity Incentive Plan, award of stock options and performance stock are designed generally to satisfy the deductibility requirements of Section 162(m). However, the compensation committee has deemed it desirable to retain the flexibility in rewarding senior management for extraordinary contributions that cannot properly be recognized under a predetermined quantitative plan, and, therefore, our annual cash incentive bonus programs have not to date been structured to qualify as performance-based compensation under the Section 162(m) rules and so are not fully deductible by us in all circumstances. Except for our chief executive officer and our chief financial officer, no Named Executive received compensation in excess of $1 million in 2008. We have determined that the non-deductible compensation paid in 2008 to our chief executive officer was $1,511,749. The non-deductible compensation was attributed primarily to the non-deductibility of his bonus pursuant to the 2008 Executive Plan and the non-deductibility of restricted stock awards.

The compensation committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the compensation committee recommended to the Board that the Compensation Discussion and Analysis be included in this report.

James P. O’Shaughnessy, Robert J. Majteles and Ruthann Quindlen served as members of our compensation committee since May 2008. None of the members of the compensation committee during 2008 had any interlocking relationship as defined by the SEC.

The following table sets forth all compensation awarded to, earned by, or paid for services rendered to Macrovision in all capacities for the fiscal years ended December 31, 2008, 2007 and 2006 by our Named Executives. This information includes the dollar value of base salaries, commissions and bonus awards, the number of shares underlying stock options granted and certain other compensation, whether paid or deferred. We have not granted stock appreciation rights and have not provided long-term compensation benefits other than stock options and restricted stock.

The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended December 31, 2008 to the Named Executives.

Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the Grants of Plan-Based Awards table was paid or awarded, are described above under “Compensation Discussion and Analysis.” A summary of certain material terms of our continuing compensation plans and arrangements is set forth below.

Mr. Amoroso. In June 2005, we entered into an employment agreement with Mr. Amoroso. Under the employment agreement, Mr. Amoroso was entitled to an initial annual base salary of $500,000, and was eligible to participate in Macrovision’s Executive Plan with a cash bonus target equal to 100% of his base salary. On February 7, 2007, the Compensation Committee approved the amendment to Mr. Amoroso’s employment arrangement such that for calendar year 2007 and subsequent years, Mr. Amoroso’s bonus payout is based 100% upon the Company’s performance, which is determined based upon the Company meeting its annual revenue and operating profit targets.

We granted Mr. Amoroso, on his first day of employment, options to purchase 500,000 shares of Company common stock, having a term of five years and vesting over three years in accordance with the terms and conditions of the Company’s 2000 Equity Incentive Plan. Pursuant to the employment agreement, Mr. Amoroso was guaranteed additional options to purchase 250,000 shares of Company common stock in each of 2006, 2007

and 2008. Each additional grant was made in two equal installments on March 1 and September 1 of each applicable year. All options were granted with an exercise price at the fair market value of the Company’s common stock on the grant date, with a term of five years and vesting over a three-year period from the date of grant. On July 28, 2006, our compensation committee approved an amendment to Mr. Amoroso’s employment arrangement whereby Mr. Amoroso was granted 125,000 shares of restricted stock on September 1, 2006 instead of the stock option grant that he would have otherwise been entitled to receive. In addition, the compensation committee further approved the amendment to Mr. Amoroso’s offer agreement to grant him restricted stock instead of stock options for the future semiannual grants in 2007 and March 2008. The restricted stock was granted at a price per share of the par value of the stock, which is $0.001 per share, and has a four year vesting schedule. These shares vest in accordance with the terms and conditions of the 2000 Equity Incentive Plan, as amended, as follows: 25% of the restricted stock vests on each annual anniversary date of the grant date, subject to his continuing employment with the Company or its subsidiaries, through the applicable vesting date.

On July 31, 2008, our compensation committee approved an amendment to Mr. Amoroso’s employment arrangement whereby Mr. Amoroso was granted a combination of 85,000 shares of restricted stock and options to purchase 80,000 shares of our common stock on September 1, 2008 instead of the restricted stock grant of 125,000 shares that he would have otherwise been entitled to receive on September 1, 2008. The restricted stock was granted at a price per share of the par value of the stock, which is $0.001 per share, and has a four year vesting schedule as outlined above. The stock options were granted with an exercise price at the fair market value of the Company’s common stock on the grant date, with a term of seven years. The options vest as to one-fourth of the total shares on the first anniversary of the date of grant, and an additional one-forty-eighth (1/48^th) of the option shares available for exercise each month thereafter through the fourth anniversary of the grant date, in each case provided that Mr. Amoroso remains in employment with the Company through the applicable vesting date.

Mr. Budge. In September 2005, we entered into an employment agreement with Mr. Budge. Under the employment agreement, Mr. Budge was entitled to an initial annual base salary of $275,000, with a cash payout at 100% achievement of targets equal to 50% of his prorated base salary earned during 2005, of which 80% payment for 2005 was guaranteed. We granted Mr. Budge, on his first day of employment, options to purchase 200,000 shares of Company common stock, having a term of five years and vesting over three years in accordance with the terms and conditions of the 2000 Equity Incentive Plan. Pursuant to his employment agreement, Mr. Budge was guaranteed additional options to purchase 75,000 shares of Company common stock in each of 2006 and 2007. Each additional grant was made in two equal installments on March 1 and September 1 of each applicable year. All options were granted with an exercise price at the fair market value of the Company’s common stock on the grant date, with a term of five years and vesting over a three-year period from the date of grant. On July 28, 2006, our compensation committee approved an amendment to Mr. Budge’s employment agreement whereby Mr. Budge was granted 37,500 shares of restricted stock on September 1, 2006 instead of the stock option grant that he would have otherwise been entitled to receive. In addition, the compensation committee further approved the amendment to Mr. Budge’s employment agreement to grant him restricted stock instead of stock options for the future semiannual grants in 2007. The restricted stock was granted at a price per share of the par value of the stock, which is $0.001 per share, and has a four year vesting schedule. These shares vest in accordance with the terms and conditions of the 2000 Equity Incentive Plan, as amended, as follows: 25% of the restricted stock vests on each annual anniversary date of the grant date, subject to his continuing employment with the Company or its subsidiaries, through the applicable vesting date.

Mr. Carson. In April 2006, Gemstar-TV Guide International, Inc. entered into an employment agreement with Mr. Carson, which was subsequently amended in October 2006. Macrovision Solutions Corporation assumed the employment agreement, as amended, with Mr. Carson upon the close of the acquisition of Gemstar-TV Guide in May 2008. Mr. Carson’s employment agreement continues through March 15, 2010. Pursuant to the employment agreement, Mr. Carson is entitled to having his base salary adjusted on an annual basis for the percentage increase, if any, in the consumer price index. Mr. Carson is also provided a car allowance of eight hundred dollars per month. If the Company terminates Mr. Carson’s employment for any reason other than for cause (as defined in his employment agreement), death or disability or if Mr. Carson terminates his

employment for a good reason (as defined in his employment agreement), Mr. Carson will be placed on contract payout status under which he may elect either to (i) remain employed by the Company and continue to receive compensation until the earlier to occur of the expiration of the term of his employment agreement and the date on which he obtains alternate employment (with a duty to actively seek alternate employment), or (ii) receive a negotiated lump-sum payment. If Mr. Carson’s employment terminates due to his death or disability, he would be entitled to his base salary through the date of termination to the extent not already paid. Mr. Carson is eligible for the retention program and may receive enhanced severance benefits under such program in the event of termination of employment other than for Cause or if Mr. Carson terminates his employment for Good Reason. However, Mr. Carson shall either receive amounts payable pursuant to the retention program or his employment agreement, but in no event shall Mr. Carson receive payments under both the retention program and his employment agreement.

As set forth in the Summary Compensation table and the Grants of Plan-Based Awards table, a certain number of our executives received options and restricted stock under our 2000 Equity Incentive Plan and the 2007 Long-Term Incentive Plan. On July 15, 2008, the stockholders of the Company approved the new 2008 Equity Incentive Plan and accordingly, after such date, the Company will no longer award any grants under the 2007 Long-Term Incentive Plan. The following description of the 2000 Equity Incentive Plan is a summary and therefore is qualified by reference to the complete text of the 2000 Equity Incentive Plan, a complete copy of which is filed with the SEC.

Eligibility. On July 15, 2008, the stockholders of the Company approved the new 2008 Equity Incentive Plan and accordingly, after such date, the Company will only use the 2000 Equity Plan to award grants to the Company’s chief executive officer.

No one person participating in the 2000 Equity Incentive Plan may receive options, stock appreciation rights, restricted stock, restricted stock units or performance shares for more than 1,500,000 shares of common stock in any single calendar year.

Should an option under the 2000 Equity Incentive Plan expire or terminate for any reason prior to exercise in full, the shares subject to the unexercised portion of the option will be available for subsequent awards under the 2000 Equity Incentive Plan. If restricted shares, shares subject to restricted stock units, performance shares or shares issued upon exercise of options are forfeited and if stock appreciation rights are forfeited or terminate before exercise, such shares will be available for subsequent awards under the 2000 Equity Incentive Plan. If stock appreciation rights are settled in shares, the number of shares available for future awards under the 2000 Equity Incentive Plan will be reduced by the number of shares of common stock that were subject to the rights exercised.

Option Grants: Price and Exercisability. The 2000 Equity Incentive Plan authorizes the plan administrator to grant nonstatutory stock options with an exercise price per share not be less than 100% of the fair market value of the common stock on the grant date. For purposes of establishing the exercise price and for all other valuation purposes under the 2000 Equity Incentive Plan, the fair market value of a share of common stock on any relevant date will be the closing price per share of common stock on that date, as reported on Nasdaq.

Awards granted under the 2000 Equity Incentive Plan in the form of options may be exercised in whole or in part and the purchase price may be paid in cash, other shares of our common stock, through a same day sale program, through a margin commitment program, or any combination of the foregoing. Options granted under the 2000 Equity Incentive Plan become exercisable at such time or times as the compensation committee may determine and provide in the option grant agreement. Awards granted in the form of options under the 2000 Equity Incentive Plan must be exercised within a period fixed by the compensation committee, which period currently is set as not exceeding five years from the date of the grant of the option. Options may expire before the

end of the option period if the optionee’s service with Macrovision ceases for any reason, including death, disability, retirement or termination. No optionee will have any stockholder rights with respect to the option shares until the optionee has exercised the option, paid the exercise price and become a holder of record of the shares.

Termination of Service. Any option held by the optionee upon termination of service will cease to be exercisable three months following termination of service, unless otherwise provided in such person’s option agreement. Each such option will normally be exercisable only as to shares of common stock in which the optionee is vested at the time of termination. The compensation committee has complete discretion to accelerate the exercisability of such options in whole or in part (except with respect to the chief executive officer, in which case such discretion remains with the full board of directors). This discretion may be exercised at any time while the options remain outstanding.

In the event of a corporate transaction (such as dissolution or liquidation, merger with and into another entity, or sale of all or substantially all of our assets), the 2000 Equity Incentive Plan and any option or other award or portion thereof not exercised will terminate unless the 2000 Equity Incentive Plan and the options and other awards thereunder are assumed by the surviving corporation or new options or other awards in the successor corporation are substituted for Macrovision options or other awards. If the surviving corporation does not assume all outstanding stock option awards or make such substitutions, each optionee will have the right to exercise all of his or her options as of the date of the corporate transaction, regardless of their vesting schedule.

General. The following description of the 2008 Equity Incentive Plan (the “2008 Equity Plan”) is a summary and therefore is qualified by reference to the complete text of the 2008 Equity Plan, a complete copy of which is filed with the SEC. The purpose of the 2008 Equity Plan is to provide equity ownership incentives to current and prospective management, employees, non-employee directors and other service providers in order to incent and reward superior performance in achieving the Company’s long-term objectives, with the attendant rewards aligning with increased shareholder value as expressed in higher share prices.

Eligibility. The Company’s employees, consultants, independent contractors and non-employee directors, and those of the Company’s subsidiaries, are eligible to receive awards under the 2008 Equity Plan. The Company’s chief executive officer is not eligible to receive awards under the 2008 Equity Plan.

Terms and Conditions of Options. Each option is evidenced by a stock option agreement between the Company and the optionee and is subject to the following additional terms and conditions:

Exercise Price. The exercise price per share in the case of any option granted under the 2008 Equity Plan may not be less than 100% of the fair market value of the common stock on the grant date. For purposes of establishing the exercise price and for all other valuation purposes under the 2008 Equity Plan, the fair market value of a share of common stock on any relevant date will be the closing selling price per share of common stock on that date, as reported on Nasdaq. Except for adjustments upon changes in capitalization, stock split or dividend, merger or similar event, the 2008 Equity Plan prohibits the Company from decreasing the exercise price or purchase price of any outstanding award (including by means of cancellation or re-grant) without stockholder approval.

Exercise of Option; Form of Consideration. Awards granted under the 2008 Equity Plan in the form of options may be exercised in whole or in part and the purchase price may be paid in cash, other shares of the Company’s common stock, through a same day sale program, through a margin commitment program, or any combination of the foregoing. Options granted under the 2008 Equity Plan become exercisable at such time or times as the compensation committee may determine and provide in the option grant agreement. The compensation committee may accelerate the vesting and exercisability of all or any portion of an option at any time, including but not limited to options held by officers and non-employee directors upon the happening of certain events such as a merger.

No optionee will have any stockholder rights with respect to the option shares until the optionee has exercised the option, paid the exercise price and become a holder of record of the shares. During the optionee’s lifetime, the option may be exercised only by the optionee and options are not assignable or transferable other than by will or the laws of descent and distribution. However, the compensation committee may allow an optionee to transfer, for no consideration, non-statutory options to members of the optionee’s immediate family or to trusts or partnerships for the exclusive benefit of members of the optionee’s immediate family.

Term of Option. Awards granted in the form of options under the 2008 Equity Plan must be exercised within a period fixed by the compensation committee, which period currently is set as not exceeding seven years from the date of the grant of the option. Options may expire before the end of the option period if the optionee’s service with the Company ceases for any reason, including death, disability, retirement or termination.

Termination of Service. Any option held by the optionee upon termination of service will cease to be exercisable 3 months following termination of service (12 months in the case of options granted to non-employee directors), unless otherwise provided in such person’s option agreement. Each such option will normally be exercisable only as to shares of common stock in which the optionee is vested at the time of termination. The compensation committee has complete discretion to accelerate the exercisability of such options in whole or in part or to extend the period in which optionees may exercise vested equity awards after termination of service. This discretion may be exercised at any time while the options remain outstanding. If an optionee’s service terminates for cause (as defined in the 2008 Equity Plan), any option held by the optionee shall immediately terminate and be of no further force and effect, unless otherwise provided by the Administrator.

Generally, if an optionee’s employment terminates as a result of optionee’s retirement, disability or death, all outstanding options that were vested and exercisable as of the optionee’s termination date may be exercised for twelve months following the optionee’s termination date but in no event after the expiration date. The compensation committee has the authority to extend the period of time for which an award is to remain exercisable following an optionee’s termination (taking into account limitations and consequences under the Code) but not beyond the expiration of the term of the award.

Restricted Stock Awards. The 2008 Equity Plan authorizes the compensation committee to grant restricted stock awards. A restricted stock award is an award entitling the recipient to receive shares of our common stock or to receive the economic equivalent of shares of our common stock subject to such restrictions and conditions as the compensation committee may determine, at a purchase price and for such consideration as the compensation committee may determine. Such restricted stock awards may, at the discretion of the compensation committee, be based on continuing employment (or other business relationship) with the Company and its subsidiaries or the achievement of pre-established performance goals and objectives.

Performance Shares. The 2008 Equity Plan also authorizes the compensation committee to grant performance shares, entitling the recipient to receive a prescribed number of shares of the Company’s common stock, upon the achievement of performance goals and objectives as determined by the compensation committee based upon criteria set forth in the 2008 Equity Plan. The 2008 Equity Plan is designed to permit the Company to provide compensation in shares of stock that qualifies as performance-based compensation under Section 162(m) of the Code. Each performance share will have an initial value equal to the fair market value of the underlying shares of common stock on the grant date.

The performance criteria set forth in the 2008 Equity Plan that may be used by the compensation committee in establishing the performance goals and objectives for vesting of performance shares and other types of awards are net earnings (either before or after interest, taxes, depreciation and amortization, and other non-cash or nonrecurring items), net losses, sales or revenue, operating income, operating cash flow, return on net assets, return on stockholders’ equity, return on assets, return on capital, stockholder returns, gross or net profit margin, earnings per share, price per share of our common stock, and market share, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.

Nontransferability. Generally, stock options and stock appreciation rights granted under the 2008 Equity Plan are not transferable other than by will or the laws of descent and distribution or to a designated beneficiary upon the awardee’s death. The compensation committee may in its discretion make a stock option or stock appreciation right transferable (other than for value) to an awardee’s family member or any other person or entity as it deems appropriate.

Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset Sale. If any change of common stock occurs (through a recapitalization, stock dividend, stock split, reorganization, merger or similar change affecting our common stock), the Company will make appropriate adjustments in the number and kind of shares covered by each outstanding option or other award granted under the 2008 Equity Plan, the maximum number of shares reserved for issuance under the 2008 Equity Plan, the number of equity awards that can be granted to any one individual participant in a single calendar year, and the exercise price per share in respect of each outstanding option or other award in order to prevent dilution or enlargement of benefits thereunder.

In the event of a corporate transaction (such as dissolution or liquidation, merger with and into another entity, or sale of all or substantially all of our assets), the compensation committee, in its discretion, may provide for the assumption or substitution of each outstanding award, may accelerate the exercise date of options, may terminate any restrictions or performance conditions on stock awards, and may cancel awards that have not been exercised or are not vested, including for a cash payment to the optionee. Additionally, the compensation committee may accelerate the vesting and exercisability of all or any portion of an option upon the happening of such events.

Section 162(m) Limitations. Section 162(m) of the Code generally disallows a tax deduction to a public company for compensation in excess of $1 million paid in a year to the Company’s chief executive officer or any of the three other most highly compensated officers, not including the chief financial officer. Stock options and other stock awards may qualify as performance-based compensation if the Company satisfies certain requirements in connection with the plan under which the awards are granted. Among other requirements, the plan must be stockholder-approved and must contain a limit on the number of shares that may be granted to any one individual under the plan during a specified period. Accordingly, the 2008 Equity Plan provides that no awardee may be granted equity awards covering more than 1,500,000 shares in any calendar year.

Additional requirements apply to certain forms of compensation, such as stock awards other than stock options and stock appreciation rights, in order for them to qualify as performance-based compensation, including a requirement that payment of the value of the awards be contingent upon achievement of performance goals that are established in a manner specified under Section 162(m) of the Code.

Although the Company sought stockholder approval of the 2008 Equity Plan in a manner that will allow awards granted thereunder to qualify as performance-based compensation under Section 162(m), it does not guarantee that awards granted hereunder will so qualify and the Company from time to time may choose to grant awards that cannot so qualify. To continue to comply with Section 162(m), the Company will be required to seek stockholder approval of the qualifying performance criteria again in 2013.

Amendment and Termination of the 2008 Equity Plan. The 2008 Equity Plan does not have an expiration date. The Company’s board of directors may, at any time, amend or discontinue the 2008 Equity Plan, and the compensation committee may amend or cancel any option for any lawful purpose, but no action can adversely affect rights under any outstanding option without the optionee’s consent. Except for adjustments upon changes in capitalization, stock split or dividend, merger or similar event, the 2008 Equity Plan prohibits the Company from decreasing the exercise price or purchase price of any outstanding award (including by means of cancellation or re-grant) without stockholder approval. Without further stockholder approval, no incentive stock option may be granted after July 15, 2018.

The following table sets forth certain information with respect to outstanding equity awards for the fiscal year ended December 31, 2008 to the Named Executives.

During 2008, the Named Executives (other than Mr. Carson) received option grants under the 2000 Equity Incentive Plan and Mr. Carson received option grants under the 2007 Long-Term Incentive Plan. All such option grants were at exercise prices equal to the fair market value of our common stock on the grant dates. Except for the September 1, 2008 grant to Mr. Amoroso, these options vest over a three-year period after grant, subject to the Named Executive’s continued employment with the Company. All options granted to the Named Executives in 2008 expire five years from the grant date, unless the participant’s employment with the Company terminates before the end of such five-year period. With respect to the September 1, 2008 grant to Mr. Amoroso, those options vest over a four-year period after grant, subject to Mr. Amoroso’s continued employment with the Company, and expire seven years from the grant date, unless Mr. Amoroso’s employment with the Company terminates before the end of such seven-year period. Mr. Amoroso also received restricted stock grants in 2008, which vest over a four-year period after the grant date subject to his continued employment with the Company.

Market value of shares of restricted stock that have not vested is calculated by multiplying the number of shares of stock that have not vested by the closing market price of our common stock at December 31, 2008, which was $12.65.

The following table sets forth certain information with respect to option exercises and stock awards acquired on vesting during the fiscal year ended December 31, 2008 to the Named Executives.

We entered into executive severance and arbitration agreements with: Mr. Budge in September 2005 and Mr. Yu in May 2006, each in connection with his employment with Macrovision. We amended the agreements of Mr. Budge and Mr. Yu in August 2007 to reflect new tax regulations. Under the agreements, in the event of a change in control of Macrovision, each of these executives is entitled to receive minimum severance payments in the form of twelve months of salary continuation calculated on base salary (excluding bonus) upon termination of employment for any reason other than cause. In addition, upon such event all unvested stock awards held by these executives shall become immediately vested. The only severance payments payable to these executives are those that require (1) a “change in control” of Macrovision and (2) the executive’s termination of employment by the Company without cause or by the executive with “good reason.” The executives are also entitled to receive all welfare benefits we have provided to them immediately prior to a “change in control” during the period we are obligated to make their severance payments, or if sooner, until the executive is entitled to welfare benefits from any entity employing the executive after the executive’s employment with the Company terminates. The executive’s right to receive benefits under these agreements, including the executive’s right to exercise any options that have accelerated under these agreements, will cease if the executive accepts employment with one of our competitors. In addition, the executive agrees not to solicit, for one year following termination any employee of ours to work for another business.

We entered into an executive severance and arbitration agreement with Mr. Amoroso in July 2005 in connection with his employment with Macrovision. We amended the agreement with Mr. Amoroso in August 2007 to reflect new tax regulations. Under the agreement, in the event the Company terminates Mr. Amoroso’s employment for any reason other than cause or he terminates his employment with “good reason” during the period beginning four months prior to a change in control of the Company and ending twelve months following the change in control, Mr. Amoroso is entitled to receive minimum severance payments in the form of twelve months of salary continuation calculated on base salary (excluding bonus) in effect four months before the change of control or at the time of termination of employment, whichever is greater. In such event, all of Mr. Amoroso’s unvested stock awards will immediately vest, and Mr. Amoroso would be entitled to an additional tax “gross-up” payment if the payment of severance, accelerated vesting and continuation of benefits result in him incurring an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended. In the event that Mr. Amoroso’s employment is terminated by the Company without cause or Mr. Amoroso voluntarily terminates his employment with good reason, but not within the period surrounding a change in control of the Company specified above, Mr. Amoroso is entitled to receive a lump sum severance payment equal to 12 months of regular base salary in effect at the time of the termination of his employment, and the vesting of stock awards held by Mr. Amoroso accelerate such that the number of stock options that would have vested and become exercisable within 12 months following the termination date become vested and exercisable as of the termination date and the number of shares of restricted stock that would have vested within 12 months following the termination date become vested as of the termination date. In either situation, Mr. Amoroso is also entitled to receive all welfare benefits we have provided to him immediately prior to his termination during the period we are obligated to make his severance payments, or if sooner, until he is entitled to welfare benefits from any entity employing him after his termination by the Company. In addition, he has agreed not to solicit, for one year following termination, any employee of ours to work for another business.

Mr. Amoroso is not entitled to any payments from the Company in the event his employment by the Company terminates as a result of his voluntary termination, other than for “good reason” or his involuntary termination by the Company for “cause.” In the event that the Company had terminated Mr. Amoroso’s employment without “cause” or he had voluntarily terminated with “good reason” on December 31, 2008, in each case not occurring in connection with a “change in control” of the Company, Mr. Amoroso would be entitled to a lump sum severance payment of $550,000, accelerated vesting of stock options having no value, accelerated vesting of restricted stock having a value of $1,849,916, and healthcare benefit continuation having a value of $28,444, for a total value of $2,428,360. In the event that the Company had terminated Mr. Amoroso’s employment without “cause” or he had voluntarily terminated with “good reason” on December 31, 2008, and this was within four months prior or 12 months following a “change in control” of the Company, then

Mr. Amoroso would be entitled to a lump sum severance payment of $550,000, accelerated vesting of stock options having no value, accelerated vesting of restricted stock having a value of $5,818,540, healthcare benefit continuation having a value of $28,444, for a total value of $6,396,984.

Mr. Carson is not entitled to any payments from the Company in the event his employment by the Company terminates as a result of his voluntary resignation, other than for “good reason” or his involuntary termination by the Company for “cause.” In the event that the Company had terminated Mr. Carson’s employment without “cause” or he had voluntarily terminated with “good reason” on December 31, 2008, Mr. Carson would have been placed on contract payout status under which he may elect either to (i) remain employed by the Company and continue to receive compensation until the earlier to occur of March 15, 2010 (the expiration of the term of his employment agreement) and the date on which he obtains alternate employment (with a duty to actively seek alternate employment), or (ii) receive a negotiated lump-sum payment.

None of our Named Executives other than Mr. Amoroso and Mr. Carson is entitled to any payments from the Company in the event his or her employment by the Company terminates as a result of death or disability, or as the result of the voluntary or involuntary termination of his or her employment not in connection with a “change in control” of the Company.

In the event that the Company had terminated the employment of Messrs. Budge or Yu without “cause” or he had voluntarily terminated with “good reason” on December 31, 2008, and this was within four months prior or 12 months following a “change in control” of the Company, then such Named Executives would be entitled to the following payments: Mr. Budge would be entitled to a lump sum severance payment of $350,000, accelerated vesting of stock options having no value, accelerated vesting of restricted stock having a value of $948,675, and healthcare benefit continuation having a value of $45,401, for a total value of $1,344,076. Mr. Yu would be entitled to a lump sum severance payment of $300,000, accelerated vesting of stock options having no value, accelerated vesting of restricted stock having a value of $275,116, and healthcare benefit continuation having a value of $45,401, for a total value of $620,517.

Cash Compensation. Each of the Company’s non-employee directors, except for the chairman of the board, received an annual cash retainer of $35,000, and the chairman of the board received an annual cash retainer of $55,000. In addition, each of the Company’s non-employee directors received a one-time “Startup Year Fixed Meeting Fee Retainer” in the amount of $15,000 per director, which is intended to be a retainer for services rendered for the period running from May 2, 2008 through May 2, 2009.

Additionally, each director serving on the committees of the Company’s board of directors also received annual cash retainers in the following amounts: the chairs of the audit and compensation committee each received $20,000; the other members of each of the audit and compensation committees each received $10,000; the chair of the corporate governance and nominating committee received $10,000; and the other members of the corporate governance and nominating committee each received $5,000.

Each of above-mentioned cash retainers is paid in four equal quarterly installments on the first day of January, April, July and October to those directors who are serving on the board of directors on such payment dates. Non-employee directors are also reimbursed for customary and usual travel expenses incurred attending Company meetings.

Options. In addition to the compensation set forth above, each non-employee director received options granted under the 2008 Equity Plan. Under the 2008 Equity Plan, each director received an automatic initial option grant to purchase 60,000 shares of common stock on the date on which such person first becomes a non-employee director. The initial option grants to the Company’s current non-employee directors were granted on July 15, 2008. The initial option grants vest monthly over a three-year period. Employee directors who

terminate employment and continue as non-employee directors are not eligible to receive this initial grant. On the date of the Company’s annual stockholders’ meeting each year beginning with the meeting to be held in 2009, each non-employee director, if he or she continues serving as a member of the Company’s board of directors, will receive an automatic annual option grant to purchase 30,000 shares of common stock. These annual option grants vest monthly over a one-year period.

The table below summarizes the compensation paid by the Company to our Directors, other than Mr. Amoroso, for the fiscal year ended December 31, 2008.

Amounts disclosed under “Fees earned or paid in cash” for Mr. Ludwick and Mr. Majteles include fees paid for serving on the board of directors of Macrovision Corporation prior to May 2, 2008 in the following amounts: Mr. Ludwick—$7,500 (quarterly retainer fee) and Mr. Majteles—$10,250 (quarterly retainer fee plus per meeting fees for committees of the board). Amounts disclosed under “All Other Compensation” consist of (i) expense reimbursement for attending meetings of the board of directors and its committees and (ii) the taxable value of attending the Company’s President Club meeting in the following amounts: Mr. Earhart—$5,457; Mr. Ludwick—$6,296; Mr. O’Shaughnessy—$4,797; and Ms. Quindlen—$19,578.

Amounts disclosed under “Option Awards” is computed in accordance with FAS 123(R). Each of Messrs. Earhart, Ludwick, Majteles, Meyer and O’Shaughnessy and Ms. Quindlen was granted options to purchase 60,000 shares on July 15, 2008 at an exercise price of $14.29 per share. In addition, Mr. Majteles was granted options to purchase 15,000 shares on February 9, 2008 at an exercise price of $16.50 per share pursuant to Macrovision Corporation’s director compensation in effect prior to the acquisition of Gemstar. During 2008, none of the directors exercised any options.

As of December 31, 2008, the following directors held the following aggregate number of options outstanding: Mr. Earhart – 60,000 shares, of which 6,250 shares are exercisable; Mr. Ludwick—115,000 shares, of which 53,472 shares are exercisable; Mr. Majteles—135,000 shares, of which 75,416 shares are exercisable; Mr. Meyer—60,000 shares, of which 6,250 shares are exercisable; Mr. O’Shaughnessy—60,000 shares, of which 6,250 shares are exercisable; and Ms. Quindlen—60,000 shares, of which 6,250 shares are exercisable.

The following table shows how much of our common stock was beneficially owned as of February 18, 2009 by each director, each executive officer named in the summary compensation table, all executive officers and directors as a group, and by each holder of 5% or more of our common stock. To our knowledge and except as set forth in the footnotes to the table, the persons named in the table have sole voting and investment power with

respect to all shares shown as beneficially owned by them, subject to community property laws where applicable. Unless we indicate otherwise, each holder’s address is c/o Macrovision Solutions Corporation, 2830 De La Cruz Boulevard, Santa Clara, CA 95050.

The option column below reflects shares of common stock that are subject to options that are currently exercisable or are exercisable within 60 days of February 18, 2009. Those shares are deemed outstanding for the purpose of computing the percentage ownership of the person holding these options, but are not deemed outstanding for the purpose of computing the beneficial ownership of any other person. Percentage ownership is based on 100,970,031 shares outstanding on February 18, 2009. Certain options listed below may have exercise prices in excess of the current fair market value of our common stock.

The following table gives information about our common stock that may be issued under our existing equity compensation plans as of December 31, 2008. Our 2008 Equity Incentive Plan, 2008 Employee Stock Purchase Plan, 2000 Equity Incentive Plan, as amended, 2007 Long Term Incentive Plan and 1996 Equity Incentive Plan were all approved by our stockholders. We do not have any non-stockholder approved equity compensation plans.

From January 1, 2008 to the date of this report, there have not been any transactions, and there are currently no proposed transactions, in which the amount involved exceeded $120,000 to which we or any of our subsidiaries were or are to be a party and in which any executive officer, director, nominee for director, 5% beneficial owner of our common stock or member of their immediate family had or will have a direct or indirect material interest, except as described above under “Executive Compensation.” There are no business relationships between us and any entity of which a director of Macrovision is an executive officer or of which a director of Macrovision owns an equity interest in excess of 10%, involving indebtedness in excess of 5% of our total consolidated assets for 2008 or involving payments for property or services in excess of 5% of our (or the other entity’s) consolidated gross revenues for 2008.

We have a number of policies, procedures and practices that relate to the identification, review and approval of related party transactions. In accordance with our Corporate Governance Guidelines, our Board reviews the relationships that each director has with the Company and shall endeavor to have a majority of directors that are “independent directors” as defined by the SEC and Nasdaq rules. As part of the review process, the Company distributes and collects questionnaires that solicit information about any direct or indirect transactions with Macrovision from each of our directors and officers and legal counsel reviews the responses to these questionnaires and reports the any related party transactions to the Audit Committee. We may enter into arrangements in the ordinary course of our business that involve Macrovision receiving or providing goods or services on a non-exclusive basis and at arms-length negotiated rates or in accordance with regulated price schedules with corporations and other organization in which a Macrovision director, executive officer or nominee for director may also be a director, trustee or investor, or have some other direct or indirect relationship.

Our Code of Personal and Business Conduct and Ethics requires all directors, officers and employees to avoid any situation that involves an actual or apparent conflict of interest in personal and professional relationships or with their duty to, or with any interest of, Macrovision. Depending on the nature of the potential conflict, such related party transactions involving an employee require approval by our Ethics Compliance Officer, Chief Financial Officer or Chief Executive Officer. If such transaction is determined to be material to the Company by our Ethics Compliance Officer, Chief Financial Officer or Chief Executive Officer, our Audit Committee must review and approve in writing in advance such related party transactions. All related party transactions involving the Company’s directors or executive officers or members of their immediate families must be reviewed and approved in writing in advance by the Company’s Audit Committee.

As required by the Nasdaq Global Select Market’s (“Nasdaq”) listing standards, a majority of the members of our board must qualify as “independent,” as affirmatively determined by our board. Our board consults with our legal counsel to ensure that its determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq.

Consistent with these considerations, after review of all relevant transactions and relationships between each director, any of his or her family members, and Macrovision, our executive officers and our independent registered public accounting firm, the board has affirmatively determined that a majority of our board is comprised of independent directors. Our independent directors as of December 31, 2008 were Messrs. Earhart, Ludwick, Majteles, Meyer and O’Shaughnessy and Ms. Quindlen.

The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of Macrovision Solutions Corporation’s annual financial statements for 2008, and fees billed for other services rendered by Ernst & Young LLP during 2008. Ernst & Young LLP was selected as the Company’s principal accountant on June 5, 2008. KPMG LLP was the principal accountant for Macrovision Corporation in 2007 and Ernst & Young LLP was the principal accountant for Gemstar-TV Guide International, Inc. in 2007. KPMG LLP and Ernst & Young LLP’s fees were disclosed in each respective company’s 2007 10-K.

The audit committee must pre-approve all audit, review or attest services and, except as provided below, all non-audit services provided by our independent registered public accounting firm. However, for de minimis nonaudit services, the audit committee may approve such services after the fact if the following conditions are met:

During 2008, all such services were pre-approved by the audit committee in accordance with the audit committee pre-approval policy that is attached as an exhibit to our audit committee charter.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 28^th day of February, 2009.


MACROVISION SOLUTIONS CORPORATION

By:		/s/ ALFRED J. AMOROSO
		Alfred J. Amoroso
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant, and in the capacities and on the date indicated.

We have audited the accompanying consolidated balance sheet of Macrovision Solutions Corporation and subsidiaries as of December 31, 2008, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Macrovision Solutions Corporation and subsidiaries at December 31, 2008, and the consolidated results of their operations and their cash flows for the year ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Macrovision Solution Corporation’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2009 expressed an unqualified opinion thereon.

We have audited the accompanying consolidated balance sheet of Macrovision Solutions Corporation and subsidiaries (the Company), successor registrant to Macrovision Corporation, as of December 31, 2007, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the two-year period ended December 31, 2007. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Macrovision Solutions Corporation and subsidiaries as of December 31, 2007, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2007, the Company adopted the provision of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes, and effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, applying the modified-prospective method.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)

Macrovision Solutions Corporation (the “Company”) was formed in 2007. On May 2, 2008, Macrovision Corporation acquired Gemstar-TV Guide International, Inc. (“Gemstar”). Upon consummation of this transaction, Macrovision Solutions Corporation, a Delaware corporation, assumed ownership of both Gemstar and Macrovision Corporation. The common stock of Macrovision Corporation and Gemstar were de-registered and Macrovision Corporation stockholders were provided one share in Macrovision Solutions Corporation (the “Company”) for each share of Macrovision Corporation common stock owned as of the closing. In addition, all treasury stock held by Macrovision Corporation was cancelled. Macrovision Corporation is the predecessor registrant to Macrovision Solutions Corporation and has been determined to be the predecessor for accounting purposes; therefore, for periods prior to May 2, 2008, the consolidated financial statements reflect the financial position and results of operations and cash flows of Macrovision Corporation. The Company’s results of operations include the operations of Gemstar from May 2, 2008, forward.

The accompanying consolidated financial statements include the accounts of Macrovision Solutions Corporation and its wholly and majority owned subsidiaries after elimination of intercompany accounts and transactions.

On April 1, 2008, the Company closed the sale of its software and games businesses (hereafter referred to as “Software” and “Games”, respectively). As of December 31, 2007, the Company reported the assets and liabilities of Software and Games as held for sale. In November 2008, the Company closed the sale of its RightCommerce (also known as “eMeta”) business and in December 2008, the Company closed the sale of its TV Guide Magazine business. In addition, in 2008 the Company determined it was probable that it would divest its TVG Network, TV Guide Network and TV Guide Online businesses. As of December 31, 2008, the Company has reported the assets and liabilities of TV Guide Network, TV Guide Online and TVG Network as held for sale. The results of operations and cash flows of Software, Games, TV Guide Magazine, TV Guide Network, TV Guide Online, TVG Network and eMeta have been classified as discontinued operations for all periods presented (See Note 4). With the inclusion of these businesses in discontinued operations, the Company now has one reportable business segment.

Certain financial statement items for prior periods have been reclassified to conform to the 2008 presentation. These reclassifications include (i) recording depreciation expense in its own line item on the consolidated statements of operations and (ii) recording amortization of intangible assets as its own line item on the consolidated statements of operations. In addition, the Company reclassified finite-life intangible assets

totaling $70 million from Other Intangibles from Acquisitions and patents in the amount of $9 million from Patents and Other Assets into a single line item on the consolidated balance sheet at December 31, 2007.

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported results of operations during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, allowance for doubtful accounts, investments, equity-based compensation, goodwill and other intangible assets, long-lived assets and income taxes. Actual results could differ from those estimates.

The Financial Accounting Standards Board (“FASB”) recently issued FASB staff position (“FSP”) APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement) (“FSP 14-1”). FSP 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate on the instrument’s issuance date when interest cost is recognized. FSP 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years and shall be applied retrospectively to all periods presented. Early adoption of FSP 14-1 is not permitted. The Company has completed a preliminary analysis of the impact of FSP 14-1. The Company anticipates that the adoption of FSP 14-1 will result in an increase in interest expense of approximately $8.5 million, $7.8 million and $2.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.

In March 2008, the FASB issued Statement of Financial Accounting Standard (“SFAS”) No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 requires entities that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit-risk-related contingent features contained within derivatives. SFAS 161 also requires entities to disclose additional information about the amounts and location of derivatives located within the financial statements, how the provisions of SFAS 133 have been applied, and the impact that hedges have on an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company anticipates the adoption of SFAS 161 will not have a material impact on its financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). The standard clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. It requires consolidated net income to be reported at amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS 160 is effective for the Company for annual periods beginning after December 15, 2008. Earlier adoption is prohibited. The Company anticipates the adoption of SFAS 161 will not have a material impact on its financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141(R)”). The fundamental requirements of using the acquisition method of accounting (which SFAS 141 called the purchase method) for all business combinations, identifying an acquirer for each business combination, and identifying and recognizing intangible assets separately from goodwill remain unchanged by the standard. The

new requirements of the standard include: recognizing assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date; recognizing the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree in a step acquisition at the full amounts of their fair values; recognizing acquisition-related and restructuring costs separately from the acquisition itself; and recognizing a gain by the acquirer when total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree. SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. SFAS 141(R) is effective for the Company for transactions consummated during annual periods beginning after December 15, 2008. Earlier adoption is prohibited. SFAS 141 (R) also amends FASB Statement No. 109, Accounting for Income Taxes (“SFAS 109”), such that the effects of changes to deferred tax asset valuation allowances established in purchase price allocations are reported directly as a reduction of income tax expense. After SFAS 141(R) is adopted, all changes to tax uncertainties and deferred tax asset valuation allowances established in purchase accounting, should be recognized in accordance with the amended requirements of SFAS 109, even if the combination occurred prior to the effective date of SFAS 141 (R).

In April 2008, the FASB issued FSP No. SFAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP SFAS 142-3”). FSP SFAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The intent of FSP SFAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R) and other applicable accounting literature. FSP SFAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and must be applied prospectively to intangible assets acquired after the effective date.

The Company considers investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds. All other liquid investments with maturities over three months and less than 12 months are classified as short-term investments. Short-term investments in 2008 consist primarily of U.S. and municipal securities, commercial paper and corporate debt. Short-term investments in 2007 also included auction rate securities. All marketable securities with maturities over one year or those for which the Company’s intent is to retain for more than twelve months are classified as long-term marketable investment securities. As of December 31, 2008, all auction rate securities are included in long-term marketable securities.

The Company accounts for its publicly traded investments in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities and complies with the disclosure provisions of Emerging Issues Task Force (EITF) 03-01, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. Management determines the appropriate classification of investment securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income, as a separate component of stockholders’ equity. Trading securities are carried at fair value, with changes in fair value reported as part of interest and other income in the consolidated statements of operations.

Realized gains and losses and declines in value judged to be other-than-temporary for available-for-sale securities are reported in other income or expense as incurred. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale and trading are included in interest and other income.

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value (“SFAS 157”), except as it applies to those non-financial assets and non-financial liabilities as noted in FSP SFAS 157-2, Effective Date of FASB

Statement No. 157 (“FSP SFAS 157-2”). FSP SFAS 157-2, issued by the FASB in February 2008, defers the effective date of SFAS 157 for non-financial assets and liabilities to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The adoption of SFAS 157 primarily affected disclosure requirements and did not impact the Company’s financial position or operating results.

SFAS 157 establishes a three–tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

On January 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits companies to choose to measure certain financial instruments and certain other items at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings. On the date of adoption the Company did not elect to measure any assets or liabilities it currently held at fair value, and thus, the adoption did not impact the Company’s financial position or operating results.

The Company owns auction rate securities it acquired through UBS AG with a par value of $62.4 million. Due to the failure of the auction rate market in early 2008, UBS AG and other major banks entered into discussions with government agencies to provide liquidity to owners of auction rate securities. In December 2008, the Company entered into an agreement (the “Agreement”) with UBS AG which provides (1) the Company the right (“Put Option”) to sell these auction rate securities back to UBS AG at par, at the Company’s sole discretion, anytime during the period from June 30, 2010 through July 2, 2012, and (2) UBS AG the right to purchase these auction rate securities or sell them on the Company’s behalf at par anytime through July 2, 2012. The Company elected to measure the Put Option under the fair value option of SFAS No. 159, recorded income of approximately $10.4 million pre-tax, and recorded a corresponding long term investment. Simultaneously, the Company transferred these auction rate securities from available-for-sale to trading investment securities. As a result of this transfer, the Company recognized an other-than-temporary impairment loss of approximately $10.4 million pre-tax, reflecting a reversal of the related temporary valuation allowance that was previously recorded in other comprehensive loss. The recording of the Put Option and the recognition of the other-than-temporary impairment loss resulted in no material impact to the Consolidated Statement of Operations for the year ended December 31, 2008. The Company anticipates that any future changes in the fair value of the Put Option will be offset by the changes in the fair value of the related auction rate securities with no material net impact to the Consolidated Statement of Operations. The Put Option will continue to be measured at fair value utilizing Level 3 inputs until the earlier of its maturity or exercise. The Company’s auction rate securities which were not purchased from this investment firm continue to be classified as available-for-sale securities.

The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. The Company reviews its trade receivables by aging category to identify significant customers with known disputes or collection issues. For accounts not specifically identified, the Company provides reserves based on historical bad debt loss experience.

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets. Computer equipment and software are depreciated over three years. Furniture and fixtures are depreciated over five years. Leasehold improvements and assets recorded under capital leases are amortized on a straight-line basis over the shorter of the assets’ useful lives or lease terms.

The Company accounts for its 49% share of the operations of the Guideworks, LLC joint venture with Comcast Corporation as research and development expense in accordance with SFAS No. 68, Research and Development Arrangements. Other investments of 50% or less in entities in which the Company has the ability to exercise significant influence over operations are accounted for using the equity method.

Deferred revenue represents cash amounts received from customers under certain license, maintenance and service agreements for which the revenue earnings process has not been completed.

Comprehensive income includes net (loss) income, foreign currency translation adjustments and unrealized gains and losses, net of related taxes, on marketable investment securities that have been excluded from the determination of net (loss) income. The Company has reported the components of comprehensive income on its consolidated statements of stockholders’ equity. The change in unrealized gains and losses on investments during the year ended December 31, 2008 includes the reduction of $3.2 million, net of taxes, of unrealized gains related to Digimarc Corporation. These unrealized gains became realized when the Company sold this investment (See Note 9). Foreign currency translation adjustments during the year ended December 31, 2008 includes a reduction of $5.0 million due to the sale of Software.

The Company’s revenue from continuing operations consists of license fees for IPG products and patents, royalty fees on copy-protected products, licenses for its content protection technologies and certain software products. The Company follows the guidance of Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB 104”) and Emerging Issues Task Force (“EITF”) 00-21, Revenue Arrangements with Multiple Deliverables. Under this guidance, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable and (iv) collection is reasonably assured.

The Company licenses its proprietary IPG technology to consumer electronics (“CE”) manufacturers and to service providers. The Company generally recognizes revenue from IPG product and patent licensing on a per-unit shipped model (with CE manufacturers) or a per subscriber model (with service providers). The Company’s recognition of revenues from per-unit license fees is based on units reported shipped by the manufacturer. CE manufacturers normally report their unit shipments to us in the quarter immediately following that of actual shipment by the manufacturer. Revenues from per-subscriber fees are recognized in the period the services are provided by a licensee, as reported to us by the licensee. Revenues from annual or other license fees are recognized based on the specific terms of the license arrangement. For instance, certain IPG licensees enter into agreements for which they have the right to ship an unlimited number of units over a specified term for a flat fee. The Company records the fees associated with these arrangements on a straight-line basis over the specified term.

Royalty revenue from the replication of videocassettes, DVDs, and CDs and pay per view (“PPV”) products is recognized when realized or realizable and earned. The Company relies on royalty reports from customers and/or third parties as the basis for revenue recognition, provided there is persuasive evidence of an arrangement and that collection of a fixed and determinable fee is considered probable. In the Company’s DVD, videocassette and PPV product lines, the Company has established significant experience and relationships with certain customers to reasonably estimate current period volume for purposes of making an accurate revenue accrual. Accordingly, royalty revenue from these customers is recognized as earned. Revenue from other customers is recognized as reported until such time that the Company can establish a basis for making reasonable estimates, in which case revenue is recognized on an as-earned basis.

Technology licensing revenue, which applies principally to DVD and PC sub-assembly manufacturers, digital PPV, cable and satellite system operators and digital set-top decoder manufacturers, is recognized upon establishment of persuasive evidence of an arrangement, performance of all significant obligations and determination that collection of a fixed and determinable license fee is considered probable.

The Company continues to sell certain software products and solutions through its direct sales force. The Company recognizes revenue on continuing and discontinued software products in accordance with American Institute Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 97-2, Software Revenue Recognition, as amended by SOP No. 98-9 Modification of SOP No. 97-2, Software Revenue Recognition, With Respect to Certain Transactions. Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery of the product has occurred; no significant obligations remain; the fee is fixed or determinable; and collectibility is probable. Resellers are offered the limited right of return on packaged products under certain policies and programs. The Company estimates and records reserves for product returns as an offset to revenue. The Company considers arrangements with payment terms extending beyond six months not to be fixed or determinable and, accordingly, revenue is recognized as payments become due and payable from the customer under such arrangements. The Company assesses collectibility based on a number of factors, including the customer’s past payment history and current creditworthiness. If collectibility is not considered probable, revenue is recognized when the fee is collected from the customer.

The Company provides consulting and training services to its software customers. Revenue from such services is generally recognized as the services are performed, except in instances where services are included in an arrangement accounted for under SOP No. 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts.” Professional services revenues are included in services revenue in the accompanying statements of income.

Maintenance agreements generally call for the Company to provide technical support and unspecified software updates to customers. Maintenance revenue is deferred and recognized ratably over the maintenance contract period (generally one year).

In accounting for multiple-element arrangements, one of the key judgments to be made is the accounting value that is attributable to the different contractual elements. The appropriate allocation of value impacts the amount and timing of revenue recorded in the consolidated statement of operations during a given period.

For multiple-element arrangements the Company follows the guidance contained in EITF 00-21 and SAB 104. Under EITF 00-21, revenue arrangements with multiple deliverables are divided into separate units of accounting where the delivered item has value to the customer on a stand-alone basis and there is objective and reliable evidence of the fair value of the undelivered item. Consideration is allocated among the separate units of accounting based on their relative fair values.

Cost of revenues consists primarily of service costs, replicator fees and patent prosecution, patent maintenance and patent litigation costs. The Company has agreements with certain licensed duplicators, DVD replicators and DVD authoring facilities utilized by customers of the Company’s video copy protection technologies. The Company has agreed to pay these licensees on a specified fixed service fee or on a per unit basis when utilizing the Company’s copy protection technologies to help offset the cost of operating the Company’s copy protection equipment and reporting requirements of their contracts. Such amounts are charged to cost of revenues when incurred.

Effective January 1, 2006, the Company adopted the provisions of, and accounts for equity-based compensation in accordance with, SFAS No. 123—revised 2004, Share-Based Payment (“SFAS 123(R)”) which

replaced SFAS 123, Accounting for Stock-Based Compensations. In accordance with SFAS 123(R), equity-based compensation cost is measured at the grant date based on the fair value of the award. The Company recognizes compensation costs for shares that are expected to vest, on a straight-line basis, over the requisite service period of the award. The Company elected the modified-prospective method. Under this transition method, equity-based compensation includes the amortized value of vesting equity-based payments granted prior to January 1, 2006 based on the grant date fair value as determined under SFAS 123 and those granted subsequently in accordance with SFAS 123(R). Results for prior periods have not been restated.

Income taxes are accounted for under the asset and liability method of SFAS 109. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits of which future realization is not evaluated to be more likely than not.

The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), effective January 1, 2007. FIN 48 prescribes a new recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Upon its adoption, the Company applied the provisions of FIN 48 to all income tax positions. The cumulative effect of applying the provisions of FIN 48 have been reported as an adjustment to the opening balance of additional paid-in-capital in the consolidated balance sheet as of the beginning of 2007.

The Company adopted the provisions of EITF 06-03, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation), effective January 1, 2007. EITF No. 06-03 allows companies to choose either the gross basis or net basis of income statement presentation for taxes collected from customers and remitted to governmental authorities and requires companies to disclose such policy. The Company applies the net basis presentation for taxes collected from customers and remitted to governmental authorities.

The functional currency for the Company’s foreign subsidiaries is the applicable local currency. The translation of foreign currency denominated financial statements into United States Dollar is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenues and expense accounts using an average exchange rate for the respective periods. Adjustments resulting from such translation are included in comprehensive income. Gains or losses resulting from foreign currency transactions included in the consolidated statements of operations were not material in any of the periods presented. The Company has entered into foreign exchange forward contracts to reduce its exposure to foreign currency rate changes on cash, receivables and payables denominated in a nonfunctional currency. The objective of these contracts is to neutralize the impact of foreign currency exchange rate movements on the Company’s operating results. The Company does not designate its foreign exchange forward contracts as accounting hedges as defined by SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities and, accordingly, adjusts these instruments to fair value through operations.

Business and Concentration of Credit Risk and Fair Value of Financial Instruments

The Company licenses its video copy protection, CD-ROM copy protection and electronic license management software to customers in the home videocassette, DVD, cable and satellite pay-per-view, corporate communication markets, multimedia software markets and business software markets primarily in the United States, Europe, Japan, and the Far East. In 2008, 2007, and 2006, 5%, 20%, and 35%, respectively, of the Company’s continuing revenue was attributed to the licensing of its video content protection technology through Motion Picture Association of America movie studios. The Company also licenses its digital PPV video content protection technologies to satellite and cable television operators and to the equipment manufacturers that supply the satellite and cable television industries.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, marketable securities and trade accounts receivable. The Company places its cash and cash equivalents and marketable securities in deposits and money market funds with various high credit quality institutions.

The Company performs ongoing credit evaluations of its customers as necessary. As a percentage of net revenues from continuing operations, the Company had no customers that were equal to or greater than 10% of net revenue for the years ended December 31, 2008, and 2006. In 2007, the Company generated revenue from one customer which exceeded 10% of its net revenue from continuing operations. As a percentage of trade accounts receivable, net from continuing operations, the Company had one customer that was equal to or greater than 10% as of December 31, 2008 and two customers that were equal to or greater than 10% as of December 31, 2007.

Basic EPS is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of loss from continuing operations for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of common stock issuable upon exercise of stock options and restricted stock using the treasury stock method.

The following weighted average potential common shares were excluded from the computation of diluted net earnings per share as their effect would have been anti-dilutive:

In accordance with SFAS 142, goodwill is reviewed for impairment annually, or more frequently, if facts and circumstances warrant a review. The provisions of SFAS 142 require that a two-step test be performed to assess goodwill for impairment. First, the fair value of each reporting unit is compared to its carrying value. If the fair value exceeds the carrying value, goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value. The implied fair value of the reporting unit’s goodwill must be determined and compared to the carrying value of the goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference will be recorded.

In accordance with SFAS 142, intangible assets with definite lives are amortized over their estimated useful life, generally three to twenty years, and reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 144 (“SFAS 144”), Accounting for the Impairment or Disposal of Long-Lived Assets.

Effective October 1, 2008, the Company performed its annual impairment analyses of goodwill. Based on the results of the annual impairment analysis, the Company determined no indicators of impairment existed for its continuing operations. See Note 4 for discontinued operations.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed of, Excluding Goodwill and Indefinite-Lived Intangible Assets

Under SFAS 144, which excludes goodwill and other indefinite-lived intangible assets from its scope, the Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. If required, the impairment recognized is the difference between the fair value of the asset and its carrying amount.

Capitalization of software development costs begins upon the establishment of technological feasibility, which is generally the completion of a working prototype that has been certified as having no critical bugs and is a release candidate or when alternative future use exists. To date, software development costs incurred between completion of a working prototype and general availability of the related product have not been material and have not been capitalized.

Expenditures for research and development are expensed as incurred. The Company had no capitalized research and development costs as of December 31, 2008 or 2007.

The Company expenses all advertising costs as incurred and for its continuing operations classifies these costs under selling, general and administrative expense.

Depreciation expense for our continuing operations for the years ended December 31, 2008, 2007, and 2006 were $13.8 million, $5.1 million, and $5.3 million, respectively.

On May 2, 2008, the Company acquired Gemstar in a cash and stock transaction. Gemstar was a technology, media and entertainment company that developed, licensed, marketed and distributed products and services targeted at the video guidance and entertainment needs of consumers worldwide.

The Company is accounting for the transaction under the purchase method of accounting in accordance with the provisions of SFAS No. 141, Business Combinations. The total purchase price for Gemstar was approximately $2.65 billion and was comprised of the following (in thousands):

Upon closing, each share of Gemstar stock was converted, based upon each individual stockholder’s election, into $6.35 in cash or 0.2548 of a share of common stock in Macrovision Solutions Corporation. Cash elections were prorated such that, in the aggregate, Gemstar security holders received cash consideration of approximately $1.5 billion. The Company issued approximately 48.7 million shares to Gemstar stockholders as part of the transaction. The fair value of Macrovision Solutions Corporation’s shares issued in the transaction was based on a price of $22.04 per share, which represents the average closing price of Macrovision Corporation shares for the five trading days beginning two trading days before and ending two trading days after December 7, 2007, the date on which the acquisition was announced. Gemstar stock options and restricted stock units outstanding immediately prior to the closing were cancelled and the holders were paid cash per share in an amount equal to the $6.35 in cash per share less the exercise price. Acquisition related costs include legal, investment banking, accounting fees and other external costs directly related to the acquisition.

The Company, based upon estimated fair values as of May 2, 2008, made an allocation of the purchase price to the net tangible and intangible assets acquired. The excess of the purchase price over the estimated fair value of the underlying net tangible and intangible assets has been recorded as goodwill. The Company acquired Gemstar to increase its product offerings and believes the combined Company’s complementary solutions will lead to increased market opportunity and an expanded customer base. The combination of the Company and Gemstar also provides the opportunity for cost savings. The Company believes these factors support the amount of goodwill recorded. The goodwill from this transaction is not tax deductible. The allocation of purchase price is subject to change based on additional information analyzed within the purchase price allocation period.

Developed technology and patents relate to Gemstar’s products that are technologically feasible and Gemstar’s patents. Trademarks/Tradenames are primarily related to Gemstar’s brands and tradenames acquired. Customer relationships represent existing contracts that relate primarily to underlying customer relationships. Content represents the database of program listings and descriptions gathered over time. Identifiable intangible assets will be amortized on a straight-line basis over their estimated useful lives. Included in deferred tax liabilities, net is a $378 million deferred tax asset (See Note 12).

In December 2007, the Company acquired All Media Guide Holdings, Inc. (“AMG”), a privately-held company based in Michigan, for a total of $82.3 million of purchase consideration, in a taxable transaction. AMG was one of the world’s largest providers of information databases and metadata for entertainment products (music, movies, and games) as well as solutions that support the recognition, discovery and management of digital media.

In November 2007, the Company acquired SPDC from a privately held business in a taxable transaction, for $45.2 million, plus warrants exercisable for 0.9 million shares of Macrovision stock valued at $8.4 million. SPDC created the BD+ technology.

On January 1, 2007, the Company acquired Mediabolic, Inc. (“Mediabolic”), a privately held company based in San Mateo, California, for $43.6 million. Mediabolic was a provider of software solutions for connected consumer electronics devices, such as televisions, set-top boxes and digital video recorders.

The unaudited pro forma financial information presented below (in thousands) assumes the acquisition of Gemstar, AMG, and SPDC had occurred on January 1, 2007. The unaudited pro forma financial information does not include the results of Software, Games, TV Guide Magazine, TV Guide Network, TV Guide Online, TVG Network and eMeta as these businesses have been classified as discontinued operations. The unaudited pro forma financial information assumes $275 million of net proceeds from the sale of these businesses was used to reduce the amount of debt outstanding as of January 1, 2007. The unaudited pro forma information presented is for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the acquisition had been completed on the date indicated, nor is it indicative of future operating results. The unaudited pro forma financial information does not include any adjustments for operating efficiencies or cost savings.

The assets and liabilities attributable to the Company’s TV Guide Network and TV Guide Online business classified in the Consolidated Balance Sheet as held for sale consist of the following (in thousands):

The Company evaluated the potential impairment of both the intangible assets and goodwill related to the TV Guide Network and TV Guide Online business in accordance with SFAS 144 and 142. The Company estimated the fair value of the TV Guide Network and TV Guide Online business based on the proceeds the Company expects to receive from the disposition of the business (See Note 16). Based on this analysis the Company concluded there was an impairment charge of $127.2 million related to the goodwill and $11.1 million related to the intangible assets of this business in the fourth quarter of 2008.

The assets and liabilities attributable to the Company’s TVG Network business classified in Consolidated Balance Sheet as held for sale consist of the following (in thousands):

The Company evaluated the potential impairment of both the intangible assets and goodwill related to the TVG Network business in accordance with SFAS 144 and 142. The Company estimated the fair value of TVG Network based on the proceeds the Company received from the disposition of TVG Network (See Note 16). Based on this analysis the Company concluded there was an impairment charge of $49.5 million related to the goodwill and $20.5 million related to the intangible assets of this business in the fourth quarter of 2008.

On December 1, 2008, an affiliated company of OpenGate Capital, LLC (Buyer), purchased the assets and assumed the liabilities of the TV Guide Magazine business for a cash purchase price of less than $0.1 million. In connection with the transaction, Buyer assumed certain liabilities of the TV Guide Magazine business, and the Company loaned the Buyer $7.4 million.

In November 2008, the Company sold its eMeta business for $0.8 million. In the third quarter of 2008, based on the offers the company received to acquire the eMeta business, the Company conducted an analysis to estimate the fair value of eMeta’s goodwill and intangible assets. As a result, the Company recorded impairment charges totaling $5.3 million for goodwill and $1.4 million for the intangible assets of eMeta. The Company’s 2007 and 2006 results of operations, cash flows and disclosures on discontinued businesses have been revised to include eMeta.

On April 1, 2008, the Company sold its Software business unit for $191 million in cash.

The assets and liabilities attributable to the Software business classified in the Consolidated Balance Sheet as held for sale consist of the following (in thousands):

On April 1, 2008, the Company sold its Games business for $4 million in cash. The assets attributable to the Games business classified in the Consolidated Balance Sheet as assets held for sale consist of the following (in thousands):

The Company evaluated the potential impairment of both the intangible assets and goodwill related to the Games business in accordance with SFAS 144 and 142. Based on this analysis the Company concluded there was an impairment of intangible assets related to the Games business and recorded an impairment charge of $4.7 million related to this business during the fourth quarter of 2007. Of the $4.7 million, $1.9 million relates to fixed assets and $2.8 million relates to identifiable intangibles.

The results of operations of the Company’s discontinued businesses through the date of disposition consists of the following (in thousands):

The Company assesses goodwill and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if circumstances indicate impairment may have occurred. To accomplish this, the Company determined the fair value of each reporting unit based on discounted expected cash flows and compared it to the carrying amount of the reporting unit at the balance sheet date. There were no impairment charges related to continuing operations for any of the reported periods since the value of each reporting unit exceeded the carrying amount. See Note 4 regarding impairment charges for discontinued operations.

The following tables summarize the Company’s intangible assets for its continuing operations subject to amortization as of December 31, 2008 and 2007 (in thousands)

The following table summarizes the Company’s estimated amortization expense through the year 2013 and thereafter (in thousands):

Note issuance costs of approximately $27.7 million related to the Term Loan are being amortized to interest expense over the term of the Term Loan and have been included in “Other Assets” on the consolidated balance sheet. The fair value of the Term Loan is approximately $504 million as of December 31, 2008.

Note issuance costs of approximately $6.8 million related to the Senior Notes are being amortized to interest expense over the term of the Senior Notes and have been included in “Other Assets” on the consolidated balance sheet. The fair value of the Senior Notes is approximately $100 million as of December 31, 2008.

In August 2006, the Company issued, in a private offering, $240.0 million in 2.625% convertible senior notes (Convertible Notes) due 2011 at par . The Convertible Notes may be converted, under certain circumstances described below, based on an initial conversion rate of 35.3571 shares of common stock per $1,000 principal amount of notes (which represents an initial conversion price of approximately $28.28 per share).

Prior to June 15, 2011, holders may convert their Convertible Notes into cash and the Company’s common stock, at the applicable conversion rate, under any of the following circumstances: (i) during any fiscal quarter after the calendar quarter ending September 30, 2006, if the last reported sale price of the Company’s common

stock for at least 20 trading days during the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 120% of the applicable conversion price in effect on the last trading day of the immediately preceding fiscal quarter; (ii) during the five business-day period after any ten consecutive trading-day period (the “measurement period”) in which the trading price per note for each day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such day; or (iii) upon the occurrence of specified corporate transactions, as defined in the indenture. From June 15, 2011 until the close of business on the scheduled trading day immediately preceding the maturity date of August 15, 2011, holders may convert their Convertible Notes into cash and shares of the Company’s common stock, if any, at the applicable conversion rate, at any time, regardless of the foregoing circumstances.

The Company pays cash interest at an annual rate of 2.625%, semi-annually on February 15 and August 15 of each year. Note issuance costs of approximately $7.2 million are being amortized to interest expense over the term of the Convertible Notes and have been included in “Other Assets” on the consolidated balance sheet. The fair value of the Convertible Notes on December 31, 2008 was approximately $176 million.

Concurrently with the issuance of the Convertible Notes, the Company entered into a convertible bond call option whereby the Company has options to purchase up to 7.96 million shares, subject to anti-dilution adjustments similar to those contained in the Convertible Notes, of the Company’s common stock at a price of approximately $28.28 per share. These options expire on August 15, 2011 and must be settled in net shares. The cost of the convertible bond call option was approximately $46.1 million and has been recorded as a reduction to stockholders’ equity in accordance with EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, (“EITF 00-19”.)

In addition, the Company sold warrants to purchase up to 7.96 million shares of its common stock at a price of $32.9248 per share. The warrants expire on various dates from August 16, 2011 through the 104^th scheduled trading day following August 16, 2011, and must be settled in net shares. The Company received approximately $30.3 million in cash proceeds for the sales of these warrants which have been recorded as an increase to stockholders’ equity in accordance with EITF 00-19.

The aggregate amount of long-term debt payments due in each of the next five years is as follows (in thousands):

The following is a summary of available-for-sale and other investment securities (in thousands) as of December 31, 2008:

The following is a summary of available-for-sale securities (in thousands) as of December 31, 2007:

In 2008 the Company recognized $10.4 million in other-than-temporary impairments due to the transfer of certain auction rate securities from available-for-sale to trading (See Note 1). There were no recognized losses from other-than-temporary declines in the market value of marketable securities in 2007 and 2006.

In accordance with EITF 03-1, the following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2008 and 2007 (in thousands):

Market values were determined for each individual security in the investment portfolio. The Company attributes the unrealized losses in its auction rate securities portfolio to liquidity issues rather than credit issues. The Company’s available-for-sale auction rate securities portfolio at December 31, 2008 is comprised solely of AAA rated investments, in federally insured student loans and municipal and educational authority bonds. Due to the Company’s belief that the market for such securities may take in excess of twelve months to fully recover and because the Company has the ability and intent to hold these investments until the market recovers, the Company has classified these investments as long-term marketable securities on the Consolidated Balance Sheet at December 31, 2008. The Company continues to earn interest on all of its auction rate security instruments.

The following inputs were used to determine the fair value of the Company’s investment securities at December 31, 2008 (in thousands):

The following table provides a summary of changes in the Company’s Level 3 investments (in thousands):

In conjunction with the Gemstar acquisition, management acted upon a pre-acquisition plan to restructure certain Gemstar operations resulting in severance of $21.2 million. This was done in order to create cost efficiencies for the combined Company. The severance liability was recognized as an assumed liability in the Gemstar acquisition and, accordingly, resulted in an increase to goodwill. The Company has paid $19.1 million of these costs as of December 31, 2008, and had a remaining liability of $2.1 million. Restructuring accruals are classified on the balance sheet as “Accrued expenses”. The Company anticipates paying the remaining liability in the first quarter of 2009.

During fiscal year 2007, the Company’s Board of Directors approved several restructuring actions and an organizational realignment program. In addition, the Company discontinued its Hawkeye anti-piracy service. In connection with these actions, the Company recognized a total of $19.1 million in restructuring and asset impairment charges, of which $4.5 million relates to continuing operations. The continuing operations amount consists of $2.5 million in workforce reduction costs, $1.1 million in contract terminations, $0.5 million in asset impairment charges, and $0.4 million in abandonment of certain leased facilities. Workforce reduction costs consist of severance and related benefits in connection with the restructuring actions, the organizational realignment program and the discontinuation of the Hawkeye anti-piracy service. Contract terminations were related to the cancellation of certain service contracts in connection with the data center restructuring program and the discontinuation of the Hawkeye anti-piracy service. Asset impairment charges were related to asset losses in connection with the data center restructuring and the discontinuation of the Hawkeye anti-piracy service. The charge for the abandonment of leased facilities is related to the New York office space that was vacated in connection with the restructuring programs.

A summary of the restructuring and asset impairment amounts included in the Company’s consolidated statements of operations and the restructuring accrual activity was as follows (in thousands):

The Company has accounted for its restructuring charges and accruals in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities and its asset impairment charges in accordance with SFAS No. 144.

As of December 31, 2008, the amounts remaining in the reserves are expected to be paid in the first half of 2009.

In 2006, the Company invested $5.0 million in a privately-held digital watermarking company. During the year ended December 31, 2007, the Company recorded a $5.0 million charge for other-than-temporary impairment losses related to such investment. As of December 31, 2007, the Company had an investment with an adjusted cost of $17.8 million in Digimarc Corporation (“Digimarc”), a publicly traded company. The Company’s investment in Digimarc has been classified on the balance sheet as “Long-term marketable securities” at December 31, 2007. During 2008, the Company sold its investment in Digimarc and recorded a gain of $5.2 million.

The Company’s stockholders, on July 15, 2008, approved the 2008 Equity Incentive Plan (the “2008 Plan”) and the 2008 Employee Stock Purchase Plan (the “2008 ESPP”). The Company no longer makes award grants under the Gemstar-TV Guide 2007 Long-Term Incentive Plan and, except with respect to award grants made to the Company’s chief executive officer, the Company will no longer make award grants under the 2000 Equity Incentive Plan (the “2000 Plan”). The 2000 and 2008 Plans provide for the grant of stock options, restricted stock awards and similar types of equity awards by the Company to employees, officers, directors and consultants of the Company. The 2008 ESPP has replaced the 1996 Employee Stock Purchase Plan. The Company also terminated the 1996 Directors Stock Option Plan in connection with the closing of the Gemstar acquisition.

As of December 31, 2008, the Company had 29.6 million shares reserved and 15.8 million shares remained available for issuance. For options granted after July 15, 2008, the vesting period was generally four years where one quarter vests at the end of the first year, and the remainder vests monthly. For options granted prior to July 15, 2008, the vesting periods were generally three years where one-sixth vests in the first year, one-third vests in the second year and the remainder vests in the third year. Option grants have contractual terms ranging from five to ten years.

During the year ended December 31, 2008, restricted stock awards were issued from the 2000 Plan and vest annually over four years. Restricted stock awards are considered outstanding at the time of the grant, as the stockholders are entitled to dividends and voting rights. As of December 31, 2008, the number of shares awarded but unvested was 809,000.

The 2008 ESPP allows eligible employee participants to purchase shares of the Company’s common stock at a discount through payroll deductions. The 2008 ESPP consists of a twenty-four-month offering period with four six-month purchase periods in each offering period. Employees purchase shares in each purchase period at 85% of the market value of the Company’s common stock at either the beginning of the offering period or the end of the purchase period, whichever price is lower.

As of December 31, 2008, the Company had reserved, and available for future issuance, 7.5 million shares of common stock for issuance under the ESPP.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options and employee stock purchase plan shares. The fair value of equity-based payment awards on the date of grant is

determined by an option-pricing model using a number of complex and subjective variables. These variables include expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. The Company determines the fair value of its restricted stock awards as the difference between the market value of the awards on the date of grant less the exercise price of the awards granted.

Estimated volatility of the Company’s common stock for new grants is determined by using a combination of historical volatility and implied volatility in market traded options. When historical data is available and relevant, the expected term of options granted is determined by calculating the average term from historical stock option exercise experience. When there is insufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to changes in the terms of option grants, the Company uses the “simplified method” as permitted under Staff Accounting Bulletin No. 110. For options granted after July 15, 2008, the Company changed its vesting terms from three to four years and its contractual term from five to seven years. Since the Company did not have sufficient data for options with four year vesting terms and seven year contractual life, the simplified method was used to calculate expected term. The risk-free interest rate used in the option valuation model is from U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. In accordance with SFAS 123(R), the Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record equity-based compensation expense only for those awards that are expected to vest. The weighted-average assumptions used to value equity-based payments are as follows:

As of December 31, 2008, there was $32.5 million of unrecognized compensation cost for continuing operations, adjusted for estimated forfeitures, related to non-vested equity-based payments granted to employees. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures and is expected to be recognized over a weighted average period of 2.5 years. The Company recorded $13.6 million, $9.8 million and $12.9 million in stock compensation expense from continuing operations for the years ended December 31, 2008, 2007 and 2006, respectively.

The weighted average fair value of options granted during the years ended December 31, 2008, 2007 and 2006 was $4.96, $8.23, and $7.21, respectively. The weighted average fair value of an employee purchase share right granted during the years ended December 31, 2008, 2007, and 2006 was $3.98, $6.19, and $4.80, respectively. The weighted average fair value of a restricted stock award granted during the years ended December 31, 2008, 2007, and 2006 was $15.50, $24.86, and $21.50, respectively. The total intrinsic value of options exercised during the years ended December 31, 2008, 2007, and 2006 was $0.6 million, $23.7 million, and $11.4 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

In September 2007, the Board of Directors of Macrovision Corporation authorized a stock repurchase program, which allowed Macrovision Corporation to purchase up to $60.0 million of the Macrovision Corporation’s common stock in the open market from time to time at prevailing market prices or otherwise, as conditions warrant. On May 5, 2008, the Board of Directors of Macrovision Solutions Corporation reconfirmed this stock purchase program. During the fourth quarter of 2008, the Company repurchased 2.3 million shares of common stock for $25.1 million. These repurchases were recorded as treasury stock and resulted in a reduction of stockholders’ equity. As of December 31, 2008, treasury stock consisted of 2.3 million shares of common stock that had been repurchased, with a cost basis of approximately $25.1 million.

In August 2006, the Board of Directors of Macrovision Corporation authorized the purchase of up to $100.0 million of Macrovision Corporation’s common stock. In the year ended December 31, 2006, Macrovision Corporation repurchased approximately 2.3 million shares of common stock for $50.0 million. In August and September 2007, Macrovision Corporation repurchased the remaining $50.0 million authorized under the program, or approximately 2.1 million shares of common stock. These repurchases were recorded as treasury stock and resulted in a reduction of stockholders’ equity. As of December 31, 2007, there were no shares remaining for repurchase under the August 2006 program. As of December 31, 2007 treasury stock consisted of

7.4 million shares of common stock that had been repurchased, with a cost basis of approximately $138.4 million. As part of Macrovision Solutions Corporation assumption of ownership of both Gemstar and Macrovision Corporation (See Note 1) all treasury stock held by Macrovision Corporation was canceled.

The components of income from continuing operations before income taxes are as follows (in thousands):

Income tax expense for the years ended December 31, 2008, 2007 and 2006 consisted of the following (in thousands):

Income tax expense for the years ended December 31, 2008, 2007, and 2006 differed from the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income as a result of the following (in thousands):

The tax effects of the temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below (in thousands):

As of December 31, 2008, the Company released a valuation allowance of $3.6 million for capital loss carryforwards due to its ability to recognize these deferred tax assets. In addition, the Company increased net deferred tax assets recorded in conjunction with the Gemstar acquisition by $378 million with an offsetting decrease in goodwill.

As of December 31, 2008, the Company had federal tax loss carryforwards of approximately $1.057 billion, of which $13.2 million related to stock option deductions and are not included in deferred tax assets. The federal loss carryforwards will expire in 2012 through 2028. The Company has state net operating loss carryforwards of approximately $37.3 million as of December 31, 2008. The state loss carryforwards will expire in 2009 through 2017.

The Company has federal research and development and foreign tax credits available to reduce future income tax expense of approximately $4.2 million and $5.6 million, respectively. The federal research credits will expire in 2024 through 2028 and the foreign tax credits will expire in 2014 through 2018.

Utilization of state and federal net operating loss and credit carryforwards may be subject to limitations due to ownership changes.

As disclosed in Note 1, the Company adopted the provisions of FIN 48 as of January 1, 2007. At December 31, 2008, the Company had gross tax-affected unrecognized tax benefits of $304.8 million of which $302.7 million, if recognized, would impact the effective tax rate, while the remaining amount would impact additional-paid-in-capital. During the year ended December 31, 2008 the Company recorded interest related to unrecognized tax benefits of approximately $3.5 million. Total accrued interest and penalties at December 31, 2008 was $20.1 million. Interest and penalties are classified in income tax expense. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

As of December 31, 2008, $52.9 million of the gross tax-affected unrecognized tax benefits have been recorded in long-term liabilities and $251.9 million have been recorded as an offset to long-term deferred tax assets.

The Company has not provided U.S. Federal or state taxes on approximately $81.8 million of undistributed earnings of non-U.S. subsidiaries as such earnings are considered to be permanently reinvested outside the U.S.

The Company conducts business globally and as a result files U.S. federal, state and foreign income tax returns in various jurisdictions. During 2008, the Internal Revenue Service concluded its examination of the Company’s federal income tax returns for 2003 and 2004. With few exceptions, the Company is no longer subject to income tax examinations for years prior to 2004.

The Company leases its facilities and certain equipment pursuant to noncancelable operating lease agreements expiring through 2019. The Company’s corporate headquarters are located in Santa Clara, California and such leases expire in January 2017. The Company also leases office space in Ann Arbor, Bedford, Burbank, Los Angeles, Illinois, New York, Radnor, San Francisco, Tulsa, the United Kingdom, Luxembourg, Canada and Japan, which expire at various dates from 2009 through 2019. The Company records rent expense on a straight-line basis based on contractual lease payments. Allowances from lessors for tenant improvements have been included in the straight-line rent expense for applicable locations. Tenant improvements are capitalized and depreciated over the remaining life of the applicable lease. The Company also leases certain computer software under a capital lease agreement which expires on March 1, 2009. Amortization of assets recorded under the capital lease is included in depreciation expense.

Future minimum lease payments pursuant to these leases as of December 31, 2008 were as follows (in thousands):

Rent expense from continuing operations was $13.5 million, $5.2 million, and $4.5 million, for the years ended December 31, 2008, 2007, and 2006, respectively. Included in assets held for sale at December 31, 2008, is a capital lease for a satellite transponder used by the Company’s TV Guide Network business. Payments under this lease are $1.6 million each year through 2019.

In the normal course of business, the Company provides indemnification of varying scopes and amounts to certain of its licensees against claims made by third parties arising out of the use and/or incorporation of the Company’s products, intellectual property, services and/or technologies into the licensee’s products and services, provided the licensee is not in violation of the terms and conditions of the agreement and/or additional performance or other requirements for such indemnification. The Company’s indemnification obligations are typically limited to the cumulative amount paid to the Company by the licensee under the license agreement, however some license agreements, including those with our largest multiple system operators (“MSO”) and digital broadcast satellite (“DBS”) providers, have larger limits or do not specify a limit on amounts that may be payable under the indemnity arrangements. The Company cannot estimate the possible range of losses that may affect the Company’s results of operations or cash flows in a given period or the maximum potential impact of these indemnification provisions on its future results of operations.

later, an amended complaint, against Magna Entertainment Corp. (“MEC”), HRTV, LLC (“HRTV”) and XpressBet, Inc. (“XpressBet”) in the United States District Court for the Central District of California. ODS asserts that defendants infringe five of its patents related to interactive off-track wagering systems. ODS seeks injunctive relief prohibiting further infringement by defendants as well as damages, including damages attributable to defendants’ allegedly willful infringement. In response, MEC, XpressBet and HRTV asserted that they do not infringe the subject patents, that the subject patents are invalid, and that the subject patents are unenforceable. On June 25, 2008, MEC and XpressBet filed a motion for summary judgment asserting that neither of them infringe the asserted claims of the ‘354 patent. The hearing date on that motion has been taken off calendar pending completion of discovery, which is ongoing. In connection with the divestiture of TVG Network (See Note 16), the purchaser agreed to assume liability for this matter.

breach of implied in fact indemnity and warranty of title against infringement, and unjust enrichment. Thomson seeks a declaration from the Court that the Company owes Thomson defense and indemnity for claims regarding the patents at issue in the SuperGuide matter, compensatory damages, including fees and expenses paid by Thomson in connection with the SuperGuide matter, the return of royalties paid by Thomson to the Company under the aforementioned agreements, pre and post-judgment interest, punitive damages, attorney fees, and costs of suit.

Youbet.com, Inc. v. ODS Technologies, L.P. and ODS Properties, Inc., American Arbitration Association. In this matter, filed December 9, 2008, the plaintiff alleges that the defendants overcharged them in wagering fees at various horse tracks, and claims damages in excess of $11.0 million dollars. In connection with the divestiture of TVG Network (See Note 16), the purchaser agreed to assume liability for this matter.

In addition to the items listed above, Macrovision Solutions Corporation is party to various legal actions, claims and proceedings as well as other actions, claims and proceedings incidental to its business. Macrovision Solutions Corporation has established loss provisions only for matters in which losses are probable and can be reasonably estimated. Some of the matters pending against Macrovision Solutions Corporation involve potential compensatory, punitive or treble damage claims, or sanctions, that if granted, could require them to pay damages or make other expenditures in amounts that could have a material adverse effect on their financial position or results of operations. At this time management has not reached a determination that any of the matters listed above or Macrovision Solution Corporation’s other litigation are expected to result in liabilities that will have a material adverse effect on our financial position or results of operations or cash flows.

On January 5, 2009, the Company signed a definitive agreement to sell its TV Guide Network and TV Guide Online businesses to Lions Gate Entertainment, Inc., a wholly-owned subsidiary of Lions Gate Entertainment Corp., for approximately $255 million in cash and assumed liabilities, subject to working capital and other indebtedness adjustments. The Company currently expects the sale to close in the first quarter of 2009.

On January 27, 2009, the Company closed the sale of its TVG Network business, for approximately $50 million in cash and assumed liabilities, subject to working capital and other indebtedness adjustments.

The Company will utilize the net sales proceeds to pay down its Senior Secured Term Loan Credit Facility upon the closing of these sales.


Delaware		26-1739297
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)
2830 De La Cruz Boulevard Santa Clara, California		95050
(Address of principal executive offices)		(Zip Code)


Title of Each Class		Name of Exchange on Which Registered
Common Stock, $.0.001 Par Value		The NASDAQ Global Select Market


PART I

ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	15
ITEM 1B.	UNRESOLVED STAFF COMMENTS	34
ITEM 2.	PROPERTIES	34
ITEM 3.	LEGAL PROCEEDINGS	35
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	37

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY , RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	38
ITEM 6.	SELECTED FINANCIAL DATA	41
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	56
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	57
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	57
ITEM 9A.	CONTROLS AND PROCEDURES	57
ITEM 9B.	OTHER INFORMATION	60

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	60
ITEM 11.	EXECUTIVE COMPENSATION	65
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	84
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	86
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	87

PART IV

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	89

	SIGNATURES	93


Location	Approximate Square Footage		Lease Expiration
Santa Clara, California (Corporate Headquarters)	100,000	(1)	January 2017
Radnor, Pennsylvania	71,000	(2)	January 2015
Tulsa, Oklahoma	82,000		March 2009
Burbank, California	62,000		July 2019
New York, New York	50,000	(3)	December 2015
Ann Arbor, Michigan	34,000		January 2011
Los Angeles, California	27,000		April 2010
San Francisco, California	20,000		July 2013
Bedford, Massachusetts	16,000		December 2013


	High		Low
*2008*
Second Quarter (since May 2, 2008)	$	17.55	$	12.76
Third Quarter	$	18.62	$	13.78
Fourth Quarter	$	15.59	$	8.46


	Macrovision Solutions Corporation		NASDAQ Composite Index		S&P 500		Russell 2000 Index
May 2, 2008	$	100	$	100	$	100	$	100
December 31, 2008	$	76	$	64	$	64	$	69


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
October 1-31, 2008	—		—	—		—
November 1-30, 2008	2,262,975	$	11.08	2,262,975		—
December 1-31, 2008	—		—	—		—

Total	2,262,975	$	11.08	2,262,975	$	34,932,123


	Year Ended December 31,
	2008			2007 (1)			2006 (1)(4)			2005 (1)			2004 (1)
	(in thousands, except per share data)
Consolidated Statements of Operations Data:
Revenues	$	330,045		$	144,943		$	111,569		$	96,348		$	106,129

Costs and expenses:
Cost of revenues		44,568			9,238			9,806			4,496			5,106
Research and development		67,714			13,204			14,565			9,269			11,883
Selling, general and administrative		114,614			55,316			48,027			41,070			34,471
Depreciation		13,832			5,090			5,288			3,602			2,364
Amortization		59,139			5,981			3,256			3,209			3,053
Restructuring and asset impairment charges (2)		—			4,546			—			1,030			—

Total costs and expenses		299,867			93,375			80,942			62,676			56,877

Operating income from continuing operations		30,178			51,568			30,627			33,672			49,252
Interest expense		(46,380	)		(7,602	)		(2,895	)		—			—
Interest income and other, net		11,732			23,199			12,087			5,465			4,173
Gain on sale of strategic investments		5,238			—			—			—			1,220
Impairment losses on strategic investments		—			(5,000	)		—			(5,822	)		(5,478	)

Income from continuing operations before income taxes		768			62,165			39,819			33,315			49,167
Income tax (benefit) expense		(20,157	)		16,128			9,755			17,723			18,578

Income from continuing operations, net of tax		20,925			46,037			30,064			15,592			30,589
Discontinued operations, net of tax (1)		(129,783	)		(14,537	)		2,979			6,523			6,141

Net (loss) income	$	(108,858	)	$	31,500		$	33,043		$	22,115		$	36,730


	December 31,
	2008		2007		2006		2005		2004
	(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents, short and long-term investments	$	362,057	$	439,289	$	456,390	$	249,704	$	241,670
Working capital		561,118		438,714		292,677		218,610		208,076
Total assets		2,641,060		937,158		819,615		497,925		452,473
Long-term liabilities (3)		966,744		297,462		243,559		959		979
Total stockholders’ equity		1,499,284		555,618		466,142		428,150		398,344


	Payments due by period
Contractual Obligations	Total		Less Than 1 year		1-3 years		3-5 years		More Than 5 years
Long-term debt obligations	$	887,250	$	5,500	$	251,000	$	630,750	$	—
Interest expense associated with long-term debt obligations		221,527		55,111		100,435		65,981		—
Capital lease obligations		347		347		—		—		—
Operating lease obligations		113,413		18,167		33,160		25,464		36,622

	$	1,222,537	$	79,125	$	384,595	$	722,195	$	36,622


Name of Director Nominee	Age	Director Since		Position
Alfred J. Amoroso	58	2005	*	Director
Andrew K. Ludwick	63	2006	*	Chairman of the Board; Independent Director
Alan L. Earhart	65	2008		Independent Director
Robert J. Majteles	44	2006	*	Independent Director
James E. Meyer	54	1997	**	Independent Director
James P. O’Shaughnessy	61	2004	**	Independent Director
Ruthann Quindlen	54	2004	**	Independent Director


Name	Age	Positions
Alfred J. Amoroso	58	President and Chief Executive Officer
James Budge	42	Chief Financial Officer
Thomas Carson	49	Executive Vice President, Worldwide Sales & Services
Stephen Yu	43	Executive Vice President, General Counsel and Corporate Secretary


	Base Salary
Name and Title	2007		At 3/1/08		At 6/1/08
Alfred J. Amoroso	$	500,000	$	525,000	$	550,000
President, Chief Executive Officer and Director
James Budge	$	305,000	$	340,000	$	350,000
Chief Financial Officer
Thomas Carson	$	447,352	$	447,352	$	447,352
Executive Vice President, Worldwide Sales and Services
Stephen Yu	$	260,000	$	275,000	$	300,000
Executive Vice President & General Counsel


Name and Principal Position (a)	Year (b)		Salary ($)(c)		Bonus ($)(d)	Stock Awards ($)(1)(e)		Option Awards ($)(2)(f)		Non-Equity Incentive Plan Compen- sation ($)(3)(g)		Change in Pension Value and Nonqualified Deferred Compen- sation Earnings ($)(h)	All Other Compen- sation ($)(4)(i)		Total ($)(j)
Alfred J. Amoroso	2008		$	535,417	—	$	2,746,147	$	1,066,271	$	588,500	—	$	7,506	$	4,943,841
President and Chief Executive Officer	2007		$	500,000	—	$	1,610,373	$	1,342,145	$	548,750	—	$	9,850	$	4,011,118
President and Chief Executive Officer	2006		$	500,000	—	$	203,966	$	1,706,241	$	555,000	—	$	7,466	$	2,972,673

James Budge	2008		$	340,000	—	$	671,379	$	390,161	$	267,881	—	$	45,746	$	1,715,167
Chief Financial Officer	2007		$	302,500	—	$	483,112	$	473,117	$	212,280	—	$	1,744	$	1,472,753
Chief Financial Officer	2006		$	287,500	—	$	61,190	$	544,879	$	175,740	—	$	721	$	1,070,030

Thomas Carson,	2008		$	452,447	—		—	$	142,343	$	263,378	—	$	26,335	$	884,503
Executive Vice President, Worldwide Sales and Services	2007	(5)		N/A	N/A		N/A		N/A		N/A	N/A		N/A		N/A
	2006	(5)		N/A	N/A		N/A		N/A		N/A	N/A		N/A		N/A


Stephen Yu,	2008		$	287,083	—	$	181,294	$	427,016	$	176,625	—	$	32,112	$	1,104,130
Executive Vice President & General Counsel	2007		$	258,333	—	$	85,687	$	283,895	$	138,645	—	$	3,833	$	770,393
	2006	(5)		N/A	N/A		N/A		N/A		N/A	N/A		N/A		N/A


Name (a)	Grant Date (b)	Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)			Estimated Future Payouts Under Equity Incentive Plan Awards			All Other Stock Awards: Numbers of Shares of Stock or Units (#)(i)	All Other Option Awards: Number of Securities Underlying Options (#)(j)	Exercise or Base Price of Option Awards ($/Sh) (k)		Grant Date Fair Value of Stock and Option Awards (2) (l)
Name (a)	Grant Date (b)	Threshold ($)(c)	Target ($)(3)(d)	Maximum ($)(e)	Threshold (#)(f)	Target ($)(g)	Maximum ($)(h)
Alfred J. Amoroso	3/1/08	—	—	—	—	—	—	125,000	—	$	15.29	$	1,911,250
President and Chief Executive Officer	9/1/08	—	—	—	—	—	—	85,000	—	$	15.52	$	1,319,200
	6/1/08	—	—	—	—	—	—	—	575,000	$	13.53	$	2,475,088
	9/1/08	—	—	—	—	—	—	—	80,000	$	15.52	$	502,656
	N/A	—	550,000	—	—	—	—	—	—		N/A		—

James Budge	6/1/08	—	—	—	—	—	—	—	200,000	$	13.53	$	860,900
Chief Financial Officer	N/A	—	227,500	—	—	—	—	—	—		N/A		—

Thomas Carson,	6/1/08	—	—	—	—	—	—	—	170,000	$	13.53	$	731,765
Executive Vice President, Worldwide Sales and Services	N/A	—	223,700	—	—	—	—	—	—		N/A		—

Stephen Yu,	6/1/08	—	—	—	—	—	—	—	170,000	$	13.53	$	731,765
Executive Vice President & General Counsel	N/A	—	150,000	—	—	—	—	—	—		N/A		—


	Option Awards							Stock Awards
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)	Number of Securities Underlying Unexercised Options (#) Unexercisable (c)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($)(e)		Option Expiration Date (f)	Number of Shares of Stock That Have Not Vested (#)(g)		Market Value of Shares of Stock That Have Not Vested ($) (h)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(i)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(j)
Alfred J. Amoroso	500,000	—		—	$	22.95	7/5/10	460,000	(9)	$	5,819,000	—	—
President and Chief Executive Officer	109,375	15,625	(1)	—	$	20.90	3/1/11
	—	575,000	(2)	—	$	13.53	6/1/13
	—	80,000	(3)	—	$	15.52	9/1/15


James Budge	97,229	—		—	$	18.57	9/6/10	75,000	(10)	$	948,750	—	—
Chief Financial Officer	20,316	4,688	(4)	—	$	20.90	3/1/11
Chief Financial Officer	—	200,000	(5)	—	$	13.53	6/1/13

Thomas Carson,	—	170,000	(6)	—	$	13.53	6/1/13	—			—	—	—
Executive Vice President, Worldwide Sales and Services

Stephen Yu,	76,166	20,834	(7)	—	$	22.76	5/1/11	21,750	(11)	$	275,138	—	—
Executive Vice President & General Counsel	5,312	2,188	(8)	—	$	20.56	7/28/11
	—	170,000	(6)	—	$	13.53	6/1/13


Name (a)	Fees earned or paid in cash ($)(b)			Stock Awards ($)(c)	Option Awards ($)(d)		Non-Equity Incentive Plan Compensation ($)(e)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(f)	All Other Compensation ($)(g)		Total ($)(h)
Alan L. Earhart	$	52,500	*	—	$	40,152	—	—	$	5,457	$	98,109
Andrew K. Ludwick	$	67,500		—	$	203,532	—	—	$	6,296	$	277,328
Robert J. Majteles	$	67,000		—	$	220,980	—	—		—	$	287,980
James E. Meyer	$	45,000	*	—	$	40,152	—	—	$	2,448	$	87,600
James P. O’Shaughnessy	$	52,500	*	—	$	40,152	—	—	$	14,257	$	106,909
Ruthann Quindlen	$	52,500	*	—	$	40,152	—	—	$	20,488	$	113,140


Beneficial Owner	Shares	Options	Total	Percent of Class
OZ Management, LP (1)	9,743,841	0	9,743,841	9.65	%
Glenview Capital Management, LLC (2)	5,949,033	0	5,949,033	5.89	%
Barclays Global Investors, NA (3)	5,272,179	0	5,272,179	5.22	%
Alfred J. Amoroso (4)	573,174	625,007	1,198,181	1.19	%
James Budge (5)	94,903	122,233	217,136	*
Stephen Yu (6)	28,283	99,082	127,365	*
Robert J. Majteles	0	86,250	86,250	*
Andrew K. Ludwick	0	61,805	61,805	*
Alan L. Earhart	0	11,250	11,250	*
James E. Meyer	4,824	11,250	16,074	*
James P. O’Shaugnessy	0	11,250	11,250	*
Ruthann Quindlen	3,247	11,250	14,497	*
Thomas Carson	0	0	0	*
All executive officers and directors as a group (10 persons)	704,431	1,039,377	1,743,808	1.73	%


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance
Equity compensation plans approved by security holders	8,133,235	(1)	$	17.05	23,328,337	(2)
Equity compensation plans not approved by security holders	—			—	—
Total	8,133,235		$	17.05	23,328,337


Type of Fees	Fee Amounts Fiscal 2008
Audit Fees (1)	$	2,110,000
Audit-Related Fees (2)		253,000
Tax Fees (3)		25,000
All Other Fees		—

Total Fees	$	2,388,000


		Page
•	Reports of Independent Registered Public Accounting Firms	F-2
•	Consolidated Balance Sheets	F-4
•	Consolidated Statements of Operations	F-5
•	Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss)	F-6
•	Consolidated Statements of Cash Flows	F-7
•	Notes to Consolidated Financial Statements	F-8


Exhibit Number	Exhibit Description	Incorporated by Reference			Filed Herewith
Exhibit Number	Exhibit Description	Form	Date	Number	Filed Herewith

2.01	Agreement and Plan of Merger dated November 5, 2007 by and among Macrovision Corporation, Aspen Acquisition Corp., All Media Guide Holdings, Inc., Digital On-Demand, Inc. (a Delaware corporation), and Digital On-Demand, Inc. (a California corporation) as Representative	8-K	11/9/07	10.1

2.02	Asset Purchase Agreement dated November 17, 2007 by and among Macrovision Corporation, Macrovision International Holding Limited Partnership and Cryptography Research, Inc.	8-K/A	12/18/07	10.1

2.03	Agreement and Plan of Mergers, dated as of December 6, 2007, among Macrovision Corporation, Saturn Holding Corp, Galaxy Merger Sub, Inc., Mars Merger Sub, Inc. and Gemstar-TV Guide International, Inc	8-K	5/5/08	2.1

2.04	Company Voting and Support & Registration Rights Agreement, dated as of December 6, 2007, among News Corporation, Saturn Holding Corp and Macrovision Corporation	425	12/7/07	2.02

2.05	Asset Purchase Agreement dated February 13, 2008 by and among Macrovision Corporation and Flexco Holding Company, Inc. (a Delaware corporation later renamed Acresso Software Inc.).	8-K	2/21/08	10.1


Name	Title	Date
Principal Executive Officer:

/s/ ALFRED J. AMOROSO Alfred J. Amoroso	President, Chief Executive Officer and Director	February 28, 2009

Principal Financial Officer:

/s/ JAMES BUDGE James Budge	Chief Financial Officer	February 28, 2009

Principal Accounting Officer:

/s/ PETER C. HALT Peter C. Halt	Chief Accounting Officer	February 28, 2009

Additional Directors:

/s/ ANDREW K. LUDWICK Andrew K. Ludwick	Chairman of the Board of Directors	February 28, 2009

/s/ ALAN L. EARHART Alan L. Earhart	Director	February 28, 2009

/s/ ROBERT J. MAJTELES Robert J. Majteles	Director	February 28, 2009

/s/ JAMES E. MEYER James E. Meyer	Director	February 28, 2009

/s/ JAMES P. O’SHAUGHNESSY James P. O’Shaughnessy	Director	February 28, 2009

/s/ RUTHANN QUINDLEN Ruthann Quindlen	Director	February 28, 2009


	Common stock					Treasury Stock					Additional paid-in capital			Deferred stock-based compensation			Accumulated other comprehensive income (loss)			Retained earnings			Total Stockholders’ Equity
	Shares		Amount			Shares		Amount			Additional paid-in capital			Deferred stock-based compensation			Accumulated other comprehensive income (loss)			Retained earnings			Total Stockholders’ Equity
Balances as of December 31, 2005	54,368,379		$	54		(3,000,000	)	$	(38,450	)	$	330,912		$	(5,101	)	$	2,631		$	138,104		$	428,150

Comprehensive income:
Net income																					33,043			33,043
Foreign currency translation adjustment, net of tax																		4,909						4,909
Unrealized gains in investments, net of tax																		3,434						3,434

Total comprehensive income																								41,386
Issuance of common stock upon exercise of options	1,890,915			2								33,759												33,761
Issuance of common stock under employee stock purchase plan	353,768			1								5,643												5,644
Issuance of restricted stock	398,075																							—
Equity-based compensation												22,165												22,165
Stock repurchase						(2,315,800	)		(49,998	)														(49,998	)
Amortization of deferred stock-based compensation												(5,101	)		5,101									—
Excess tax benefit associated with stock plans												836												836
Purchase of convertible bond call option												(46,149	)											(46,149	)
Proceeds from issuance of warrants												30,347												30,347

Balances as of December 31, 2006	57,011,137		$	57		(5,315,800	)	$	(88,448	)	$	372,412		$	—		$	10,974		$	171,147			466,142
Comprehensive income:
Net income																					31,500			31,500
Foreign currency translation adjustment, net of tax																		1,151						1,151
Unrealized gains in investments, net of tax																		282						282

Total comprehensive income																								32,933
Issuance of common stock upon exercise of options	3,081,440			3								59,954												59,957
Issuance of common stock under employee stock purchase plan	429,133											7,065												7,065
Issuance of restricted stock	725,733			1								(1	)											—
Equity-based compensation												16,158												16,158
Stock repurchase						(2,118,719	)		(50,000	)														(50,000	)
Cumulative effect from adoption of FIN 48												14,975												14,975
Issuance of warrants												8,388												8,388

Balances as of December 31, 2007	61,247,443		$	61		(7,434,519	)	$	(138,448	)	$	478,951		$	—		$	12,407		$	202,647			555,618
Comprehensive loss:
Net loss																					(108,858	)		(108,858	)
Foreign currency translation adjustment, net of tax																		(11,440	)					(11,440	)
Unrealized losses in investments, net of tax																		(5,846	)					(5,846	)

Total comprehensive loss																								(126,144	)
Issuance of common stock upon exercise of options	223,987											3,138												3,138
Issuance of common stock under employee stock purchase plan	347,866											4,825												4,825
Issuance of restricted stock	220,000																							—
Restricted stock forfeitures	(283,104	)																						—
Equity-based compensation												15,500												15,500
Issuance of common stock in connection with the Gemstar acquisition	48,650,873			49								1,072,427												1,072,476
Cancellation of treasury stock	(7,434,519	)		(7	)	7,434,519			138,448			7									(138,448	)		—
Excess tax benefit associated with stock plans												(1,061	)											(1,061	)
Stock repurchase						(2,262,975	)		(25,068	)														(25,068	)

Balances as of December 31, 2008	102,972,546		$	103		(2,262,975	)	$	(25,068	)	$	1,573,787		$	—		$	(4,879	)	$	(44,659	)	$	1,499,284


	Year ended December 31
	2008			2007			2006
Cash flows from operating activities:
Net (loss) income	$	(108,858	)	$	31,500		$	33,043
Adjustments to reconcile net (loss) income to net cash provided by operations:
Loss (Income) from discontinued operations		209,468			14,537			(2,979	)
Net gain on sale of Software, Games and eMeta		(153,273	)		—			—
Depreciation and amortization		72,971			11,071			8,544
Amortization of note issuance costs		5,707			1,442			533
Equity-based compensation		13,610			9,793			12,928
Impairment losses on strategic investments		—			5,000			—
Asset impairment charges		—			2,044			—
Deferred taxes		38,284			(5,242	)		(5,496	)
Tax benefit from equity based compensation		—			—			836
Excess tax benefits from equity-based compensation		—			—			(836	)
Gain on sale of strategic investment		(5,238	)		—			—
Changes in operating assets and liabilities, net of assets and liabilities acquired:
Accounts receivable, net		(10,216	)		(5,020	)		(8,065	)
Deferred revenue		13,342			290			3,069
Prepaid expenses, other current assets and other assets		16,816			(23,584	)		(15,164	)
Accounts payable, accrued expenses, and other long-term liabilities		(37,188	)		25,260			42,507

Net cash provided by operating activities of continuing operations		55,425			67,091			68,920
Net cash provided by operating activities of discontinued operations		12,649			24,629			21,137

Net cash provided by operating activities		68,074			91,720			90,057

Cash flows from investing activities:
Purchases of long and short term marketable investment securities		(112,741	)		(1,156,590	)		(744,519	)
Sales or maturities of long and short term marketable investments		254,463			1,148,583			567,580
Acquisition of Gemstar, net of cash acquired		(911,164	)		—			—
Proceeds from sale of Software, Games and eMeta		195,860			—			—
Loan made in conjunction with TV Guide Magazine Sale		(7,403	)		—			—
Payments for other acquisitions, net of cash acquired		—			(129,813	)		(75,430	)
Purchases of property and equipment		(10,381	)		(1,136	)		(8,395	)
Other investing activities		(1,023	)		(1,518	)		(6,611	)
Decrease in restricted cash		—			12,000			—

Net cash used in investing activities of continuing operations		(592,389	)		(128,474	)		(267,375	)
Net cash used in investing activities of discontinued operations		(1,576	)		(5,033	)		(5,806	)

Net cash used in investing activities		(593,965	)		(133,507	)		(273,181	)

Cash flows from financing activities:
Purchase of treasury stock		(25,068	)		(50,000	)		(49,998	)
Purchase of convertible bond call option		—			—			(46,149	)
Principal payment under capital lease and debt obligations		(4,299	)		(1,355	)		(884	)
Proceeds from issuance of debt, net of issuance costs		615,353			—			232,846
Proceeds from exercise of options and other financing activities		3,138			59,957			33,761
Proceeds from issuance of warrants		—			—			30,347
Excess tax benefits from equity-based compensation		—			—			836
Proceeds from stock issued under employee stock purchase plan		4,825			7,065			5,644

Net cash provided by financing activities of continuing operations		593,949			15,667			206,403
Net cash used by financing activities of discontinued operations		(442	)		—			—

Net cash provided by financing activities		593,507			15,667			206,403
Effect of exchange rate changes on cash		(2,498	)		524			762

Net increase (decrease) in cash and cash equivalents		65,118			(25,596	)		24,041
Cash and cash equivalents at beginning of year		134,070			159,666			135,625

Cash and cash equivalents at end of year	$	199,188		$	134,070		$	159,666

Cash paid during the year:
Income taxes	$	6,764		$	1,266		$	4,359

Interest	$	34,188		$	6,329		$	157

Supplemental schedule of non-cash transactions:
Issuance of warrants for business acquisition	$	—		$	8,388		$	—


	Balance at Beginning of Period		Additions		Deductions		Other		Balance at End of Period
2008	$	447	$	2,125	$	199	$	506	$	2,879
2007	$	974	$	469	$	996	$	—	$	447
2006	$	2,976	$	128	$	2,130	$	—	$	974


Fair value of Macrovision Solutions Corporation stock issued	$	1,072,476
Cash consideration paid to Gemstar stockholders		1,516,309
Cash consideration paid for employee options and restricted stock units		30,374
Acquisition related transaction costs		32,801

Total purchase price	$	2,651,960


	Weighted Average Estimated Useful Life
Cash and cash equivalents			$	663,618
Trade accounts receivable				74,848
Property and equipment				73,043
Goodwill				926,949
Identifiable intangible assets:
Developed technology and patents	13	774,080
Trademarks/Tradenames	20	141,630
Customer relationships	14	184,050
Content database	15	18,810

Total identifiable intangible assets				1,118,570
Other assets				56,465
Accounts payable and other liabilities				(136,117	)
Restructuring charge (See note 8)				(21,162	)
Deferred tax liabilities, net				(6,895	)
Deferred revenue				(85,461	)
Capital lease obligations				(11,898	)

Total purchase price			$	2,651,960


	Year Ended December 31,
	2008 (1)		2007 (2)
Net revenue	$	432,046	$	398,328
Operating income	$	71,436	$	7,661
Income (loss) from continuing operations	$	51,799	$	(32,455	)
Basic earnings (loss) per share from continuing operations	$	0.51	$	(0.32	)
Diluted earnings (loss) per share from continuing operations	$	0.50	$	(0.32	)


	December 31, 2008
Trade accounts receivable, net	$	17,320
Property and equipment, net		22,914
Other assets		4,893
Goodwill and intangible assets		223,595
Accounts payable and other liabilities		(11,749	)
Capital lease		(11,456	)
Deferred revenue		(8,574	)

Total net assets held for sale	$	236,943


	December 31, 2008
Trade accounts receivable, net	$	5,255
Property and equipment, net		3,927
Other assets		1,499
Goodwill and intangible assets		50,119
Accounts payable and other liabilities		(24,242	)

Total net assets held for sale	$	36,558


	December 31, 2007
Trade accounts receivable, net	$	25,361
Property and equipment, net		1,735
Other assets		1,260
Intangible assets		7,634
Goodwill		39,355
Deferred revenue		(27,959	)

Total net assets held for sale	$	47,386


	December 31, 2007
Property and equipment, net	$	702
Identifiable intangibles		999
Goodwill		2,457

Total net assets held for sale	$	4,158


	Balance at Beginning of Period		Goodwill Acquired		Assets Held for Sale			Foreign Currency Translation			Balance at End of Period
2008	$	199,209	$	927,330	$	(295,305	)	$	(3,049	)	$	828,185
2007	$	136,049	$	104,411	$	(41,812	)	$	561		$	199,209


	December 31, 2008
	Gross Costs		Accumulated Amortization			Net
Developed technology and patents	$	826,968	$	(61,438	)	$	765,530
Existing contracts and customer relationships		43,635		(6,800	)		36,835
Content databases		44,652		(4,690	)		39,962
Trademarks / Tradenames		55,047		(2,303	)		52,744

	$	970,302	$	(75,231	)	$	895,071