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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2004

or

Commission file number 0-24218

GEMSTAR-TV GUIDE INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

6922 Hollywood Boulevard, 12^th Floor, Los Angeles, California 90028

(Address of principal executive offices including zip code)

(323) 817-4600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.01 per share

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of 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. x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨

As of February 18, 2005, there were 424,205,391 shares of the registrant’s common stock outstanding. As of June 30, 2004, the aggregate market value of common stock held by non-affiliates of the registrant was approximately $1.2 billion, based on the closing sale price of $4.80 per share as reported by the Nasdaq Stock Market on such date. Shares of common stock held by officers, directors, and any stockholder whose ownership exceeds 5%, have been excluded from this calculation because such persons may be deemed to be affiliates. The determination of affiliate status is not a conclusive determination for other purposes.

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DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement related to the 2005 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission within 120 days after December 31, 2004, are incorporated by reference into Part III of this Form 10-K.

INDEX

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PART I

Overview

Gemstar-TV Guide International, Inc. (“Gemstar” or the “Company”) is a media, entertainment and technology company that develops, licenses, markets and distributes technologies, products and services targeted at the television guidance and home entertainment needs of television viewers worldwide. In the continually evolving world of television, where consumers may have several hundred channels from which to choose, we offer comprehensive guidance solutions to television viewers. We believe that most TV viewers today have a growing demand for such solutions because they are overwhelmed by an increasing number of programming choices that include cable channels, pay-per-view and video on demand and because they are challenged by growing complexity of their home entertainment centers that may include cable or satellite receivers, digital TVs, digital video recorders (“DVRs”) and digital video discs (“DVD”) recorders. Today, the average American watches more than four hours of television every day and TV has never been more central to our leisure time or more influential in our culture. The TV Guide brand reaches over 70 million U.S. households each week, through TV Guide magazine, TV Guide Channel, TV Guide Interactive, TV Guide Online and TV Guide On Screen. Each platform serves consumers with one overarching objective—to simplify and enhance viewers’ television experience. The TV Guide brand has the highest degree of consumer awareness among sources of program information.

Our business strategy primarily focuses on using our unique assets such as the TV Guide brand, television listings data, data distribution infrastructure, intellectual property, and relationships with cable and satellite operators and consumer electronics (“CE”) manufacturers, as well as unique capabilities such as content development expertise, and the ability to localize data listings to individual markets, cable systems and even subscribers. We believe these assets and capabilities allow us to create TV guidance products and services that have broad consumer appeal. We use these unique strengths to serve consumers through multiple channels: print media; cable, satellite, and interactive TV; the Internet; and CE devices. Additionally, as a leader in interactive program guide (“IPG”) technology, our strategic relationships with companies across key media and technology industries position us well to capitalize on the future growth of digital televisions, home network centers and digital mass storage recording devices and the associated growth of content across these platforms.

Business Segments

The Company organizes its businesses into four groups that also represent its reportable business segments. The segments are organized along three industry lines, in addition to a segment comprising certain corporate functions and related expenses. Our four business segments are: Publishing; Cable and Satellite; Consumer Electronic Licensing; and Corporate. See Note 16 – Segment and Geographical Information of the Notes to the Consolidated Financial Statements for financial information regarding segment reporting.

Publishing Segment

Our Publishing Segment consists of the Company’s publishing units and Web sites including TV Guide magazine, TV Guide Online and the SkyMall catalog business. The Publishing Segment also includes TV Guide Data Solutions, a data collection and distribution business that gathers and distributes program listings and channel lineups.

TV Guide magazine has been published continuously since 1953 and appears in more than 90,000 retail outlets with more than 270,000 display pockets. TV Guide magazine is the most widely circulated paid weekly magazine in the United States, with Audit Bureau of Circulation reported circulation of approximately 9 million copies a week, and pass along readership of more than 25 million. TV Guide magazine offers television viewers television program guidance, listings and descriptions. The magazine also provides feature entertainment information about shows, stars, technology and developments in the world of on-screen entertainment. The magazine develops approximately 100,000 new program descriptions and reviews, as well as more than 3,600 “Close-up” and over 300 features per year. We publish 154 separate digest and ultimate size editions of this magazine weekly, including geographic and cable specific editions. TV Guide magazine attracts new subscribers to its cable-specific editions through the continued customization of the magazine for regional cable systems and through customer marketing programs in conjunction with some of the country’s largest multiple system operators (“MSOs”).

TV Guide magazine’s rate base, the volume of circulation guaranteed to advertisers, was 9 million as of December 31, 2004, which was unchanged from December 31, 2003 and December 31, 2002. TV Guide magazine complies with the Audit

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Bureau of Circulations’ audit requirements. TV Guide magazine’s circulation comprises a number of sources, including newsstand sales, individually paid subscriptions and sponsored sales.

TV Guide magazine revenues have accounted for approximately 44%, 52% and 56% of our consolidated revenues in the years ended December 31, 2004, 2003 and 2002, respectively. TV Guide magazine’s circulation revenues are derived from four primary sources: new subscriptions (sold through insert cards in TV Guide magazine, our Web site tvguide.com, direct mail and direct mail agents), subscription renewals, single-copy newsstand sales, and subscriptions for cable and satellite-specific editions sold through MSOs and digital broadcast satellite (“DBS”) providers. TV Guide magazine circulation revenues and circulation per copy have declined significantly over the past several years, while many of the costs of producing and distributing the magazine are fixed and therefore have not declined correspondingly. Contributing to this decline is increased competition to our high contribution newsstand sales from larger, glossy, entertainment publications and competition from the guidance provided by free television listings included in local newspapers, IPGs incorporated into digital cable and satellite services, and other sources. Furthermore, in order to offset declining newsstand sales, reduce our reliance on sponsored sales and arrears copies, and rebuild the subscriber base of TV Guide magazine, we have provided subscribers with various forms of promotional offerings (such as low, or no, contribution per copy subscriptions). Declines in TV Guide magazine’s circulation contribution per copy and operating results may continue and could be significant. Unless the decline in newsstand sales is reversed and unless newly-acquired subscribers renew at prices greater than the initial offers, our results will continue to be adversely affected.

In 2004, TV Guide magazine carried approximately 2,300 total advertising pages. This past year, TV Guide magazine saw a substantial decline in program advertising revenue, which historically represented the majority of TV Guide magazine’s advertising revenue. As broadcast network television viewership has declined, we have seen a more limited and focused approach to broadcast network television marketing spend. The decline in program advertising revenue could be permanent. At the same time we have seen an increase in conventional advertisers such as food, drug, automobile, entertainment and packaged goods companies. New conventional advertisers this year included Milano Cookies, Red Roof Inns and La Quinta. We also saw a significant increase in advertising from Dell Computers in 2004. Conventional advertising is now the largest portion of TV Guide magazine’s advertising revenue. TV Guide magazine sells advertising principally through an internal advertising sales force. Advertisers may purchase pages in TV Guide on either a national or regional basis according to their needs.

The printing of TV Guide magazine and the other publications published by the TV Guide magazine group is outsourced to seven independent commercial printers located throughout the United States. We believe there is an adequate supply of alternative printing services available to publish TV Guide magazine at competitive prices should the need arise. The principal raw materials used in the publication of TV Guide magazine are coated and uncoated paper. Paper prices are affected by a variety of factors, including demand, capacity, pulp supply and general economic conditions. Paper prices have begun to increase in 2005. We do not hedge against increases in paper costs. Significant increases in the price of coated and uncoated paper could have a material adverse effect on TV Guide magazine’s operating performance. Postage for product distribution and direct mail solicitations is also a significant expense to TV Guide magazine and a material increase in postage prices would adversely affect the magazine’s operating performance. TV Guide magazine uses an outside company for newsstand distribution.

In the late spring of 2005, we plan to launch a new weekly publication, Inside TV. This new magazine will target young female TV fans and will reflect the way contemporary women are involved with television as well as report on the latest in entertainment news, style and trends. The magazine will be full size, four color throughout, and is expected to be sold primarily on newsstands rather than through subscription sales. We expect to incur a material amount of costs in connection with the launch and ongoing operations of Inside TV. Those start up costs include additional staffing, marketing expenses, and costs connected with acquiring distribution space in supermarkets, large retailers and other newsstand outlets. We believe that Inside TV offers an opportunity to compete more effectively against other offerings at newsstand than our current TV Guide magazine does.

TV Guide Online (www.tvguide.com) is an entertainment Web site with more than 6.5 million registered users. TV Guide Online offers listings, features, search and voting capability on television related subjects and also conducts electronic commerce. TV Guide Online generates the majority of its revenues from advertising. TV Guide Online advertising revenue has grown steadily over the past three years from $2.0 million in 2002, to $4.2 million in 2003 and $6.3 million in 2004. During 2003, TV Guide Online underwent a significant redesign, becoming more integrated with the Company’s other branded products and services, principally TV Guide magazine. Since its redesign tvguide.com has become a meaningful source of new subscription orders for TV Guide magazine.

SkyMall offers airline passengers a large selection of high-quality products and services from a wide variety of merchants and partners through the SkyMall in-flight catalog and www.skymall.com. SkyMall receives commissions on the sale of merchandise sold in its in-flight catalog or on its Web site and placement fees from participating merchants to include their products in SkyMall’s catalog. SkyMall has a sophisticated vendor relationship management system, which can be customized to interface with a merchant’s sales and distribution system in a turn-key manner. With this business model, SkyMall holds minimal

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product inventory, providing maximum flexibility in merchandising the catalog and Web site. SkyMall has agreements with most of the major domestic airlines, representing 93% of the total passengers boarded in the United States each year, granting it access to a captive audience with upscale demographics for its quarterly catalogs.

SkyMall also operates programs for Marriott and various similar entities (each a “Loyalty Partner”) pursuant to which consumers are allowed to obtain merchandise with loyalty points earned from Marriott Rewards, and similar loyalty programs. Under these programs, SkyMall contracts directly with the Loyalty Partner to provide merchandising, fulfillment, customer and other related services. The Loyalty Partner pays SkyMall a pre-negotiated price for all products purchased by loyalty customers.

Due to the holiday season, placement fees and commissions received by our SkyMall business tend to be highest during the fourth quarter of each year.

Cable and Satellite

Our Cable and Satellite Segment offers technologies and services to consumers and service providers in the cable and satellite industry. The Cable and Satellite Segment includes the operations of TV Guide Channel, TV Guide Interactive, TVG Network and several other smaller related businesses.

TV Guide Channel is an entertainment network that offers television viewers information on programs, celebrities and trends in television, as well as program listings and descriptions. We offer MSO and DBS providers a fully customized and localized television network, continuously delivering updated entertainment information that promotes the provider’s networks and programs. TV Guide Channel’s hosted format is designed to appeal to cable operators, DBS service providers, advertisers and consumers.

TV Guide Channel is typically included in a basic or expanded basic viewing package offered by programming distributors to their subscribers, and is generally available in both analog and digital channel lineups. Subscribers do not need additional equipment to receive the Channel. Generally, the screen for TV Guide Channel is divided into two components that offer cable and satellite providers a powerful combination in the form of objective and subjective guidance. The objective guidance is illustrated in the lower portion of the screen by the 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, video on demand (“VOD”) services, for over 2,500 unique channel lineups in the United States, Puerto Rico, and the US Virgin Islands. In the upper portion of the screen, TV Guide Channel’s subjective video guidance, via original programming, is designed to offer information about the best of what’s on and make recommendations for what’s worth watching. This portion of the screen is devoted to shows promoting upcoming programs and events, entertainment information and advertising. As of December 31, 2004, TV Guide Channel was distributed to 76.7 million households as measured by Nielsen.

TV Guide Channel’s average prime time total household viewership, as defined by Nielsen Media Research (“Nielsen”), was 0.23 million in the fourth quarter of 2004 and 2003. Although total household viewership remained constant, our average prime time total household rating, as defined by Nielsen declined to 0.30 in the fourth quarter of 2004 as compared to 0.41 in the fourth quarter of 2003. The decline in our rating is principally due to the increase in our subscriber base being primarily satellite subscribers, who have not used or do not receive TV Guide Channel’s program listing information. As total household rating is based on the universe of subscribers, we believe our rating will increase in the future if we provide our growing percentage of satellite and digital cable subscribers with a compelling programming choice, in addition to a place to go for program listing information.

TV Guide Channel revenues have accounted for approximately 16%, 15% and 13% of our consolidated revenues in the years ended December 31, 2004, 2003 and 2002, respectively. Revenues at TV Guide Channel consist primarily of affiliate fees and advertising revenue. As the majority of our affiliates are contracted under long-term agreements with only cost-of-living increases available under certain contracts, our future growth is highly dependent on advertising revenue. As such, TV Guide Channel is increasing its level of investment in new programming and marketing initiatives with an expectation that the additional investments will, in the future, result in increased viewership and advertising revenue. This will materially increase programming and marketing costs at TV Guide Channel in 2005.

TV Guide Channel advertising revenue generally tends to be highest during the fourth quarter of each year, which includes the majority of the holiday selling season.

TV Guide Interactive licenses technologies and services related to television IPGs, to cable and satellite service providers primarily in the United States and provide them with operational support, content and data. Cable and satellite service providers

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can enter into service agreements with us to deploy our TV Guide Interactive IPG (“TVGI IPG”) or agreements to license our technologies to deploy our TVGI IPG, their own IPG or a third party IPG. An IPG is an on-screen listing of television program information with interactive functions that enable viewers to navigate through, sort, select and schedule television programming for viewing and recording. We believe that interactive television guidance technology is quickly becoming a must-have tool for television viewers bombarded with an increasing number of programming choices, an increasing number of digital cable and satellite television channels, and VOD services. We also believe that IPGs will become an entry point for consumers to avail themselves of a range of new services and content that will be available on television screens. Our TVGI IPG allows service providers to customize certain elements of IPGs for their subscribers and also allows these providers to upgrade over time the features and services they can offer to their subscribers. Our IPG is compatible with service providers’ subscription management, pay-per-view and VOD services. Our IPG also allows service providers to provide their viewers with current and future program information.

Our national data network provides customized and localized listings data to our TVGI IPGs and our data licensees in all 210 U.S. Designated Media Markets, as defined by Nielsen. The listing data is continuously delivered to local affiliate cable systems for delivery to set-top boxes in subscribers’ homes. We have license and distribution agreements with the majority of the MSOs and DBS providers including Adelphia Communications, Charter Communications, Comcast Corporation (“Comcast”), Time Warner Cable, DirecTV and EchoStar Communications Corporation. As a result, as of December 31, 2004, over 32.7 million subscribers receive either our TVGI IPG or another party’s IPG provided under a patent license for which we are paid.

In August of 2004, we launched a new TVGI IPG, the i-Guide, in the United States and Canada. This new IPG delivers enhanced features in high resolution to digital cable homes in systems throughout the U.S. and Canada. This new service offers continued support of high definition (“HD”) programming, VOD, DVR, and advanced interactive television technologies.

We also offer advertising on our TVGI IPG. Marketers can advertise through a variety of display formats incorporated into the guide screens. Advertising opportunities are “hot”, displaying additional text information and/or ad copy when clicked on via the remote control. Broadcaster ads can hot link directly to a TV channel. Advertisers can target specific audiences by airing ads at certain times of the day, or target by viewers’ programming preferences (e.g., movies, sports or children). Our ability to provide IPG advertising is generally at the discretion of the MSO and DBS providers if they deploy their own IPG or a third party IPG. The majority of subscribers for which we are paid a license fee are receiving a TV Guide branded third party IPG. Our agreements with MSO and DBS providers generally require us to share a portion of the advertising revenue we receive from IPG advertising on their systems. The MSO providing us with the majority of our advertising carriage, has notified us that they will no longer carry IPG advertising when they migrate to a TV Guide branded third party IPG in the first quarter of 2005.

We plan on launching an on-demand, cross-platform television network featuring originally produced and repurposed short-form video entertainment programs that provide editorial guidance to the most compelling fare on television each week. Expected to launch in 2005 to over 10 million cable households, the network will feature a 24-hour on-demand experience with a monthly and weekly schedule, featuring various short-form original programs—all rooted in providing television guidance in an entertaining and engaging environment. It will also be available to broadband users on tvguide.com (www.tvguide.com).

On March 31, 2004, the Company and Comcast formed a joint venture, Guideworks LLC (“Guideworks”), to develop IPGs and related middleware for the cable industry using the existing TVGI IPG software as the basis for development. We transferred our TVGI IPG research and development employees to the venture, as well as certain intellectual property rights and development tools. 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 multichannel video programming distributors. Guideworks also provides development support for our existing and future affiliate partners. We have agreed to fund an annual commitment, subject to annual maximums.

TVG Network, is a cable and satellite sports entertainment television network that combines live horse racing from many of the premier horse racetracks in the United States with the convenience of interactive wagering from home. 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 Network, which is 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 Network subscribers.

TVG Network is an exclusive marketing partner of the National Thoroughbred Racing Association and has exclusive agreements for television and interactive wagering with the following horse racetracks: Aqueduct, Arlington Park, Belmont Park, Calder, Churchill Downs, Del Mar, Ellis Park, Emerald Downs, Fair Grounds, Fairplex Park, Hollywood Park, Hoosier Park, Keeneland, Kentucky Downs, Los Alamitos, Oak Tree at Santa Anita, Prairie Meadows, Ruidoso Downs, Saratoga Raceway,

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Saratoga Race Course, Turf Paradise and Turfway Park. TVG Network currently maintains wagering accounts for residents of the following states: California, Idaho, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, North Dakota, Ohio, Oregon, Washington and Wyoming. TVG Network customers may wager on horse races through the Internet, by phone, and where available, set-top remote control.

Youbet.com, Inc. and America TAB, Ltd. license certain intellectual property and sublicense certain audiovisual and pari-mutuel account wagering rights from TVG Network. Youbet.com and America TAB maintain wagering accounts for residents of certain states in which TVG Network does not, as well as in states that TVG Network currently does, offer wagering accounts. As a result, TVG Network is paid a royalty based upon account wagering processed by Youbet.com and America TAB from certain horse racetracks.

TVG Network also earns revenue from traditional advertising sales and direct response advertising sales from its growing television distribution. As of December 31, 2004, TVG Network was available in 14.3 million U.S. households. With the continued development of TVG Network distribution in major racing markets and the expansion of markets from which accounts are accepted, we believe that increased fee revenue, network advertising, merchandising and interactive advertising opportunities may become available.

TVG Network is a growing business in which we have made substantial investment. Future growth in the business will depend on the legislative and regulatory environment on both Federal and state levels, the continued expansion of its distribution and the integration of interactive wagering technologies for online and interactive television applications.

TVG Network experiences fluctuations in gaming and licensing revenue due to the seasonal nature of horse racing. TVG Network’s wagering and licensing revenue tend to be highest during the second and third quarter.

Consumer Electronic Licensing

Our CE Licensing Segment licenses the Company’s proprietary technologies and intellectual property to CE manufacturers and recognizes advertising revenues related to IPGs incorporated in CE devices. The CE Licensing Segment licenses video recording technology currently marketed under the VCR Plus+ brand in North America and under other brands in Europe and Asia, and IPGs marketed under the TV Guide On Screen brand in North America, under the G-GUIDE brand in Asia and under the GUIDE Plus+ brand in Europe. This Segment also has licensed certain IPG patents to manufacturers of set-top boxes for the DBS industry, and continues to license certain IPG patents to interactive television providers and program listing providers in the online, personal computer and other non-television businesses. In addition, the CE Licensing Segment incurs costs associated with patent prosecution and litigation related to the enforcement and defense of patent claims.

We license our technology to major CE manufacturers around the world. Our licensees include Hitachi, JVC, LG, Matsushita (Panasonic), Mitsubishi, Philips, Pioneer, Samsung, Sharp, Sony, Thomson, TiVo, Toshiba and others. Generally, our agreements with CE manufacturers enable them to incorporate our technology into specified products in certain territories provided we receive license fees based on the number of units produced and shipped that incorporate our technology. We have also entered into long-term IPG patent license agreements with certain CE manufacturers. Our CE Segment does not receive a license fee on set-top boxes that are manufactured by our CE partners for a MSO or DBS provider who has also licensed our IPG technology through our Cable and Satellite Segment.

Our VCR Plus+ technology has been adopted as the industry standard for VCR recording of television programming by virtually every major consumer electronics manufacturer worldwide. We have developed and introduced additional features to enhance the functionality of the VCR Plus+ setup procedures, including controlling set-top boxes and updating the clock and cable channel lineup information. VCR Plus+ is offered internationally in more than 35 countries. It is incorporated into VCRs and digital devices such as low priced DVRs, DVD recorders and DVD-HDD combination digital / analog products and enables consumers to record a television program by simply entering a proprietary one to eight-digit PlusCode number into the device via a remote control unit.

PlusCode numbers are generated through a patented process developed by us and are printed next to television listings by over 1,700 newspapers and program guides worldwide, with a combined circulation of over 300 million, including the New York Times, the Los Angeles Times, TV Guide, the Asahi Shimbun (Japan), the Sun (U.K.), the Daily Mirror (U.K.) and the Oriental Daily News (Hong Kong). In North America, we pay an agency to manage, collect and remit payments from owners of newspapers and magazines that publish our PlusCode numbers. We also license our PlusCode numbers to a data company that bundles the codes with other data sold to owners of newspapers and magazines. In Europe, Australia, New Zealand and Asia (other than Japan), we directly handle our PlusCode publication contracts and manage and collect the fees under those contracts. In Japan, the sale of PlusCode numbers is handled by an unrelated third party company called Gemstar Japan.

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TV Guide On Screen (Guide Plus+ in Europe and G-Guide in Japan) is an IPG incorporated in CE products, including mid to high-end digital, plasma and LCD televisions, DVRs and recordable DVD players. The guide offers interactive on-screen program listings that enable viewers to quickly and easily navigate, sort, select, and schedule television programming for viewing and recording, all with simple remote control commands. TV Guide On Screen’s patented technology delivers continuously updated multi-day program listings to users, regardless of whether they receive their television signal via cable or over-the-air broadcast. TV Guide On Screen works by simply plugging in the television or recording device and activating the guide through a pre-programmed set-up process. The guide requires no subscription or special data input connection.

The roll out of our IPG incorporated in CE products has been slower than we anticipated for, among other reasons, the long lead times manufacturers need to incorporate our IPG into their products. Albeit further off in the future than previously anticipated, we still expect success for our IPG with manufacturers of mid-range to high-end digital televisions, DVRs and DVD recorders as consumers demand more advanced guidance and recording technologies in such devices. This business is dependent upon the anticipated consumer demand for such devices materializing.

As a result of an agreement with DirecTV that became effective January 1, 2004, the Company no longer collects one-time fees from manufacturers of DirecTV set-top boxes, but instead is paid by DirecTV on a recurring revenue model based initially on new subscribers. Revenues earned from DirectTV are recognized by the Cable and Satellite Segment.

In order to encourage the incorporation of our IPG in CE products, we are offering certain large CE manufacturers the opportunity to bundle both our IPG and VCR Plus+ technology at a significant discount beginning with sales reported in fiscal 2005. We anticipate this could lead to a decrease in combined IPG and VCR Plus+ revenues in fiscal 2005, however, we believe this will ultimately accelerate the incorporation of our IPG to our benefit.

We use the VBI, or vertical blanking interval, in the analog television signals and/or its digital equivalent in the digital signals of the local affiliates of major broadcast networks such as PBS (through National Datacast), ABC, CBS, NBC, Fox and national cable networks to supply program listing information to our IPGs incorporated in CE products in the U.S. Norpak Corporation, a majority-owned Canadian subsidiary of the Company and developer of television-based data transmission systems and interactive on-line information systems, manufactures and supplies us with the VBI insertion equipment. We use a variety of terrestrial, satellite and broadband Internet transmission means to deliver listings data to our IPGs incorporated in CE products internationally.

License revenue from our VCR Plus+ and TV Guide On Screen services experience fluctuations due to the seasonality of CE shipments. Shipments of CE products tend to be higher in the second and fourth calendar quarters. We recognize revenues associated with our technology incorporated in these CE products when the shipments are reported to us, generally in the third and first calendar quarters. In addition, manufacturer shipments vary from quarter to quarter depending on a number of factors, including retail inventory levels and retail promotional activities. As a result, we may experience variability in our licensing revenues on a quarterly or annual basis.

Corporate

Our Corporate Segment comprises various centralized functions, including corporate management, corporate legal, corporate finance and other functions, and related costs such as litigation (excluding amounts relating to cases involving the enforcement or defense of patent claims which are included in the CE Segment) and insurance costs.

Intellectual Property Rights and Proprietary Information

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 via a variety of means, including but not limited to applying for patent protection internationally and domestically. We believe we have one of the world’s most extensive portfolios of intellectual property in the area of IPGs, which broadly covers fundamental advances related to IPG information delivery, storage, retrieval, advertising, two-way interaction, electronic commerce, and related user interfaces, including those relevant to online and interactive television services. We are engaged in significant litigation regarding our intellectual property. See “Legal Proceedings.”

Our technology and intellectual properties have been licensed to significant CE manufacturers, MSOs and DBS providers. We currently market IPGs under brands that include TV Guide On Screen, GUIDE Plus+, G-GUIDE and TV Guide Interactive. We currently have over 280 issued U.S. patents in the general area of audio-visual technologies with more than 8,000 claims, and over 700 issued foreign patents. Each of our issued patents will expire at a different time based on the particular filing date or

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issue date of that respective patent, with expiration dates as late as 2023. We continue to actively pursue a worldwide intellectual property program and currently have approximately 300 United States and 700 foreign patent applications pending.

We hold extensive trademark and service mark registrations throughout the world and have multiple trademark and service mark applications pending for a variety of marks. Marks for which we have registrations or applications to register in the United States or foreign countries include TV Guide, TV Guide Interactive, TV Guide On Screen, TV Guide Channel, GUIDE Plus+ (G-GUIDE in Asia), VCR Plus+ (VIDEO Plus+, ShowView and G-CODE in Europe and Asia), PlusCode, Gemstar, TV Guide Online, TVG and SkyMall.

We hold various domain names relating to our trademarks and service marks including gemstar.com, tvguide.com, gemstartvguide.com, tvgnetwork.com, tvg.com and skymall.com.

Competition

Our technologies, products and services compete with those of other companies. Many of our present and potential competitors have, or may have, substantially greater resources than ours to devote to further technological and new product developments. We believe that we will compete effectively based primarily on the originality of our concepts, the speed with which we can introduce such concepts to the market, the uniqueness of our designs, the focus of our business approach, the strength of our intellectual property portfolio, the extensiveness of our business relationships, the quality and innovation of our technologies and our ability to identify and meet consumer needs.

Interactive Program Guides

Competition in the market for the delivery of television program schedule information is intense. There are a number of companies that produce and market television schedule information in various formats and that compete or will compete with our IPG products and services. These alternative formats currently include traditional printed television guides (including our own TV Guide magazine and other printed cable guides), as well as passive and interactive on-screen electronic guide services, printed television guides in newspapers and weekly publications, and local cable television guides, many of which are similar to other products or services of the Company.

Our CE IPG and TVGI IPG also, in a sense, compete with each other. To the extent we enter into an IPG technology license with a MSO or DBS provider, our contracts generally prohibit us from also being paid by a CE manufacturer for any set-top boxes integrating an IPG or allowing for the integration of an IPG, for which a MSO or DBS provider pays us.

Improvements in software porting and in software substitutability, together with government mandated introduction of an OpenCable Applications Platform, will increasingly permit the creation of new guides and their quick placement in set-top boxes—both those purchased from service providers and those purchased at retail. We intend to modify and improve our technology to be competitive on these new platforms.

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 you that any enhancements developed by us would not be found to infringe patents that are currently held or may be issued to others. Patents of third parties may have an important bearing on our ability to offer certain products and services. 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. In addition, we may be required to defend ourselves or certain of our licensees against claims of infringement by third parties. We cannot assess the extent to which we may be required in the future to defend our products and services or those of our licensees or to obtain licenses with respect to patents held by others, whether such licenses would be available or, if available, whether we would be able to obtain such licenses on commercially reasonable terms. If we were unable to obtain such licenses, we may not be able to redesign our products or services to avoid infringement.

Although we believe that our IPGs are in a strong competitive position with respect to our known competitors, there may be competitors with additional strengths that are unknown to us. Such potential competitors, which may include hardware

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manufacturers, software developers, broadcasters or service providers, could be larger, more established companies with greater resources in the program information delivery market.

VCR Plus+ System

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. Worldwide shipments of VCRs are expected to continue to decrease, due to the introduction of digital recording devices. The VCR Plus+ system is beginning to be incorporated into some of these digital recording devices, notably low-priced DVD recorders and DVRs. However, to the extent that IPGs with recording capability are widely adopted, such guides may reduce the need for VCR Plus+. All IPGs, including those that do not have a point-and-click recording feature, may compete with the printed television guides, and may adversely affect our PlusCode number coverage and publication license income.

TV Guide magazine / Inside TV magazine

TV Guide magazine competes with other entertainment magazines at the newsstand and for marketers’ advertising spend. As a source of guidance, TV Guide magazine competes with television listings included in local and national newspapers, as well as free supplements in Sunday newspapers; niche cable-guide publications; general entertainment and other magazines and television programming focused on television stars and programs; other electronic, interactive and online programming guides; and our own interactive and Internet program listings guide services.

With its current mix of television listings and editorial content, we no longer believe TV Guide magazine, in its current format, can recapture its former sales levels at the newsstand. We also believe our digest size puts us at a disadvantage to competing standard 8” x 10.5” magazines such as People and US. We also have a higher cost structure than these magazines. We currently publish 154 different editions nationwide to address each local market compared to certain competitors’ one national edition. This higher cost structure also puts us at a significant competitive disadvantage. We are currently reviewing our newsstand strategy for TV Guide magazine.

Inside TV Magazine will compete with TV Guide magazine and with entertainment magazines that target young women at the newsstand and for marketers’ advertising spend. Several other established magazines and other media outlets also target this market segment.

TV Guide Channel

As a source of guidance, TV Guide Channel has the following primary sources of competition: television listings included in local and national newspapers, as well as free supplements in Sunday newspapers; niche cable-guide publications; general entertainment and other magazines and television programming focused on television stars and programs; other electronic, interactive and online programming guides; and our own interactive and Internet program listings guide services. In addition, the TV Guide Channel also faces competition from cable television operators who may wish to launch their own programming guide channels.

We have recently begun investing in original programming, including programming revolving around various entertainment awards shows. We believe, by focusing on programming celebrating television we can draw an audience beyond those that currently tune in solely for television programming guidance. For this investment in programming and marketing to pay off, we will need to achieve higher ratings and thus greater advertising revenue. This means we will compete with general entertainment channels for television viewership and marketers’ advertising spend.

In addition, TV Guide Channel competes with other programming for limited analog cable television system channel slots. The competition for channel slots has increased, and we believe will continue to increase, as programming distributors recapture analog channels to launch digital services. To date, the impact of channel recapture has not been significant to TV Guide Channel.

TVG Network

TVG Network has competitors in television and pari-mutuel account wagering. In the television area, the only known competitor to TVG Network on a national basis is HRTV, a subsidiary of Magna Entertainment Corporation (“MEC”). HRTV offers wagering in significantly more states than TVG Network. MEC also owns and operates racetracks in the United States and abroad. In the area of pari-mutuel account wagering, TVG Network’s primary competitors are Xpressbet, also a subsidiary of

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MEC, Youbet.com, Inc., America TAB, Ltd., Greenwood Racing, Inc. (also known as OneClickBetting) and various offshore entities. TVG Network is party to agreements with Youbet.com, Inc. and America TAB, Ltd. pursuant to which it receives royalties in exchange for licenses to certain of its intellectual property and sublicenses to certain of its audiovisual and pari-mutuel account wagering rights for content from various horse racetracks. While we believe that TVG Network is in a strong competitive position with its television distribution agreements, intellectual property portfolio and racetrack content agreements, there may be competitors with additional strengths that are unknown to us.

SkyMall

Our SkyMall subsidiary faces competition from a variety of sources. Competitors, typically other catalog retailers, have attempted to secure contracts with various airlines to offer merchandise to their customers. SkyMall also faces competition for customers from airport-based retailers, duty-free retailers, specialty stores, department stores and specialty and general merchandise catalogs, many of which have greater financial and marketing resources. SkyMall also competes with the merchandisers who advertise in SkyMall’s catalog as many of these merchandisers also have their own catalogs and Web sites. In addition, SkyMall competes for customers with other in-flight marketing media, such as airline-sponsored in-flight magazines and airline video programming.

Research and Development

The market for our products and services is subject to rapid and significant changes in technology and frequent new service and product introductions. We believe that one of the keys to our future success will be our ability to enhance our existing technologies and to introduce products and services using such new technologies on a competitive basis. Accordingly, we will continue to engage in significant research and development activities. Our expenses for research and development in 2004, 2003 and 2002 were $25.7 million, $27.0 million and $27.4 million, respectively. Our expenses in 2004 include our 49% share of Guideworks’ research and development expenses (See Note 1 to the Consolidated Financial Statements). As we are not the managing member of Guideworks, we have limited ability to direct Guideworks research and development efforts and cannot assure that any technology developed will meet our commercial needs. We cannot assure, that we will successfully complete the development of any future technology. There is also no assurance that this technology, even if fully developed, could be incorporated in our products and services or in products of third parties. Any significant delay or failure to develop new or enhanced technology could have a material adverse effect on us.

Regulation

The satellite transmission, cable and telecommunications industries are subject to pervasive federal regulation, including Federal Communications Commission (“FCC”) licensing and other requirements. The industries are also often subject to extensive regulation by local and state authorities. Although most cable and telecommunication industry regulations do not apply directly to us, they affect programming distributors, a primary customer for our products and services. We monitor pending legislation and administrative proceedings to ascertain relevance, analyze impact and develop strategic direction surrounding regulatory trends and developments within the industry.

VBI and Digital Data Carriage Matters

We use the VBI, or vertical blanking interval, in the analog television signals and/or its digital equivalent in the digital signals of the local affiliates of major broadcast networks such as PBS (through National Datacast), ABC, CBS, NBC, Fox and national cable networks 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. On December 6, 2001, Time Warner Cable, a division of AOL/Time Warner, obtained a ruling from the FCC 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. On January 7, 2002, we filed a Petition for Reconsideration of this ruling. Subsequent negotiations between us and Time Warner Cable led to an agreement which provided for carriage by Time Warner of our program listing information in either the VBI or within the digital signal of broadcast television stations. As a result of the agreement with Time Warner Cable, on December 5, 2003, we filed a Petition to Dismiss the Petition for Reconsideration, which was granted on January 15, 2004.

In the digital television context, the local affiliates of major broadcast networks and national cable networks plan to carry our CE IPG updating information in their digital broadcast signals. In January 2001, the FCC suggested that electronic program guide enabling data in the digital context would not be considered “program-related” and therefore cable systems would not be required to pass through to subscribers such data when transmitted as part of the digital signals of broadcast stations carried on

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those systems. The FCC is currently evaluating how ultimately to define “program-related” in the digital context. At this time, it is too early to assess what economic impact, if any, a final decision by the FCC that electronic program guide data in digital signals is not “program-related,” would have on our CE IPG services.

Compatibility Between Cable Systems and Consumer Electronic Equipment

On September 10, 2003, the FCC adopted regulations implementing an agreement between cable MSOs and CE manufacturers to facilitate the retail availability of unidirectional “plug and play” digital televisions and other digital devices that connect directly to cable systems and receive one-way digital services without the need for a set-top box. The parties have begun negotiations on a bi-directional “plug-and-play” agreement, which would allow interactive services to be provided on digital televisions and other digital devices without the need for a set-top box. In April 2003, the FCC extended to July 1, 2006 a deadline under which multichannel video program distributors (except DBS providers) must phase out consumer electronic navigation devices (e.g., set-top boxes) with combined security and non-security functions. The FCC has indicated that it may eliminate this separation requirement altogether if the cable and CE industries successfully negotiate a bi-directional “plug-and-play” agreement. Such an agreement could affect demand for IPGs incorporated into set-top boxes or CE devices, such as TV Guide Interactive and our CE IPGs.

Pari-Mutuel Wagering

TVG Network derives a substantial portion of its revenue from pari-mutuel wagering, which is subject to extensive statutory and regulatory oversight. As such, the gaming activities of TVG Network are extensively regulated. TVG Network’s pari-mutuel account wagering operations are located in Oregon and operated pursuant to a license granted by the Oregon Racing Commission. Operations must be in compliance with Oregon law and regulations. Oregon law also states that licensees must comply with the applicable provisions of the Federal Interstate Horseracing Act (15 U.S.C. Sections 3001 – 3007 et. seq.). Adverse changes in the political climate, new legislation or regulatory activity could harm our business. From time to time, members of Congress and state legislatures have introduced bills that would prohibit or severely restrict off-track interstate pari-mutuel wagering. In addition, a leading payment system has, on behalf of its member financial institutions, recently taken an interest in limiting the use of credit cards for non face-to-face gaming transactions as a means of combating illegal Internet-based gambling operations. Although such efforts to restrict payment mechanisms may not be targeted at the lawful activity of licensed operations such as TVG Network, the resulting inconvenience to our customers caused by such measures could harm our business or growth prospects.

Geographical Information

Information regarding our operations by geographical area is contained in Note 16, “Segment and Geographical Information,” to Consolidated Financial Statements.

Employees

As of December 31, 2004, we employed 2,011 individuals, of whom 154 were employed outside the United States.

Executive Officers of the Registrant

The current executive officers of the Company are as follows (the ages shown are as of February 25, 2005):

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Web site Access to SEC Reports

Our Internet Web site can be found at www.gemstartvguide.com. Information contained on our Internet Web site is not part of this report. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on our Web site, free of charge, as soon as reasonably practicable after such reports are filed with or furnished to the SEC.

Alternatively, you may access these reports at the SEC’s Internet Web site: www.sec.gov.

The following table sets forth the location, approximate square footage, use, and related business segment of each of the principal properties used by the Company. We lease all of these properties with the exception of the Phoenix, Arizona site where we own the building and lease the land. All properties are leased under operating leases. Such leases expire at various times through 2015. The Phoenix, Arizona land lease period may be extended to 2065 at our option.

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