In my opinion the way to look at the IV deal is as follows...
IV revs from dmrc licensing tech - costs incurred (including lic revs paid to dmrc, lic costs to other cos, and % of revs available to dmrc bc IV has formed different baskets of patents so its not just dmrc patents being licensed there are other companies tech involved as well)
If x is the upfront license fee in each year and y is the trailing license fee per year...
We know year 1 ( or first 15 mo) is $27m + 23m over 5-7 years or $3.2m/yr
Year 2 which we will find out in march I am assuming (due to all the companies we have mentioned on this board) will be similar to year 1 ( this could be conservative) = $25m + 20m over 5-7 years or $2.8m/yr
Year 3 I also think will be similar if not bigger, but just to be conservative I will assume $15m upfront + 10m over 5-7 yrs or $1.4m/yr
Year 4 let's just use $8m and 4m over 5-7 years to be conservative
This gives you the revenue picture for these baskets of patents...
Yr 1: $27m + 0
Yr 2: $25m + 3.2m
Yr 3: $15m + 3.2m + 2.8m
Yr 4: $8m + 3.2m + 2.8m + 1.4m
Yr 5: $yr5X + 3.2 + 2.8m +1.4m + .5m
Yr 6: $yr6X + 3.2 + 2.8m +1.4m + .5m + yr5Y
Etc etc etc
This gives you the revenue number...now if you take out the costs such as IV lic costs and portfolio costs and the % of the patents that are dmrc's you can get the total cost. Then you get the net revs attributable to dmrc and multiply that by 20% = dmrc revs from IV which most likely 95% + gross margin
I am using 60% of the IV revs as dmrc's portion of the IV patent baskets and including whatever costs IV incurs in that number...also I agree with the $41m number for iv's licensing costs to dmrc although through 2012 this number is probably more around $32m
Yr 1: $27m =27m.
Yr 2: $28.2m. =55.2m. *.6= 33.12m -32m=1.1m *.2= $200k for dmrc
Yr3: $21m. =76.2m. *6= 45.72m -41m= 4.7m *.2= 900k for dmrc
Yr4: 15.4m. =89.6m. *6= 53.76m -41m= 12.76m *.2= $2.5m for dmrc
Etc etc etc
This is the way I understand the deal...obviously the big variables are each years upfront license payments, the perpetual license payments, the costs of IV, and the % of the revs that are due to dmrc
I think the numbers I used were realistic if not conservative...
I also agree that 1st wave is making the 2nd wave more valuable...
We are in the beginning stages of bringing dmrc tech to the mainstream...I wouldn't be surprised if the license revs from iv deal increased for the next few years...making my estimates very conservative...