##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-15473
 OpenTV Corp.
 (Exact name of Registrant as
    specified in its charter)
  British Virgin
    Islands

98-0212376(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)275 Sacramento Street
    San Francisco, California(Address of principal
    executive offices)

94111(Zip
    Code)   Registrants telephone number, including area code:
 (415) 962-5000
  Securities registered pursuant to Section 12(b) of the
    Act: None
  Securities registered pursuant to Section 12(g) of the
    Act:
  Class A ordinary shares, no par value
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
        DOCUMENTS
    INCORPORATED BY REFERENCE:




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##### 



OPENTV
    CORP.
  2006
    ANNUAL REPORT ON
    FORM 10-K
  PagePart
    IItem 1.


Business


1Item 1A.


Risk
    Factors


10Item 1B.


Unresolved Staff
    Comments


19Item 2.


Properties


20Item 3.


Legal
    Proceedings


20Item 4.


Submission of
    Matters to a Vote of Security Holders


22Part
    IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


23Item 6.


Selected Financial
    Data


27Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


28Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


46Item 8.


Financial
    Statements and Supplementary Data


47Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


47Item 9A.


Controls and
    Procedures


47Item 9B.


Other
    Information


49Part
    IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


50Item 11.


Executive
    Compensation


50Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


50Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


50Item 14.


Principal
    Accounting Fees and Services


50Part
    IVItem 15.


Exhibits, Financial
    Statement Schedules


51Exhibit 3.2


Amended and Restated Articles of
    AssociationExhibit 10.33


Third Amendment to Technology
    License and Distribution Agreement between Sun Microsystems,
    Inc. and OpenTV, Inc., dated June 30, 2005Exhibit
    21.1


List of
    SubsidiariesExhibit
    23.1


Consent of
    Independent Registered Public Accounting Firm (KPMG
    LLP)Exhibit
    23.2


Consent of
    Independent Registered Public Accounting Firm (Grant Thornton
    LLP)Exhibit
    31.1


CertificationExhibit
    31.2


CertificationExhibit
    32.1


CertificationEX-3.2: ARTICLES OF ASSOCIATIONEX-10.33: THIRD AMENDMENT TO TECHNOLOGY LICENSE AND DISTRIBUTION AGREEMENTEX-21.1: SUBSIDIARIESEX-23.1: CONSENT OF KPMG LLPEX-23.2: CONSENT OF GRANT THORNTON LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONS    OpenTV, the OpenTV logo and our product names are trademarks
    or registered trademarks of OpenTV Corp. or its subsidiaries in
    the United States and other countries. Other product names
    mentioned herein may be trademarks or registered trademarks of
    their respective owners.




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This Annual Report on
    Form 10-K,
    including Managements Discussion and Analysis of
    Financial Condition and Results of Operations in
    Item 7, contains forward-looking statements that involve
    risks and uncertainties, as well as assumptions, that, if they
    never materialize or prove incorrect, could cause the results of
    OpenTV Corp. and its consolidated subsidiaries to differ
    materially from those expressed or implied by such
    forward-looking statements. All statements, other than
    statements of historical fact, are statements that could be
    deemed forward-looking statements, including any: projections of
    revenue, gross margin, expenses, earnings or losses from
    operations; statements of the plans, strategies and objectives
    of management for future operations; statements concerning
    developments, performance or market conditions relating to
    products or services; statements regarding future economic
    conditions or performance; statements of expectation or belief;
    and statements of assumptions underlying any of the foregoing.
    You should not place undue reliance on these forward-looking
    statements, which speak only as of the date of this Annual
    Report on
    Form 10-K.
    All these forward-looking statements are based on information
    available to us at this time, and we assume no obligation to
    update any of these statements. Actual results could differ
    materially from those projected in these forward-looking
    statements as a result of many factors, including those
    identified in Item 1A Risk Factors and
    elsewhere. We urge you to review and consider the various
    disclosures made by us in this report, and those detailed from
    time to time in our filings with the Securities and Exchange
    Commission, that attempt to advise you of the risks and factors
    that may affect our future results.
  PART I
  Item 1.
    Business Overview       1




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end-to-end
      Recent
    Events
        Our
    Operating Businesses
   2




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Form 10-K.
  Middleware
    and Integrated Technologies
              OpenTV Core Middleware. video-on-demand
    
    Support for Basic and Advanced Digital Set-top
    Boxes.  OpenTV Core can operate with the
    relatively limited processing power and memory found in most
    mass-market digital set-top boxes currently deployed by network
    operators. OpenTV Core is also suitable for more advanced
    digital set-top boxes which contain increased processing power
    and memory. This permits us to offer technical solutions that
    address the limited capabilities of many set-top boxes that are
    currently deployed by various network operators, while
    simultaneously offering a solution that will position network
    operators to take advantage of more powerful set-top boxes in
    the future. 3




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
    High Definition Content.  OpenTV supports High
    Definition (HD) standards for external displays and peripherals
    such as HDMI (High Definition Multimedia Interface) and HDCP
    (High-Bandwidth Digital Content Protection). Additionally,
    OpenTV Core has the ability to support High Definition graphics.
    On-Demand Content.  OpenTV Core supports a
    variety of on-demand services, including PVR, VOD and Push VOD,
    that enable media-rich user interfaces for browsing content that
    is requested on-demand by the user, either from a local hard
    drive or from an external device, and includes the underlying
    protocols to establish sessions and control streams via
    easy-to-use
    navigational controls.
    HTML Support.  The HTML (HyperText Markup
    Language) browser integrated with OpenTV Core allows the
    utilization of HTML and JavaScript elements in the creation of
    user experiences for digital television as well as the ability
    to deliver existing web-based content to subscribers through a
    digital set-top box.
    Connectivity.  OpenTV Core provides solutions
    for broadcast or
    point-to-multipoint
    networks as well as high bandwidth, bi-directional,
    point-to-point
    networks. OpenTV Core includes modules that support common
    digital television-related communication protocols, including
    the DOCSIS (Data Over Cable Service Interface Specification)
    communications protocol, which provide a data return channel for
    cable modem set-top boxes that enables viewers to retrieve
    information from the Internet at broadband speed.
    Localization.  OpenTV Core supports text input
    and presentation of substantially all languages in common use,
    including double byte Asian languages, and allows for
    localization of interactive television services for different
    countries.
    Measurement.  OpenTV Core provides the support
    for network operators, programmers, and advertisers to collect
    information and data regarding viewer preferences, viewing
    habits, and other analytical information that helps to assess
    the efficacy of programming and advertising.  OpenTV PVR. easy-to-use
  OpenTV Device Mosaic.
  OpenTV Enterprise Solutions.
  
    OpenTV Streamer.  OpenTV Streamer enables
    network operators to integrate applications and data with audio
    and video signals for reception on set-top boxes enabled with
    OpenTV Core. OpenTV Streamer relies on hardware architecture
    that is capable of interfacing with any standard digital
    broadcast system.
    OpenTV Account.  OpenTV Account enables
    electronic commerce features within interactive television
    applications and gives network operators the opportunity to
    develop commerce-related interactive television revenue streams.
    Key features of OpenTV Account include single sign-on
    management, electronic-receipt management, electronic-wallet and
    address book management, and security.
    OpenTV Notify.  OpenTV Notify enables network
    operators to send broadcast notifications to individual or
    multiple set-top boxes allowing network operators to deliver
    convenient messaging, such as email, instant messaging, order
    confirmation, and news alerts to their subscribers. 4




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
    OpenTV Automate.  OpenTV Automate provides
    content management, scheduling, and synchronization for
    interactive television applications including enhanced
    television, interactive advertising, and broadcast virtual
    channels.  OpenTV Development Tools and Support for Third Party
    Application Developers.
  Applications
    
    advanced advertising solutions, including targeted and
    addressable advertising and traffic and billing systems;
    interactive games offerings by network operators; and
    the delivery of interactive and enhanced programming content.    OpenTV Advanced Advertising
    Solutions.
  video-on-demand
    
    OpenTV AdVision and OpenTV Eclipse.  Both
    OpenTV AdVision and OpenTV Eclipse are advertising sales and
    inventory management systems, or traffic and billing systems,
    that manage various media platforms and outlets, simultaneously
    providing network operators the tools to manage local cable
    television, cable networks, and proprietary broadband networks
    by scheduling and monitoring the display of advertising, and
    billing the advertisers based upon such monitoring. Our traffic
    and billing solutions are currently deployed by 10 network
    operators in 15 of the top 25 United States cable television
    markets. Neither OpenTV AdVision nor OpenTV Eclipse is dependent
    on a network operator deploying OpenTVs middleware
    solutions.
    OpenTV SpotOn.  OpenTV SpotOn enables network
    operators to offer addressable advertising that can be delivered
    to particular households based on individual profiles. OpenTV
    SpotOn is not dependent on a network operator deploying
    OpenTVs middleware solutions. Different advertising
    messages can be simultaneously targeted to households through
    the use of technology that permits set-top boxes to seamlessly
    jump between video signals. With this technology, a network
    operator can, for example, deliver an advertisement for a
    pick-up
    truck to one household while simultaneously delivering an
    advertisement, in 5




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the same interval, for a sedan or sports coupe to a different
    household based on demographic profiles. The network operator
    can also measure and track each addressable spot and receive
    valuable aggregate viewer data, enabling advertisers to build
    profiles, and help drive improved analysis and research for
    future marketing and planning. We carefully review and assess,
    with our customers, the privacy issues associated with this type
    of product to ensure that our product is deployed in a manner
    that addresses the various privacy laws, regulations and
    practices that are evolving in the sector.  
    OpenTV Ad Producer.  OpenTV Ad Producer is a
    template-based tool that allows a third party, such as an
    advertising agency, to create interactive advertising content by
    assembling graphic assets following a
    step-by-step
    process. OpenTV Ad Producer outputs Extensible Markup Language
    (XML) that can be easily interpreted by the OpenTV Ad Manager
    system.
    OpenTV Ad Manager.  OpenTV Ad Manager is a
    Windows-based software tool that enables network operators to
    take the XML file generated by the OpenTV Ad Producer and
    preview it, verify the content, authenticate the content,
    transcode the content to binary code that each set-top box can
    interpret, and schedule the application for broadcast.
    OpenTV Inject.  OpenTV Inject is a
    post-production video editing tool that enables producers to
    easily insert triggers into an analog or digital
    video stream. The trigger is detected by a set-top box when the
    video plays. An on-screen prompt is automatically displayed,
    alerting the viewer that additional interactive content is
    available.
    OpenTV NMI.  OpenTV National Marketing
    Interconnect is an
    end-to-end
    managed service that operates as a national interconnect for
    cable system operators, managing promotional inventory and
    certain advanced advertising applications.  PlayJam.
    pay-per-play
  OpenTV Enhanced Content. pay-per-view
 6




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BettingCorp
  Heroe
  Professional
    Services and Support
  end-to-end
  Customer
    and Industry Relationships
    
    Network Operators.  Over 40 network
    operators around the world have launched our middleware
    platform, including ZeeTV (Essel Group) in India, Austar
    Entertainment Pty Ltd. and FOXTEL in Australia, Bell ExpressVu
    in Canada, BSkyB in the United Kingdom, Dong Fang Cable Network
    Co. Ltd. in China, EchoStars DISH Network in the United
    States, MultiChoice in Africa, TPS in France, Sky Italia in
    Italy, Liberty Global in Europe, and Viasat in Sweden. The
    number of network operators that have deployed our software may
    change from year to year as network operators continue to
    consolidate or merge.
    Set-Top Box Manufacturers.  Our software
    has been ported by more than 40 manufacturers on hundreds of
    set-top box models, including models produced by Advanced
    Digital Broadcast, Amstrad, EchoStar, Matsushita Electric,
    Motorola, Inc., Phillips, Pace Micro Technology, Sagem, Samsung,
    Scientific-Atlanta, Inc., Thomson, and UEC Technologies (Pty)
    Ltd.
    Chipset Manufacturers.  OpenTV middleware has
    been ported to most of the major chipset vendors for set-top
    boxes, including Broadcom, Conexant, NEC, and ST
    Microelectronics. OpenTV middleware has also been ported to the
    latest generation of chipsets supporting MPEG-4 AVC. 7




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
    Programming Networks.  We have worked with
    numerous programming networks including NBC, American
    Broadcasting Company, Turner Broadcasting System, Inc.,
    Discovery Communications, Inc., QVC Shopping Network, Playboy
    Enterprises, Inc., and Showtime Networks, Inc. to enhance
    programming content and advertising on their networks.
    Conditional Access Providers.  We have
    integrated our middleware with conditional access software
    provided by Conax, Irdeto, Motorola, Nagravision (which is
    controlled by Kudelski), NDS Group plc, Scientific-Atlanta
    (which was acquired by Cisco Systems, Inc. in 2006) and
    Viaccess.    Sales and
    Marketing
    Competition
    Middleware
    and Integrated Technologies
     8




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end-to-end
  Gemstar-TV
  Applications
      BettingCorp
   9




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Regulations
      Intellectual
    Property and Research and Development
    Employees
    Available
    Information
  http://www.opentv.com Form 10-K, Form 10-Q, Form 8-K
  1-800-SEC-0330. http://www.sec.gov.
  Item 1A.
    Risk
    Factors  Factors
    That May Affect Future Results
  Form 10-K,
  We
    have a history of net losses, and we may continue to experience
    net losses in the future.
   10




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We
    have historically derived a significant percentage of our
    revenues from licensing our middleware to network operators. Our
    opportunities for future revenue growth with middleware are
    limited by the actual number of worldwide network operators and
    by technology decisions they make from time to
    time.
      
    network operators that have selected our middleware may switch
    to another middleware platform for the provision of interactive
    services, reduce their pace of set-top box deployment or stop
    deploying set-top boxes enabled with our middleware, decrease or
    stop their use of our support services, or choose not to upgrade
    or add additional features to the version of our middleware
    running on their networks;
    network operators that have not selected our middleware may
    choose another middleware platform for the provision of
    interactive services, which could include the selection of
    standards-based solutions such as the Multimedia Home Platform,
    or MHP, and the OpenCable Applications Platform, or OCAP; or
    a meaningful opportunity to deploy our middleware in the markets
    that have not yet adopted interactive television on a large
    scale may never develop or may develop at slower pace than
    expected.    We
    offer volume discounts to certain customers, which may, over
    time, depress our average pricing. While deployments of our
    software may continue to grow, those discounts, as they are
    triggered, may limit the rate of our royalty growth in the
    future.
    We
    expect a more significant portion of our revenue growth in the
    future to be derived from interactive applications that we
    develop and market. If we are not successful in developing and
    marketing interactive applications, our future revenue growth
    may be limited.
   11




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Two of
    our potential North American cable customers, Cox Communications
    and Comcast Corporation, joined together in early 2005 to
    acquire certain assets from Liberate Technologies, one of our
    direct competitors in the middleware business. That acquisition,
    which closed in April 2005, is likely to eliminate Cox and
    Comcast as potential customers for our middleware, which could
    adversely affect our ability to grow.
    A
    significant percentage of our revenues are currently provided by
    entities affiliated with News Corporation, which also controls
    companies that compete with us in certain market segments. Those
    circumstances may make it more difficult for us, over the
    long-term, to sell products, technologies or services to News
    Corporation affiliates in market segments in which other News
    Corporation affiliates offer competing products.
  Gemstar-TV
  We may
    be unable in the future to raise additional capital required to
    support our operating activities.
   12




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We
    realize a percentage of our revenue from revenue sharing and
    subscription-based arrangements, especially in our applications
    business. We are not certain that those revenue models will be
    generally acceptable to our customers over the long-term or that
    they will offer us significant opportunities for revenue growth,
    which could adversely affect the growth opportunities for our
    applications business.
    The
    market for our products and services is subject to significant
    competition, which could adversely affect our
    business.
    The
    trend of consolidation among industry participants may adversely
    impact our business, results of operations and future
    prospects.
  Gemstar-TV
 13




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Unanticipated
    fluctuations in our quarterly operating results could affect our
    stock price.
  quarter-to-quarter
    
    Changes in the rate of capital spending and the rollout of
    interactive television-related products and services by network
    operators;
    The number, size and scope of network operators deploying
    OpenTV-enabled interactive services and the associated rollout
    to subscribers;
    Changes in our operating expenses necessary to meet business and
    customer requirements;
    Increased competition in general and any changes in our pricing
    policies that may result from increased competitive pressures;
    Potential downturns in our customers businesses or in the
    domestic or international markets for our products and services;
    The ability to generate applications-related revenue from
    existing and potential customers;
    Changes in technology, whether or not developed by us;
    Our ability to develop and introduce on a timely basis new or
    enhanced versions of our products that can compete favorably in
    the marketplace; and
    The timing of revenue recognition associated with major
    licensing and services agreements.  quarter-to-quarter
  We
    depend upon key personnel, including our senior executives and
    technical and engineering staff, to operate our business
    effectively, and we may be unable to attract or retain such
    personnel.
    We
    continue to evaluate our business operations and may implement
    structural and other changes that affect the conduct of our
    worldwide business operations. As we continue to align our
    resources appropriately with our evolving business, we may face
    unintended consequences or suffer adverse effects on our
    operations or personnel.
   14




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Interactive
    television remains an emerging business and it may not attract
    widespread market acceptance or demand.
    Because
    much of our success and value lies in our ownership and use of
    our intellectual property, our failure to protect our
    intellectual property and develop new proprietary technology may
    negatively affect us.
      Intellectual
    property infringement claims may be asserted against us, which
    could disrupt our business.
    We
    grant certain indemnification rights to our customers when we
    license our software technologies. We may, therefore, become
    subject to third party infringement claims through those
    commercial arrangements. In addition, the damages to which we
    are subject may be increased by the use of our technologies in
    our customers products.
   15




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The
    adoption of industry-wide standards for interactive television
    could adversely affect our ability to sell our products and
    services or place downward pressure on our
    pricing.
    The
    adoption of incompatible standards by our industry and rapid
    technological advances could render our products and services
    obsolete or non-competitive.
        Government
    regulations may adversely affect our business.
   16




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Changes
    to current accounting policies or in how such policies are
    interpreted or applied to our business could have a significant
    effect on our reported financial results or the way in which we
    conduct our business and could make it difficult for investors
    to assess properly our financial condition or operating
    results.
    
    Revenue recognition;
    Accounting for share-based compensation;
    Accounting for income taxes; and
    Accounting for business combinations, related goodwill and other
    intangible assets.    Share-Based Payment
  Through
    the use of our technology, we have the ability to collect
    personal and confidential information from set-top boxes. If we
    fail to protect this information from security breaches or
    misuse this information, then our operations could be disrupted
    and we could be subject to litigation and liability under
    privacy laws.
   17




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Our
    multinational operations expose us to special risks that could
    increase our expenses, adversely affect our operating results
    and require increased time and attention of
    management.
    
    differing legal and regulatory requirements and changes in those
    requirements;
    potential loss of proprietary information due to piracy,
    misappropriation or weaker laws regarding intellectual property
    protection;
    export and import restrictions, tariffs and other trade
    barriers;
    currency fluctuations and devaluations;
    difficulties in staffing and managing offices as a result of,
    among other things, distance, language and cultural differences;
    longer payment cycles and problems in collecting accounts
    receivable;
    political and economic instability; and
    potentially adverse tax consequences.    Our
    software products may contain errors, which could cause us to
    lose revenue and incur unexpected expenses.
      The
    interests of our majority owner may differ from yours and may
    result in OpenTV acting in a manner inconsistent with your
    general interests.
   18




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Because
    we are controlled by Kudelski, we are exempt from certain
    listing requirements of the Nasdaq Global Market relating to
    corporate governance matters.
    Because
    we are a British Virgin Islands company, you may not be able to
    enforce judgments against us that are obtained in United States
    courts.
      Because
    we are a British Virgin Islands company, your rights as a
    stockholder may be less clearly established as compared to the
    rights of stockholders of companies incorporated in other
    jurisdictions.
    Certain
    provisions contained in our charter documents could deter a
    change of control of us.
    Item 1B.
    Unresolved
    Staff Comments   19




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Item 2.
    Properties    Item 3.
    Legal
    Proceedings  OpenTV, Inc. v. Liberate Technologies,
    Inc.
      Initial Public Offering Securities
    Litigation. Brody v. OpenTV
    Corp., et al. In re
    OpenTV Corp. Initial Public Offering Securities Litigation. In re Initial Public Offering Securities
    Litigation
 20




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In re Wink Communications, Inc.
    Initial Public Offering Securities Litigation. In
    re Initial Public Offering Securities Litigation.
  Litigation Relating to the Acquisition of ACTV,
    Inc.
  Broadcast Innovation Matter.
 21




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and/or
  Personalized Media Communications, LLC. and/or
  Other Matters.
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   22




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PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
      Nasdaq GlobalMarketLow


High2005First Quarter

$
2.29


$
3.90Second Quarter


2.07



2.96Third Quarter


2.47



3.45Fourth Quarter


2.09



2.902006First Quarter

$
2.19


$
2.98Second Quarter


2.46



4.18Third Quarter


2.65



4.01Fourth Quarter


2.27



3.15   Holders
    Dividends
   23




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STOCK
    PERFORMANCE GRAPH
        COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN among
    OpenTV Corp., The NASDAQ Composite Index
    and The NASDAQ Computer & Data Processing Index
  
  12/01


12/02


12/03


12/04


12/05


12/06OpenTV Corp.


100.00



14.39



40.39



46.43



27.09



28.05NASDAQ
    Composite(1)


100.00



69.66



99.71



113.79



114.47



124.20NASDAQ Computer & Data
    Processing


100.00



70.29



89.82



102.40



105.49



119.25      (1)
    In prior years, we used the Nasdaq Stock Market (U.S. Index),
    which was discontinued in 2006. Accordingly, we now use the
    Nasdaq Composite Index as a replacement for the discontinued
    index. 24




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Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Equity
    Compensation Plan Information
  (a)


(b)


(c)Number of Securities


Weighted-Average


Number of Securitiesto be Issued Upon


Exercise Price of


Remaining Available forExercise of


Outstanding Options,


Future IssuanceOutstanding Options,


Warrants and


(excluding SecuritiesPlan Category

Warrants and Rights


Rights


reflected in column(a))Equity compensation plans approved
    by security holders


9,474,651
(1)

$
4.99



4,440,300
(2)Equity compensation plans not
    approved by security holders


831,300
(3)

$
3.41
(4)


Total


10,305,951


$
4.97
(4)


4,440,300       
    our Amended and Restated 1999 Share Option/ Share Issuance
    Plan (the 1999 Plan);
    our 2001 Nonstatutory Stock Option Plan (the 2001
    Plan); and
    our 2003 Incentive Plan (the 2003 Plan).    (1)
    
    Represents (i) 2,891,213 Class A ordinary shares
    issuable upon the exercise of options outstanding under the 1999
    Plan, (ii) 92,734 Class A ordinary shares issuable
    upon the exercise of outstanding options assumed in connection
    with our acquisition of Spyglass, Inc. in July 2000,
    (iii) 4,267,378 Class A ordinary shares issuable upon
    the exercise of options outstanding under the 2003 Plan,
    (iv) 163,626 Class A ordinary shares issuable upon the
    exercise of outstanding options, assumed in connection with our
    acquisition of ACTV, Inc. in July 2003, and (v) 2,059,700
    Class A ordinary shares issuable upon the exercise of
    options outstanding under the 2005 Plan.(2)
    
    Represents (i) 3,940,300 Class A ordinary shares
    available for future issuance under the 2005 Plan and
    (ii) 500,000 Class A ordinary shares available for
    future issuance under the ESPP.(3)
    
    Represents (i) 143,734 Class A ordinary shares
    issuable upon exercise of outstanding stock options granted
    under the 2001 Plan, and (ii) 687,566 Class A ordinary
    shares issuable upon the exercise of exchange rights granted
    under our 2000 Exchange Plan, which we refer to as the Exchange
    Plan.(4)
    
    Does not include information regarding weighted-average exercise
    price of Class A ordinary shares issuable under the
    Exchange Plan because such issuances do not involve the payment
    of an exercise price or the provision of other monetary
    consideration.  2000
    Exchange Plan
  one-for-one
 25




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##### Table of Contents



2001
    Nonstatutory Stock Option Plan
    Share Reserve.
  Administration.
  Eligibility.
  
    employees (other than employees who are executive
    officers); and
    consultants.  Structure of Plan.
  Corporate Transaction.
  Amendment and Termination.
  Certain
    Aspects of British Virgin Islands Law
     26




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##### Table of Contents



Recent
    Sales of Unregistered Securities
    Item 6.
    Selected
    Financial Data  Item 7. Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations
  Year Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share amounts)Results of
    operations:Revenues

$
101,908


$
87,380


$
77,169


$
64,197


$
59,686Cost of revenues


46,933



34,802



39,264



50,373



56,211Gross profit


54,975



52,578



37,905



13,824



3,475Operating expenses(1)


66,875



65,538



62,531



67,295



662,105Loss from operations


(11,900
)


(12,960
)


(24,626
)


(53,471
)


(658,630
)Net loss(2)


(10,818
)


(8,473
)


(21,962
)


(54,094
)


(802,564
)Net loss per share, basic and
    diluted(2)


(0.08
)


(0.07
)


(0.18
)


(0.57
)


(11.17
)     (1)
    
    2006 included $1,324 for restructuring and impairment cost, $747
    for impairment of goodwill and $3,324 for share-based
    compensation; 2005 included $2,545 for restructuring and
    impairment costs; 2004 included $(4,600) for NASCAR amendment
    and $893 for restructuring and impairment costs; 2003 included
    $6,587 for restructuring and impairment costs and $1,497 for
    impairment of intangible assets; 2002 included $29,414 for
    restructuring and impairment costs, $24,796 for impairment of
    intangible assets and $514,501 for impairment of goodwill.(2)
    
    2005 included a gain of $(3,126) for the sale of a cost
    investment; 2002 included $10,923 for impairment of equity
    investments and notes receivable and $129,852 for cumulative
    effect of accounting change, net of tax.  As of December 31,2006


2005


2004


2003


2002(In thousands)Financial position:Cash, cash equivalents and
    marketable securities

$
65,225


$
64,472


$
63,020


$
73,496


$
87,707Working capital


45,397



38,535



19,981



19,395



30,276Total assets


220,764



202,065



192,411



219,555



197,336Total shareholders equity


167,831



152,512



145,175



156,983



140,996  27




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis provides information
    concerning our financial condition and results of operations for
    the year ended December 31, 2006. This discussion should be
    read in conjunction with our Consolidated Financial Statements
    and the notes thereto. Segment information appearing below in
    this discussion and analysis, and in Note 18 of our
    Consolidated Financial Statements, is presented in accordance
    with SFAS 131, Disclosures about Segments of an
    Enterprise and Related Information.
  Overview
      Recent
    Events
        Critical
    Accounting Policies and Estimates
   28




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##### Table of Contents



Revenue
    Recognition
  97-2, Software Revenue Recognition (SOP 97-2), SOP 81-1, Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts (SOP 81-1) Revenue Recognition SOP 97-2
  SOP 81-1.
   29




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##### Table of Contents



Valuation
    Allowances
      Impairment
    of Goodwill and Long-lived Assets
    Restructuring
    Costs
    Share-Based
    Compensation
       30




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##### Table of Contents



Interaction Between FASB Statement No. 123(R), and
    Certain SEC Rules and Regulations Regarding the Valuation of
    Share-based Payment Arrangement for Public Companies,
  Form 10-K
  Recent
    Accounting Pronouncements
  Accounting for
    Uncertainty in Income Taxes Accounting
    for Income Taxes
   31




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##### Table of Contents



Fair Value Measures
  Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements
  Managements
    Assessment of Internal Control Over Financial Reporting and
    Disclosure Controls
  Form 10-K,
  Rules 13a-15(f)
    Form 10-K,
  Form 10-K Form 10-K.
 32




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##### Table of Contents



Years
    Ended December 31, 2006, 2005, and 2004
  Revenues
    Year Ended December 31,2006


%


2005


%


2004


%Royalties and licenses

$
65.9



65
%

$
55.1



63
%

$
48.9



63
%Services and other


36.0



35
%


32.3



37
%


28.3



37
%Total Revenues

$
101.9



100
%

$
87.4



100
%

$
77.2



100
%   Royalties and licenses. SOP 97-2
     33




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##### Table of Contents



34




---



##### Table of Contents



Services and Other.
     35




---



##### Table of Contents



Operating
    Expenses
    Year Ended December 31,% of





% of





% of2006


Revenue


2005


Revenue


2004


RevenueCost of royalties and licenses

$
7.5



7
%

$
6.4



7
%

$
8.2



11
%Cost of services and other


39.4



39
%


28.4



33
%


31.1



40
%Total cost of revenues


46.9



46
%


34.8



40
%


39.3



51
%Research and development


32.1



32
%


33.9



39
%


29.7



39
%Sales and marketing


12.0



12
%


11.5



13
%


15.1



20
%General and administrative


18.6



18
%


15.9



18
%


17.9



23
%Restructuring and impairment costs


1.3



1
%


2.5



3
%


0.9



1
%Amortization of intangible assets


2.1



2
%


1.7



2
%


3.5



4
%Impairment of goodwill


0.8



1
%














NASCAR amendment


















(4.6
)


(6
)%Total Operating Expenses

$
113.8



112
%

$
100.3



115
%

$
101.8



132
%   Cost of Royalties and Licenses.
      Cost of Services and Other.
   36




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##### Table of Contents



NASCAR Amendment.
  Research and Development.
        Sales and Marketing.
      General and Administrative.
   37




---



##### Table of Contents



Restructuring and Impairment Costs.
      Amortization of Intangible Assets.
      Impairment of goodwill.
  Interest
    Income
   38




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##### Table of Contents



Other
    Income and Expense Items
    Minority
    Interest
    Income
    Taxes
        Business
    Segment Results
  Disclosure
    about Segments of an Enterprise and Related
    Information.
   39




---



##### Table of Contents



Subsequent
    Events Form 10-K, Form 10-K
 40




---



##### Table of Contents



Year Ended December 31,% of





% of





% ofSegment





Segment





Segment2006


Revenue


2005


Revenue


2004


RevenueMiddleware and integrated
    techonologiesRoyalties and licenses

$
60.7



77
%

$
54.4



80
%

$
48.8



77
%Services and other


18.2



23
%


13.9



20
%


14.3



23
%Subtotal  Middleware
    and integrated technologies


78.9



100
%


68.3



100
%


63.1



100
%ApplicationsRoyalties and licenses


4.0



22
%


0.7



5
%


0.1



1
%Services and other


14.4



78
%


13.4



95
%


12.0



99
%Subtotal  Applications


18.4



100
%


14.1



100
%


12.1



100
%BettingCorpRoyalties and licenses


1.2



26
%














Services and other


3.4



74
%


5.0



100
%


2.0



100
%Subtotal  BettingCorp


4.6



100
%


5.0



100
%


2.0



100
%Total Revenues

$
101.9






$
87.4






$
77.2Contribution Margin/(Loss):Middleware and integrated
    technologies

$
28.3






$
28.9






$
26.3Applications


(1.4
)






(4.5
)






(6.8
)BettingCorp


(1.7
)






(4.9
)






(4.5
)Total Contribution Margin


25.2







19.5







15.0Unallocated corporate overhead


(21.4
)






(20.2
)






(29.0
)NASCAR amendment


















4.6Restructuring and impairment costs


(1.3
)






(2.5
)






(0.9
)Depreciation and amortization


(3.2
)






(3.9
)






(5.9
)Amortization of intangible assets


(7.0
)






(5.8
)






(8.2
)Share-based and non-cash
    compensation


(3.4
)






(0.1
)






(0.2
)Interest income


3.1







1.7







0.9Other income


0.4







3.8







0.5Minority interest










0.1







0.5Impairment of goodwill


(0.8
)














Loss before income taxes


(8.4
)






(7.4
)






(22.7
)Income tax expense/(benefit)


2.4







1.1







(0.8
)Net loss

$
(10.8
)





$
(8.5
)





$
(21.9
)   Middleware
    and Integrated Technologies
     41




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##### Table of Contents



Royalties and licenses Revenues
  Services and other Revenues
    Applications
        BettingCorp
   42




---



##### Table of Contents



Deferred
    Revenue
  SOP 97-2, SOP 81-1
        Expected RecognitionYear Ending December 31,

of Unearned Revenue(In millions)2007

$
6.72008


7.6Thereafter


5.0$
19.3    43




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##### Table of Contents



Liquidity
    and Capital Resources
               44




---



##### Table of Contents



Recent Events
  Commitments
    and Contractual Obligations
    Due in


Due in


Due in


Due inTotal


2007


2008-2009


2010-2011


2012 or AfterOperating leases obligations

$
15.6


$
5.2


$
9.0


$
1.3


$
0.1Noncancellable purchase obligations


0.7



0.5



0.2







Total contractual obligations

$
16.3


$
5.7


$
9.2


$
1.3


$
0.1       Restructuring and Impairment Costs
  Indemnification
     45




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##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Fixed
    Income Investment Risk
  available-for-sale. Available-for-sale
        Valuation of


Valuation of


Valuation of


Valuation ofFair Value as


Securities if


Securities if


Securities if


Securities ifof December 31,


Interest Rates


Interest Rates


Interest Rates


Interest Rates2006


Decrease 1%


Increase 1%


Decrease 2%


Increase 2%Marketable debt securities

$
16,609


$
16,704


$
16,514


$
16,799


$
16,419     Foreign
    Currency Exchange Rate Risk
  non-United
  Accounting for Derivative
    Instruments and Hedging Activities.
 46




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data    Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  a.  Disclosure
    Controls and Procedures
  Rules 13a-15(f) Form 10-K Form 10-K.
  b.  Management
    Report on Internal Control over Financial
    Reporting
  Rules 13a-15(f) Internal Control 
    Integrated Framework Form 10-K.
  c.  Limitations
    on Controls
   47




---



##### Table of Contents



d.  Significant
    Changes in Internal Control over Financial
    Reporting
  Form 10-K
  
    The companys financial reporting process did not provide
    for effective account analysis for certain financial statement
    accounts. Specifically, the accounting for accruals, long-term
    other assets, and deferred-tax assets was not adequately
    analyzed. This material weakness resulted in errors, which were
    material in the aggregate, in the companys preliminary
    2005 financial statements.
    The company did not have sufficient personnel with adequate
    technical expertise to analyze effectively, and review in a
    timely manner, its accounting for revenue and income taxes.
    These material weaknesses resulted in material errors in the
    companys accounting for: (a) certain complex
    multiple-element software license and professional service
    arrangements; and (b) income taxes and related financial
    statement note disclosures.      
    Our management introduced additional procedures to ensure a more
    thorough review of financial data in the financial reporting and
    close process; and
    Our management evaluated its finance personnel, developed a plan
    to enhance the current staffs capabilities and
    supplemented our department with additional internal and
    external resources with appropriate accounting knowledge and
    experience in the areas where these were required.  Form 10-K
   48




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control  Integrated Framework
        Internal
    Control-Integrated Framework Internal Control  Integrated Framework
    GRANT
    THORNTON LLP
     Item 9B.
    Other
    Information   49




---



##### Table of Contents



PART III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   50




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##### Table of Contents



PART IV
  Item 15.
    Exhibits,
    Financial Statement Schedules  (a)(1)  Financial
    Statements Included in Part II of this Report:
  PageIndex to Consolidated Financial
    Statements


F-1Report of Independent Registered
    Public Accounting Firm  Grant Thornton LLP


F-2Report of Independent Registered
    Public Accounting Firm  KPMG LLP


F-3Consolidated Balance Sheets as of
    December 31, 2006 and 2005


F-4Consolidated Statements of
    Operations for the years ended December 31, 2006, 2005 and
    2004


F-5Consolidated Statements of
    Shareholders Equity and Comprehensive Loss for the years
    ended December 31, 2006, 2005 and 2004


F-6Consolidated Statements of Cash
    Flows for the years ended December 31, 2006, 2005 and 2004


F-7Notes to the Consolidated
    Financial Statements


F-8   (2)  Financial
    Statement Schedule
    (3)  Exhibits
  2
.1

Asset Purchase Agreement, dated as
    of September 7, 2005, by and among OpenTV Corp., OpenTV
    Advertising Holdings, Inc., CAM Systems, L.L.C., StarNet, L.P.,
    StarNet Management, L.L.C., H. Chase Lenfest, H.F. Lenfest and
    HCL Family Holdings, L.P. (incorporated by reference to
    Exhibit 2.1 to the Current Report on
    Form 8-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on September 9, 2005).3
.1

Amended and Restated Memorandum of
    Association of OpenTV Corp. (incorporated by reference to
    Exhibit 3.1 to the Annual Report on
    Form 10-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on March 30, 2006).3
.2*

Articles of Association of OpenTV
    Corp.4
.1

Specimen Certificate for
    Class A ordinary shares of OpenTV Corp. (incorporated by
    reference to Exhibit 4.1 of Amendment No. 1 (the
    First F-1 Amendment) to the F-1 Registration
    Statement, as filed with the Securities and Exchange Commission
    on November 10, 1999).10
.1

Form of Indemnification Agreement
    for directors and officers of OpenTV Corp. (incorporated by
    reference to Exhibit 10.1 to the Annual Report on
    Form 10-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on March 16, 2005 (the 2005
    10-K)).10
.2

OpenTV Corp.s Amended and
    Restated 1999 Employee Stock Purchase Plan (incorporated by
    reference to Exhibit 4.2 to the Annual Report on
    Form 20-F
    of OpenTV Corp. for the year ended December 31, 2000 (the
    2000 20-F).10
.3

OpenTV Corp.s Amended and
    Restated 1999 Share Option/Share Issuance Plan
    (incorporated by reference to Exhibit 10.3 of Amendment
    No. 3 (the Third F-1 Amendment) to the F-1
    Registration Statement, as filed with the Securities and
    Exchange Commission on November 19, 1999).10
.4

Shareholders Agreement among
    OTV Holdings Limited, OpenTV Corp. and Sun TSI Subsidiary, Inc.
    dated October 23, 1999 (incorporated by reference to
    Exhibit 10.4 to the Third F-1 Amendment).10
.5

Trademark License Agreement
    between Sun Microsystems, Inc. and OpenTV, Inc. dated
    March 20, 1998 (incorporated by reference to
    Exhibit 10.5 to the Third F-1 Amendment).10
.6

Technology License and
    Distribution Agreement between Sun Microsystems, Inc. and
    OpenTV, Inc. dated March 20, 1998 (incorporated by
    reference to Exhibit 10.6 to the Third F-1 Amendment). 51




---



##### Table of Contents



10
.7

First Amendment to Technology
    License and Distribution Agreement between Sun Microsystems,
    Inc. and OpenTV, Inc. dated June 30, 1999 (incorporated by
    reference to Exhibit 10.7 to the Third F-1 Amendment).10
.8

Source Code License and Binary
    Distribution Agreement between Sun Microsystems, Inc. and
    OpenTV, Inc. effective July 1, 1996 (incorporated by
    reference to Exhibit 10.10 to the Third F-1 Amendment).10
.9

Source Code License and Binary
    Distribution Agreement between Sun Microsystems, Inc. and
    OpenTV, Inc. effective April 1, 1998 (incorporated by
    reference to Exhibit 10.9 to the Third F-1 Amendment).10
.10

Convertible Preferred Stock and
    Warrant Purchase Agreement among OpenTV Corp., America Online,
    Inc., General Instrument Corporation, LDIG OTV, Inc., News
    America Incorporated and TWI-OTV Holdings, Inc., dated
    October 23, 1999 (incorporated by reference to
    Exhibit 10.11 to the First F-1 Amendment).10
.11

Investors Rights Agreement
    among OpenTV Corp., America Online, Inc., General Instrument
    Corporation, LDIG OTV, Inc., News America Incorporated, TWI-OTV
    Holdings, Inc., OTV Holdings Limited, Sun TSI Subsidiary, Inc.
    and MIH (BVI) Ltd., dated October 23, 1999 (incorporated by
    reference to Exhibit 10.14 to the Second F-1 Amendment).10
.12

OpenTVs Amended and Restated
    2000 Exchange Plan (incorporated by reference to
    Exhibit 10.1 to the
    Form 6-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on August 30, 2000).10
.13

Registration Rights Agreement by
    and among OpenTV Corp., General Instrument Corporation and Cable
    Soft Communications, Inc. dated November 13, 2000
    (incorporated by reference to Exhibit 4.1 to the
    Form 6-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on December 1, 2000).10
.14

Marketing Agreement dated as of
    January 22, 2001 by and between British Sky Broadcasting
    Limited and OpenTV, Inc. (incorporated by reference to
    Exhibit 4.22 to the 2000 20-F).10
.15

Second Amendment to Technology
    License and Distribution Agreement between Sun Microsystems,
    Inc. and OpenTV, Inc., dated December 20, 2000
    (incorporated by reference to Exhibit 4.23 to the 2000
    20-F).10
.16

OpenTVs 2001 Nonstatutory
    Stock Option Plan (incorporated by reference to Exhibit 4.1
    to the Registration Statement on
    Form S-8
    of OpenTV Corp. (File
    No. 333-74026),
    as filed with the Securities and Exchange Commission on
    November 27, 2001).10
.17

License Agreement for OpenTV
    Interactive Applications and Enterprise and Network Solutions,
    dated as of August 16, 2002, by and among OpenTV, Inc.,
    MultiChoice Africa Limited and MIH Limited (incorporated by
    reference to Exhibit 10.31 to the Registration Statement on
    Form S-4
    of OpenTV Corp. (File
    No. 333-102944),
    as filed with the Securities and Exchange Commission on
    February 4, 2003).10
.18

OpenTV Corp. 2003 Incentive Plan
    (incorporated by reference to Exhibit 10.32 to Amendment
    No. 1 to the Registration Statement on
    Form S-4
    of OpenTV Corp.(File
    No. 333-102944),
    as filed with the Securities and Exchange Commission on
    April 25, 2003).10
.19

Letter Agreement between OpenTV,
    Inc. and Mazin Jadallah dated July 26, 2004. (incorporated
    by reference to Exhibit 10.24 to the 2005
    10-K).10
.20

Form of Incentive Stock Option
    Agreement for OpenTV Corp. Amended and Restated 1999 Share
    Option/ Share Issuance Plan. (incorporated by reference to
    Exhibit 10.25 to the 2005
    10-K).10
.21

Form of Nonstatutory Stock Option
    Agreement for OpenTV Corp. 2001 Nonstatutory Stock Option Plan.
    (incorporated by reference to Exhibit 10.26 to the 2005
    10-K).10
.22

Form of Incentive Stock Option
    Agreement for OpenTV Corp. 2003 Incentive Plan. (incorporated by
    reference to Exhibit 10.27 to the 2005
    10-K).10
.23

Retention Agreement, dated
    March 30, 2005, between OpenTV, Inc. and Joel Hassell
    (incorporated by reference to Exhibit 10.29 to the 2005
    Current Report).10
.24

Retention Agreement, dated
    March 30, 2005, between OpenTV, Inc. and Scott Wornow
    (incorporated by reference to Exhibit 10.31 to the 2005
    Current Report).10
.25

Offer Letter to Shum Mukherjee
    dated May 27, 2005 (incorporated by reference to
    Exhibit 10.33 to the Current Report on
    Form 8-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on May 31, 2005). 52




---



##### Table of Contents



10
.26

Employment Agreement, dated as of
    March 23, 2004, between OpenTV Corp. and James Chiddix
    (incorporated by reference to Exhibit 10.1 to the Quarterly
    Report on
    Form 10-Q
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on May 10, 2004).10
.27

OpenTV Corp. 2005 Incentive Plan
    (incorporated by reference to Annex A to the 2005 Proxy
    Statement on Schedule 14A of OpenTV Corp., as filed with
    the Securities and Exchange Commission on October 14, 2005).10
.28

Form of Incentive Stock Option
    Agreement for OpenTV Corp. 2005 Incentive Plan (incorporated by
    reference to Exhibit 4.3 to the Registration Statement on
    Form S-8
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on December 21, 2005 (the 2005
    S-8)).10
.29

Form of Non-Qualified Stock Option
    Agreement for OpenTV Corp. 2005 Incentive Plan (incorporated by
    reference to Exhibit 4.4 to the 2005
    S-8).10
.30

Form of Independent Director Stock
    Option Agreement for OpenTV Corp. 2005 Incentive Plan
    (incorporated by reference to Exhibit 4.5 to the 2005
    S-8).10
.31

Registration Rights Agreement,
    dated as of September 7, 2005, by and among OpenTV Corp.,
    CAM Systems, L.L.C. and StarNet, L.P. (incorporated by reference
    to Exhibit 10.34 to Quarterly Report on
    Form 10-Q
    of OpenTV Corp. for the quarterly period ended
    September 30, 2005, as filed with the Securities and
    Exchange Commission on November 7, 2005).10
.32

Letter Agreement, dated
    February 10, 2006, between OpenTV Corp. and Liberty Media
    Corporation (incorporated by reference to Exhibit 10.41 to
    the Current Report on
    Form 8-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on February 13, 2006).10
.33*

Third Amendment to Technology
    License and Distribution Agreement between Sun Microsystems,
    Inc. and OpenTV, Inc., dated June 30, 2005.10
.34

Separation Agreement, dated
    April 5, 2006, between OpenTV, Inc. and Mark Allen
    (incorporated by reference to Exhibit 10.32 to the Current
    Report on
    Form 8-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on April 5, 2006).10
.35

Separation Agreement, dated
    May 30, 2006, between OpenTV, Inc. and Wesley Hoffman
    (incorporated by reference to Exhibit 10.43 to the Current
    Report on
    Form 8-K
    of OpenTV Corp., as filed with the Securities and Exchange
    Commission on June 5, 2006).10
.36

Employment Agreement with Alan A.
    Guggenheim dated March 13, 2007 (incorporated by reference
    to Exhibit 10.36 to the Current Report on Form 8-K of OpenTV
    Corp., as filed with the Securities and Exchange Commission on
    March 15, 2007).10
.37

Separation Agreement with Scott
    Wornow dated March 13, 2007 (incorporated by reference to
    Exhibit 10.37 to the Current Report on Form 8-K of OpenTV Corp.,
    as filed with the Securities and Exchange Commission on
    March 15, 2007).10
.38

Separation Agreement with Mazin
    Jadallah dated March 13, 2007 (incorporated by reference to
    Exhibit 10.38 to the Current Report on Form 8-K of OpenTV Corp.,
    as filed with the Securities and Exchange Commission on
    March 15, 2007).18
.1

Letter from KPMG LLP dated
    March 12, 2004 regarding change in accounting principle
    (incorporated by reference to Exhibit 18.1 to the Annual
    Report on
    Form 10-K
    of OpenTV Corp. for the year ended December 31, 2003, as
    filed with the Securities and Exchange Commission on
    March 15, 2004).21
.1*

List of Subsidiaries.23
.1*

Consent of Independent Registered
    Public Accounting Firm (KPMG LLP).23
.2*

Consent of Independent Registered
    Public Accounting Firm (Grant Thornton LLP).31
.1*

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2*

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
.1*

Certifications of Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith 53




---



##### Table of Contents



SIGNATURES
       Dated: March 15, 2007

/s/  Alan
    A.
    GuggenheimAlan
    A. GuggenheimChief Executive Officer   POWER OF
    ATTORNEY
  attorneys-in-fact Form 10-K, attorney-in-fact attorney-in-fact
    Name

Title

Date/s/  André
    KudelskiAndré
    Kudelski

Chairman of the Board of Directors

March 15, 2007/s/  Alan
    A. GuggenheimAlan
    A. Guggenheim

Chief Executive Officer and
    Director (Principal Executive Officer)

March 15, 2007/s/  James
    A. ChiddixJames
    A. Chiddix

Director

March 15, 2007/s/  Joseph
    DeissJoseph
    Deiss

Director

March 15, 2007/s/  Lucien
    GaniLucien
    Gani

Director

March 15, 2007/s/  Jerry
    MachovinaJerry
    Machovina

Director

March 15, 2007/s/  Mercer
    ReynoldsMercer
    Reynolds

Director

March 15, 2007/s/  Pierre
    RoyPierre
    Roy

Director

March 15, 2007 54




---



##### Table of Contents



Name

Title

Date/s/  Claude
    SmadjaClaude
    Smadja

Director

March 15, 2007/s/  J.
    David WargoJ.
    David Wargo

Director

March 15, 2007/s/  Shum
    MukherjeeShum
    Mukherjee

Chief Financial Officer
    (Principal Financial Officer and
    Principal Accounting Officer)

March 15, 2007  55




---



##### Table of Contents



PART IV
  OPENTV CORP.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
  Page No.Report of
    Independent Registered Public Accounting Firm  Grant
    Thornton LLP


F-2Report of
    Independent Registered Public Accounting Firm  KPMG
    LLP


F-3Consolidated
    Balance Sheets as of December 31, 2006 and 2005


F-4Consolidated
    Statements of Operations for the years ended December 31,
    2006, 2005, and 2004


F-5Consolidated
    Statements of Shareholders Equity and Comprehensive Loss
    for the years ended December 31, 2006, 2005 and
    2004


F-6Consolidated
    Statements of Cash Flows for the years ended December 31,
    2006, 2005 and 2004


F-7Notes to the
    Consolidated Financial Statements


F-8Schedule II 
    Valuation and Qualifying Accounts  F-1




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm           Share-Based Payment
    Internal Control 
    Integrated Framework
  GRANT
    THORNTON LLP
    F-2




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm           KPMG
    LLP
    F-3




---



##### Table of Contents



OPENTV
    CORP.
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share amounts)
  December 31,


December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
48,616


$
47,229Short-term marketable debt
    securities


8,681



9,030Accounts receivable, net of
    allowance for doubtful accounts of $348 and $305 at
    December 31, 2006, and 2005, respectively


20,560



16,873Prepaid expenses and other current
    assets


5,799



4,638Total current assets


83,656



77,770Long-term marketable debt
    securities


7,928



8,213Property and equipment, net


7,231



5,863Goodwill


98,645



80,124Intangible assets, net


18,477



27,150Other assets


4,827



2,945Total assets

$
220,764


$
202,065LIABILITIES, MINORITY INTEREST
    AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
4,088


$
4,361Accrued liabilities


18,940



18,568Accrued restructuring


2,370



1,931Due to Liberty Media


247



182Current portion of deferred revenue


12,614



14,193Total current liabilities


38,259



39,235Long-term liabilities:Deferred rent


1,201



1,404Deferred revenue


12,987



8,391Total long-term liabilities


14,188



9,795Total liabilities


52,447



49,030Commitments and contingencies
    (Note 16)Minority interest


486



523Shareholders equity:Class A ordinary shares, no
    par value, 500,000,000 shares authorized; 107,906,960 and
    98,105,119 shares issued and outstanding, including
    treasury shares, at December 31, 2006, and 2005,
    respectively


2,235,495



2,230,398Class B ordinary shares, no
    par value, 200,000,000 shares authorized;
    30,631,746 shares issued and outstanding


35,953



35,953Additional paid-in capital


491,630



470,596Treasury shares at cost,
    76,327 shares


(38
)


(38
)Deferred share-based compensation






(2
)Accumulated other comprehensive
    loss


(261
)


(265
)Accumulated deficit


(2,594,948
)


(2,584,130
)Total shareholders equity


167,831



152,512Total liabilities, minority
    interest and shareholders equity

$
220,764


$
202,065    F-4




---



##### Table of Contents



OPENTV
    CORP.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands, except share and per share amounts)
  Year Ended December 31,2006


2005


2004Revenues:Royalties and licenses

$
65,886


$
55,083


$
48,857Services and other


36,022



32,297



28,312Total revenues


101,908



87,380



77,169Cost of revenues:Royalties and licenses


7,560



6,393



8,210Services and other


39,373



28,409



31,054Total cost of revenues


46,933



34,802



39,264Gross profit


54,975



52,578



37,905Operating expenses:Research and development


32,139



33,903



29,753Sales and marketing


12,038



11,448



15,103General and administrative


18,545



15,904



17,876Restructuring and impairment costs


1,324



2,545



893Amortization of intangible assets


2,082



1,738



3,506Impairment of goodwill


747







NASCAR amendment (Note 10)










(4,600
)Total operating expenses


66,875



65,538



62,531Loss from operations


(11,900
)


(12,960
)


(24,626
)Interest income


3,027



1,678



858Other income


408



3,823



499Minority interest


37



62



490Loss before income taxes


(8,428
)


(7,397
)


(22,779
)Income tax expense/(benefit)


2,390



1,076



(817
)Net loss

$
(10,818
)

$
(8,473
)

$
(21,962
)Net loss per share, basic and
    diluted

$
(0.08
)

$
(0.07
)

$
(0.18
)Shares used in per share
    calculation, basic and diluted


137,242,329



124,812,584



121,308,965    F-5




---



##### Table of Contents



OPENTV
    CORP.
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE
    LOSS
 (In
    thousands, except share amounts)
  AccumulatedAdditional





Deferred


Other








OtherClass A


Class B


Paid-In


Treasury


Share-based


Comprehensive


Accumulated





ComprehensiveShares


Amount


Shares


Amount


Capital


Shares


Compensation


Income (Loss)


Deficit


Total


LossBalances, December 31, 2003


88,969,550


$
2,208,370



30,631,746


$
35,953


$
466,228


$
(38
)

$
(36
)

$
201


$
(2,553,695
)

$
156,983Share options exercised


1,852,898



3,448











16



















3,464Shares issued for employee bonus


578,917



1,731































1,731Shares issued for employee and
    director compensation


52,280



172











63



















235Shares issued to Liberty Media as a
    deemed dividend


76,982



230































230Shares issued in exchange for
    OpenTV, Inc. shares


21,666















68



















68Amortization of deferred
    share-based compensation


























26











26Proceeds from BettingCorp liquidity
    guarantee


















4,078



















4,078Unrealized losses on investments,
    net of income taxes






























(115
)






(115
)

$
(115
)Foreign currency translation gains






























437







437



437Net loss


































(21,962
)


(21,962
)


(21,962
)Balances, December 31, 2004


91,552,293



2,213,951



30,631,746



35,953



470,453



(38
)


(10
)


523



(2,575,657
)

$
145,175


$
(21,640
)Share options exercised


145,764



183































183Shares issued for employee bonus


1,162,180



3,180































3,180Shares issued for employee and
    director compensation


12,420



34











117



















151Shares issued in connection with
    acquisition of CAM Systems


5,221,462



13,050































13,050Shares issued in exchange for
    OpenTV, Inc. shares


11,000















26



















26Amortization of deferred
    share-based compensation


























8











8Unrealized gains on investments,
    net of income taxes






























3







3


$
3Foreign currency translation losses






























(791
)






(791
)


(791
)Net loss


































(8,473
)


(8,473
)


(8,473
)Balances, December 31, 2005


98,105,119



2,230,398



30,631,746



35,953



470,596



(38
)


(2
)


(265
)


(2,584,130
)

$
152,512


$
(9,261
)Share options exercised


1,214,519



2,439











15



















2,454Shares issued for employee bonus


935,664



2,658































2,658Share-based and non-cash employee
    and director compensation


















3,443



















3,443Shares issued in exchange for
    OpenTV, Inc. shares


7,651,658















17,576



















17,576Amortization of deferred
    share-based compensation


























2











2Unrealized gains on investments,
    net of income taxes






























37







37


$
37Foreign currency translation losses






























(33
)






(33
)


(33
)Net loss


































(10,818
)


(10,818
)


(10,818
)Balances, December 31, 2006


107,906,960


$
2,235,495



30,631,746


$
35,953


$
491,630


$
(38
)

$



$
(261
)

$
(2,594,948
)

$
167,831


$
(10,814
)    F-6




---



##### Table of Contents



OPENTV
    CORP.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
 Year Ended December 31,2006


2005


2004Cash flows from operating
    activities:Net loss

$
(10,818
)

$
(8,473
)

$
(21,962
)Adjustments to reconcile net loss
    to net cash from operating activities:Depreciation and amortization of
    property and equipment


3,286



3,843



5,941Amortization of intangible assets


6,981



5,758



8,228Share-based compensation


3,324



8



26Non-cash employee compensation


121



151



1,089Provision for/(reduction in)
    doubtful accounts


82



(142
)


(187
)Impairment costs


747



602



1,020Gain on sale of cost investment






(3,126
)


Loss on disposal of fixed assets


24







Minority interest


(37
)


(62
)


(490
)Changes in operating assets and
    liabilities:Accounts receivable


(3,769
)


1,066



(5,327
)Prepaid expenses and other current
    assets


(1,161
)


(991
)


1,024Other assets


(1,882
)


(1,107
)


7,289Accounts payable


(273
)


491



(1,948
)Accrued liabilities and deferred
    rent


2,827



(1,037
)


(6,273
)Accrued restructuring


439



537



(6,395
)Due to Liberty Media


65



(206
)


(242
)Deferred revenue


3,017



5,051



2,033Net cash provided by/(used in)
    operating activities


2,973



2,363



(16,174
)Cash flows from investing
    activities:Purchase of property and equipment


(4,642
)


(3,075
)


(2,070
)Cash provided by/(used in)
    acquisitions, net of cash acquired (Note 5)






(4,199
)


4,078Proceeds from sale of cost
    investment






7,126



Proceeds from sale of marketable
    debt securities


12,448



40,155



22,541Purchase of marketable debt
    securities


(11,777
)


(30,035
)


(24,267
)Private equity investments






(300
)


Net cash provided/(used in) by
    investing activities


(3,971
)


9,672



282Cash flows from financing
    activities:Proceeds from issuance of ordinary
    shares


2,454



183



3,464Net cash provided by financing
    activities


2,454



183



3,464Effect of exchange rate changes on
    cash and cash equivalents


(69
)


(649
)


341Net increase/(decrease) in cash
    and cash equivalents


1,387



11,569



(12,087
)Cash and cash equivalents,
    beginning of period


47,229



35,660



47,747Cash and cash equivalents, end of
    period

$
48,616


$
47,229


$
35,660Supplemental disclosure of cash
    flow information:Cash paid for income taxes

$
(1,415
)

$
(1,088
)

$
(451
)Non-cash investing and
    financing activities:Conversion of exchangeable shares

$
17,576


$



$
Value of bonus shares issued to
    employees

$
2,658


$
3,180


$
1,731Value of shares issued in
    connection with acquisition of CAM Systems (Note 5)

$



$
13,050


$
    F-7




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2006
  Note 1.
    Ownership
    and Business of OpenTV      Subsequent Events
    Note 2.
    Basis of
    Presentation        Note 3.
    Summary
    of Significant Accounting Policies  Cash
    and Cash Equivalents
   F-8




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Marketable
    Debt Securities
    available-for-sale Accounting for Certain Investments
    in Debt and Equity Securities.
  other-than-temporary other-than-temporary
  Fair
    Value of Financial Instruments
    Concentration
    of Credit Risk
    Property
    and Equipment
      Goodwill
    and Intangible Assets
  Goodwill and
    Other Intangible Assets,
 F-9




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accounting for the Impairment or Disposal of Long-Lived
    Assets
    Long-Lived
    Assets
    Revenue
    Recognition
    Royalties and licenses. 97-2 (SOP 97-2), SOP 97-2 SOP 97-2,
  Services and other. SOP 81-1.
  Revenue
    Recognition
 F-10




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SOP No. 98-9, Modification of
    SOP No. 97-2
    with Respect to Certain Transactions.
  99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent.
  pay-per-play
        Other
    Revenue Accounting Policies
      No. 01-09, Accounting for Consideration Given by a Vendor to a
    Customer or Reseller of the Vendors Products 01-09). EITF 01-09,
 F-11




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Deferred
    Revenue and Contract Costs
  SOP 81-1.
  Research
    and Development
  Accounting for the Costs of
    Computer Software to be Sold, Leased or Otherwise
    Marketed.
  Advertising
    401(k)
    Plan
    Employee
    Bonus
     F-12




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Operating
    Leases
  lease-by-lease
  Income
    Taxes
    Share-Based
    Compensation
  Share-Based Payment, Accounting for Stock
    Issued to Employees,
  Share-based Compensation Plans
  Accounting for
    Share-based Compensation  Transition and
    Disclosure,
 F-13




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comprehensive
    Income (loss)
  Reporting
    Comprehensive Income.
  Foreign
    Currency Translation
    Recent
    Accounting Pronouncements
  Accounting for
    Uncertainty in Income Taxes Accounting
    for Income Taxes
    Fair Value Measures
  Considering the Effects
    of Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements
 F-14




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 4.  Net
    Loss Per Share
    2006


2005


2004Class A ordinary shares
    issuable upon exercise of stock options


10,493,807



10,035,530



8,415,387Class A ordinary shares
    issuable for shares of OpenTV, Inc. Class A common stock
    (including shares of OpenTV, Inc. Class A common stock
    issuable upon exercise of stock options)


655,542



746,628



755,428Class B ordinary shares
    issuable for shares of OpenTV, Inc. Class B common stock


84,387



7,594,796



7,594,796     Note 5.  Acquisitions
  BettingCorp
    Acquisition
      PurchasePriceTangible net assets acquired

$
124Intangible assets acquired:Developed technology


4,400Customer base


400Goodwill


6,467$
11,391      F-15




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Disposal of
    PlayMonteCarlo Channel Placement and Customer List.
  CAM
    Systems Acquisition
  EITF 97-15
    PurchasePriceTangible net assets acquired

$
341Intangible assets acquired:Developed technology


4,200Customer base


3,300Trademarks


300Goodwill


9,381$
17,522     end-to-end
 F-16




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 6.
    Balance
    Sheet Components (in thousands)  December 31,2006


2005Prepaid expenses and other
    current assets:Value added tax

$
808


$
522Federal income tax refund






440Current deferred tax asset


274



298Deferred contract costs


650



236Other


4,067



3,142$
5,799


$
4,638Property and
    equipment:Computers and equipment

$
19,965


$
15,648Software


6,108



5,662Furniture and fixtures


2,242



1,924Leasehold improvements


2,526



2,18330,841



25,417Less accumulated depreciation and
    amortization


(23,610
)


(19,554
)$
7,231


$
5,863Other assets:Deposits

$
820


$
612Deferred contract costs


3,136



1,094Notes receivable






492Other


871



747$
4,827


$
2,945Accrued liabilities:Accrued payroll and related
    liabilities

$
8,565


$
8,192Accrued professional fees


1,229



2,011Accrued marketing


1,536



1,892Accrued income taxes


3,611



2,230Other


3,999



4,243$
18,940


$
18,568   Restructuring and Impairment Costs.
   F-17




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 7.
    Marketable
    Debt Securities    2006Purchase/


Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair ValueCorporate debt securities

$
1,695


$
1


$
(5
)

$
1,691Asset-backed securities


4,908



1



(2
)


4,907Money market securities


1,590











1,590U.S. government debt
    securities


493











493Total short-term marketable debt
    securities


8,686



2



(7
)


8,681Corporate debt securities


5,437







(56
)


5,381Asset-backed securities


553











553U.S. government debt
    securities


999







(5
)


994Certificates of deposit


1,000











1,000Total long-term marketable debt
    securities


7,989







(61
)


7,928Total marketable debt securities

$
16,675


$
2


$
(68
)

$
16,609   2005Purchase/


Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair ValueCorporate debt securities

$
4,588


$



$
(18
)

$
4,570Money market securities


493







(1
)


492U.S. government debt
    securities


4,000







(32
)


3,968Total short-term marketable debt
    securities


9,081







(51
)


9,030Corporate debt securities


5,769







(50
)


5,719U.S. government debt
    securities


496







(2
)


494Certificates of deposit


2,000











2,000Total long-term marketable debt
    securities


8,265







(52
)


8,213Total marketable debt securities

$
17,346


$



$
(103
)

$
17,243   Restructuring and
    Impairment Costs.
 F-18




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   03-01, The Meaning of
    Other-Than-Temporary
    Impairment and Its Application to Certain Investments, available-for-sale
  Less than 12 Months


12 Months or More


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


LossesCorporate debt securities

$
1,119


$
(4
)

$
5,133


$
(57
)

$
6,252


$
(61
)Asset-backed securities


1,127



(2
)










1,127



(2
)Money market securities


591















591



U.S. government debt
    securities


993



(1
)


494



(4
)


1,487



(5
)Total

$
3,830


$
(7
)

$
5,627


$
(61
)

$
9,457


$
(68
)     Note 8.  Goodwill
    2006


2005Middleware and integrated
    technologies

$
71,679


$
57,759Applications


23,904



20,090BettingCorp


3,062



2,275Total goodwill

$
98,645


$
80,124     2006


2005Beginning balance

$
80,124


$
70,466Conversion of OpenTV Inc. shares
    to OpenTV Corp. shares


17,576



26Acquisition of CAMS






9,381Reclassification of certain other
    assets and intangibles


1,692



251Impairment


(747
)


Ending balance

$
98,645


$
80,124      F-19




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     one-for-one
    Note 9.  Intangible
    Assets, Net
    December 31, 2006


December 31, 2005Useful


Gross





Net


NetLife in


Carrying


Accumulated


Carrying


CarryingYears


Amount


Amortization


Amount


AmountIntangible assets:Patents


5-13


$
18,402


$
(7,530
)

$
10,872


$
14,633Developed technologies


3-5



11,300



(7,197
)


4,103



6,933Contracts and relationships


5



9,800



(6,498
)


3,302



5,255Trademarks


4



300



(100
)


200



329Purchased technologies


5



400



(400
)






$
40,202


$
(21,725
)

$
18,477


$
27,150     AmortizationYear Ending December 31,

Expense2007

$
5,8662008


3,3152009


1,7922010


1,5212011


1,0812012


1,081Thereafter


3,821$
18,477  F-20




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10.  NASCAR
    Amendment
  Goodwill.
  Note 11.  Disposal
    of PlayMonteCarlo Channel Placement and Customer List
  90-day
  Note 12.  Restructuring
    and Impairment Costs
  Accounting for Costs Associated
    with Exit or Disposal Activities
    sub-lease
 F-21




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        EmployeeSeverance


Excess


Assetand Benefits


Facilities


Write-offs


TotalBalance, December 31, 2003

$
1,404


$
6,385


$



$
7,7892004 provision, net of reversals


(310
)


182



1,021



893Cash payments


(1,094
)


(5,173
)






(6,267
)Non-cash charges










(1,021
)


(1,021
)Balance, December 31, 2004






1,394







1,3942005 provision, net of reversals


383



1,860



302



2,545Cash payments


(170
)


(2,097
)






(2,267
)Transfer from accrued liabilities






561







561Non-cash charges










(302
)


(302
)Balance, December 31, 2005


213



1,718







1,9312006 provision, net of reversals


1,304



20







1,324Cash payments


(516
)


(369
)






(885
)Balance, December 31, 2006

$
1,001


$
1,369


$



$
2,370     Note 13.  Shareholders
    Equity
  Authorized
    share capital
  
    500,000,000 Class A ordinary shares
    200,000,000 Class B ordinary shares
    500,000,000 preference shares  none outstanding  Voting
   F-22




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Dividends
    and Other Distributions
  and/or
  Merger
    Conversion
    of Class B Ordinary Shares
  share-for-share
    Subsequent Events
  Exchangeable
    Share Arrangements
  one-for-one
   F-23




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Shares Reserved
    Issuable upon conversion of
    Class B ordinary shares


30,631,746Issuable upon exchange of shares
    (including 62,000 shares issuable upon exercise of
    outstanding options) of OpenTV, Inc. common stock under 2000
    Exchange Plan


687,566Stock options outstanding


9,618,385Stock options reserved for future
    grant under 2005 Option Plan


3,940,300Employee stock purchase plan


500,000Total


45,377,997   Agreements
    with General Instrument and Motorola
    Note 14.  Share-based
    Compensation Plans
  Employee
    Stock Purchase Plan
    Option
    Plans
       F-24




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             F-25




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Impact
    of the Adoption of SFAS 123(R)
  Accounting for Stock Appreciation Rights and Other
    Variable Stock Option or Award Plans (an Interpretation of APB
    Opinions No. 15 and 25).
    Year EndedDecember 31,2006Cost of revenues 
    services and other

$
554Research and development


650Sales and marketing


531General and administrative


1,589$
3,324     Valuation
    Assumptions
    Year Ended December 31,2006

2005

2004Risk-free interest rates

4.28% - 5.22%

3.71% - 4.57%

2.65% - 3.85%Average expected lives (months)

64

75

60Dividend yield





Expected volatility

78% - 85%

99% - 105%

106%  F-26




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Share-based
    Payment Award Activity
    SharesAvailable for


Number of




Weighted AverageGrant


Shares


Exercise Price

Exercise PriceBalance, December 31, 2003


7,626,228



9,073,456




$
6.81Options granted


(2,813,050
)


2,813,050


$2.16-$ 4.00

$
3.06Options exercised






(1,852,898
)

$0.33-$ 2.73

$
1.86Options cancelled


476,083



(1,556,221
)

$0.33-$54.25

$
8.09Shares issued to employees as bonus


(578,917
)


Shares issued as compensation


(52,280
)


Balance, December 31, 2004


4,658,064



8,477,387




$
6.41Options reserved at inception of
    2005 Plan


6,000,000



Options granted


(3,266,000
)


3,266,000


$2.09-$ 3.73

$
2.76Options exercised






(145,764
)

$0.33-$ 2.73

$
1.25Options cancelled


(220,464
)


(1,271,913
)

$1.05-$86.31

$
5.66Shares issued to employees as bonus


(1,162,180
)


Shares issued as compensation


(12,420
)


Balance, December 31, 2005


5,997,000



10,325,710




$
5.42Options granted


(2,239,150
)


2,239,150


$2.27-$ 4.00

$
2.94Options exercised






(1,214,519
)

$0.33-$ 2.99

$
2.01Options cancelled


182,450



(1,669,956
)

$1.63-$94.56

$
6.76Balance, December 31, 2006


3,940,300



9,680,385




$
5.04  F-27




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Outstanding


Options Currently ExercisableWeighted AverageNumber


Remaining


Weighted Average


Number


Weighted AverageExercise Price

Outstanding


Contractual Life


Exercise Price


Exercisable


Exercise Price$ 0.33-$ 2.21


1,052,818



4.71


$
1.46



742,375


$
1.29$ 2.27-$ 2.69


251,550



8.72


$
2.51



42,434


$
2.52$ 2.70-$ 2.70


1,352,080



8.13


$
2.70



674,711


$
2.70$ 2.72-$ 2.82


391,927



8.49


$
2.77



138,967


$
2.77$ 2.84-$ 2.84


1,985,500



8.93


$
2.84



334,843


$
2.84$ 2.85-$ 2.98


215,100



8.78


$
2.91



34,091


$
2.90$ 2.99-$ 2.99


2,117,525



7.26


$
2.99



946,172


$
2.99$ 3.00-$ 5.00


1,013,262



8.08


$
3.78



344,148


$
3.97$ 5.04-$33.19


1,119,963



3.71


$
14.22



1,112,463


$
14.28$40.08-$88.00


180,660



3.48


$
52.80



180,660


$
52.809,680,385



7.18


$
5.04



4,550,864


$
7.46                 Pro
    forma Information for Periods Prior to the Adoption of
    SFAS 123(R)
   F-28




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2005


2004Net loss, as reported

$
(8,473
)

$
(21,962
)Add: Share-based employee
    compensation expense included in reported net loss, net of
    realted tax effects


8



26Deduct: Share-based employee
    compensation expense determined under fair value-based method
    for all awards, net of related tax effects


(4,668
)


(2,934
)Pro-forma net loss

$
(13,133
)

$
(24,870
)Net loss per share, basic and
    diluted:As reported

$
(0.07
)

$
(0.18
)Pro-forma

$
(0.11
)

$
(0.21
)   Note 15.  Income
    Taxes
    Year Ended December 31,2006


2005


2004United States

$
(16,909
)

$
(8,387
)

$
(20,644
)International


8,481



990



(2,135
)$
(8,428
)

$
(7,397
)

$
(22,779
)   expense/(benefit)
  Year Ended December 31,2006


2005


2004CurrentUnited States

$



$



$
(611
)International


2,206



1,299



66State


159



75



(272
)2,365



1,374



(817
)DeferredInternational


25



(298
)


United States










25



(298
)


Expense/(benefit)

$
2,390


$
1,076


$
(817
)    F-29




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Year Ended December 31,2006


2005


2004Income tax/(benefit) at the
    federal statutory rate of 35%

$
(2,950
)

$
(2,589
)

$
(7,972
)Change in valuation allowance


9,082



6,863



10,471Foreign Tax Rate Differential


(4,726
)


(3,464
)


(1,129
)Adjustment Related to Prior Year
    Taxes






191



(2,264
)Stock Compensation


904







Other


80



75



77$
2,390


$
1,076


$
(817
)     Year Ended December 31,2006


2005Current deferred tax asset
    (liability), netDeferred revenue

$
9,979


$
8,755Accrued liabilities and reserves


3,668



2,793Other foreign


189



Foreign net operating loss


85



298Valuation allowance


(13,647
)


(11,548
)274



298Long-term deferred tax asset
    (liability), netFixed assets and intangibles basis
    differences


4,031



2,098Net operating loss carryforwards


136,104



129,190Credits


5,975



Other


2,062



Valuation allowance


(148,172
)


(131,288
)



Net deferred tax asset

$
274


$
298      F-30




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 16.  Commitments
    and Contingencies
  Operating
    Leases
      MinimumYear Ending December 31,

Commitments2007

$
5,2272008


4,9232009


4,0552010


9122011


365Thereafter


86$
15,568     Other
    Commitments
    Restructuring and Impairment Costs.
 F-31




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Contingencies
  OpenTV, Inc. v. Liberate Technologies,
    Inc.
      Initial Public Offering Securities
    Litigation. Brody v. OpenTV
    Corp., et al. In re
    OpenTV Corp. Initial Public Offering Securities Litigation. In re Initial Public Offering
 F-32




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Securities Litigation
  In re Wink Communications, Inc.
    Initial Public Offering Securities Litigation. In
    re Initial Public Offering Securities Litigation.
  Litigation Relating to the Acquisition of ACTV,
    Inc.
 F-33




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Broadcast Innovation Matter. and/or
  Personalized Media Communications, LLC.
 F-34




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
    Indemnification
      Note 17.  Related
    Party Transactions
  Subsequent Events
  Year Ended December 31,Related Party

Nature of Transaction

2006


2005


2004Shareholders:Liberty Media and affiliates

Management fee and other costs

$



$



$
(442
)Liberty Media

Employee benefits

$
(2,795
)

$
(2,039
)

$
(1,923
)Liberty Media affiliates

Revenues

$
22


$
10


$
52Sun Microsystems

Software technology license and
    equipment costs

$



$
480


$
(3,540
)      F-35




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Note 18.  Segment
    Information
  Disclosure
    about Segments of an Enterprise and Related
    Information.
       F-36




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Subsequent
    Events Form 10-K,
 F-37




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2006


2005


2004Revenues:Middleware and Integrated
    TechnologiesRoyalties and licenses

$
60,640


$
54,337


$
48,824Services and other


18,233



13,953



14,326Subtotal  Middleware
    and Integrated Technologies


78,873



68,290



63,150ApplicationsRoyalties and licenses


3,992



746



33Services and other


14,393



13,331



11,926Subtotal  Applications


18,385



14,077



11,959BettingCorpRoyalties and licenses


1,254







Services and other


3,396



5,013



2,060Subtotal  BettingCorp


4,650



5,013



2,060Total Revenue

$
101,908


$
87,380


$
77,169Contribution
    Margin/(Loss):Middleware and Integrated
    Technologies

$
28,333


$
28,927


$
26,321Applications


(1,409
)


(4,504
)


(6,810
)BettingCorp


(1,690
)


(4,900
)


(4,479
)Total Contribution Margin


25,234



19,523



15,032Unallocated corporate overhead


(21,351
)


(20,212
)


(29,039
)NASCAR amendment










4,600Restructuring and impairment costs


(1,324
)


(2,545
)


(893
)Depreciation and amortization


(3,286
)


(3,843
)


(5,941
)Amortization of intangible assets


(6,981
)


(5,758
)


(8,228
)Share-based and non-cash
    compensation


(3,445
)


(125
)


(157
)Interest income


3,027



1,678



858Other income


408



3,823



499Minority interest


37



62



490Impairment of goodwill


(747
)






Loss before income taxes


(8,428
)


(7,397
)


(22,779
)Income tax expense/(benefit)


2,390



1,076



(817
)Net loss

$
(10,818
)

$
(8,473
)

$
(21,962
)  F-38




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2006


%


2005


%


2004


%Europe, Africa and Middle EastUnited Kingdom

$
26,479



26
%

$
22,020



25
%

$
20,527



27
%Italy


6,108



6
%


10,452



12
%


13,751



18
%Other Countries


17,759



17
%


14,099



16
%


11,080



14
%Subtotal


50,346



49
%


46,571



53
%


45,358



59
%AmericasUnited States


26,151



26
%


23,839



28
%


18,220



23
%Other Countries


7,552



7
%


4,620



5
%


2,916



4
%Subtotal


33,703



33
%


28,459



33
%


21,136



27
%Asia Pacific


17,859



18
%


12,350



14
%


10,675



14
%$
101,908



100
%

$
87,380



100
%

$
77,169



100
%     Year Ended December 31,2006


2005


2004Echostar


13
%


17
%


15
%Thomson


12
%


5
%


3
%Sky Italia


6
%


12
%


18
%         Year EndedDecember 31,Capital Expenditures, Net:

2006


2005


2004United States

$
3,395


$
1,659


$
1,352Other countries


1,247



1,416



718$
4,642


$
3,075


$
2,070   December 31,Long-lived Assets:(*)

2006


2005United States

$
9,022


$
5,978Other countries


3,036



2,830$
12,058


$
8,808     (*)
    
    Long-lived assets include property and equipment, and other
    assets. F-39




---



##### Table of Contents



OPENTV
    CORP.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 19.
    Subsequent
    Events      Note 20.  Quarterly
    Consolidated Financial Data (Unaudited)
    2006 Quarter Ended

December 31


September 30


June 30


March 31Revenues

$
26,738


$
26,553


$
23,721


$
24,896Net loss

$
(3,416
)

$
(1,783
)

$
(2,492
)

$
(3,127
)Net loss per share, basic and
    diluted

$
(0.03
)

$
(0.01
)

$
(0.02
)

$
(0.02
)Shares used in per share
    calculation, basic and diluted


137,951,811



137,648,870



137,392,075



135,976,561   2005 Quarter Ended

December 31


September 30


June 30


March 31Revenues

$
24,199


$
19,478


$
20,874


$
22,829Net
    income/(loss)

$
2,904


$
(4,051
)

$
(4,042
)

$
(3,284
)Net
    income/(loss)
    per share basic

$
0.02


$
(0.03
)

$
(0.03
)

$
(0.03
)diluted

$
0.02


$
(0.03
)

$
(0.03
)

$
(0.03
)Shares used in per share
    calculation basic


128,659,079



124,751,421



123,337,922



122,501,915diluted


137,508,887



124,751,421



123,337,922



122,501,915    F-40




---



##### Table of Contents



OPENTV
    CORP.



SCHEDULE II



VALUATION
    AND QUALIFYING ACCOUNTS  For the Years Ended December 31, 2006, 2005 and 2004ChargedBalance at


(Credited) to


Write-offsBeginning


Operating


Net of


Balance at Endof Year


Expenses


Recoveries


of YearAllowance for Doubtful Accounts
    (in thousands):2006

$
305


$
82


$
(39
)

$
3482005


559



(142
)


(112
)


3052004


789



(187
)


(43
)


559  F-41