Voom goes Boom

Discussion in 'Playback Devices' started by Shane Martin, Jan 21, 2005.

  1. Shane Martin

    Shane Martin Producer

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    EchoStar Is Near Deal to Buy Voom From Cablevision

    By PETER GRANT and ANDY PASZTOR Staff Reporters of THE WALL STREET JOURNAL
    January 20, 2005 7:48 p.m.
    Cablevision Systems Corp. is close to announcing a deal to sell the assets of its money-losing Voom satellite service to EchoStar Communications Corp., which will shut down the service, according to people familiar with the matter.
    The deal amounts to a major defeat for Cablevision Chairman Charles Dolan, who has championed the service for more than 10 years. Mr. Dolan had indicated to Voom employees earlier this week that his family, which owns a controlling stake in Cablevision, might itself buy the service to keep it operating.
    The price of the deal wasn't immediately available. Analysts have estimated that Voom's single satellite, slots for the satellites to orbit and other equipment could fetch more than $250 million.
    The deal marks the climax of a family and financial drama that pitted Mr. Dolan against his son, James Dolan, Cablevision's chief executive, who sided with board members in opposing continued support of Voom. Cablevision's board earlier this week voted over Mr. Dolan's objections to shut down or sell the service.
    EchoStar, the country's second-largest satellite operator, has long been seen as the most logical buyer of Voom's assets. Voom's satellite and orbital slots would complement EchoStar's capacity and bandwidth plans. EchoStar Chairman Charles Ergen has been looking for additional satellites to add customers and provide more programming. "Charlie Ergen would be overlooking a huge opportunity" if he failed to take a serious look at Voom, said Jimmy Schaeffler, who runs a satellite-consulting firm near Carmel, Calif.
    EchoStar and Cablevision declined to comment. Cablevision is the nation's sixth-largest cable network.
    Voom began service in late 2003 but got off to a bad start, burning through $75.3 million in the third quarter of 2004. The service had only 26,000 subscribers at the end of that quarter. Crutchfield Corp., a large retailer of television and audio equipment, recently stopped selling Voom.
    Voom's plan was to offer more high-definition channels than other operators. This failed to attract demand, especially as competitors added more high-definition offerings. Voom also lacked many of the channels carried by other operators.
    Cablevision shares continued to rally yesterday on investor confidence that the company will soon stop funding Voom's deficits. In 4 p.m. composite trading on the New York Stock Exchange, shares were up $1.10, or 4.5%, at $25.48.cqCablevision, the nation's sixth-largest cable network, also owns Madison Square Garden, the New York Knicks basketball team and the New York Rangers hockey team.The decision to sell Voom marks the first time that James Dolan has publicly stood up to his father, who has continued to have an important role in running the company.
     
  2. Philip Hamm

    Philip Hamm Lead Actor

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    I know there are some big sattelite radio advocates here on HTF, but frankly I see VOOM as an indicator of where sattelite radio is headed.
     
  3. Kenneth Harden

    Kenneth Harden Screenwriter

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    Philip:

    I could not care less about Siruis and XM, but why do you say that?

    Both companies have a growing customer base, the actual content is cheap to run (basically, a jukebox on shuffle - they play music, they don't need to work hard to find it, let alone MAKE the music)

    VOOM is catering to a small, picky market and competing against two large companies who have a large customer base and a lot of money.
     
  4. Philip Hamm

    Philip Hamm Lead Actor

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    Small customer base. Too small to keep up with the content, which is not cheap to run really at all. There's RIAA licensing for all the songs they play, and they are both paying large contracts to sports leagues and expensive personalities.

    The bottom line is VOOM failed beacuse there were not enough people who cared enough about HD to pay for their service, which expanded too quickly. I think XM and Sirius are both going down that same road.
     
  5. David Judah

    David Judah Screenwriter

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    That's a bummer. I've had Voom for about 6 months and I really like it. I wonder if Echostar will have a trade-in program for Voom subscribers to switch over to Dish Network.
     
  6. Shane Martin

    Shane Martin Producer

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    David,
    As of right now, NO

    They did not buy the subsciber base. They only bought the bird (Rainbow 1). The 20-30k subscribers that were on Voom E* Could care less about. They are a drop in the bucket and know you will be calling them anyway unless you wish to go with Cable or D*.
     
  7. SimiA

    SimiA Second Unit

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    So Shane, does that mean the E* will not be adding any of Voom's HD programing to their lineup?
    Thanks ,Vb
     
  8. Shane Martin

    Shane Martin Producer

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    From what I've read YES correct

    They only bought the satellite and are closing down the service. It is up to Cablevision and Voom to decide what they will do with the content.
     
  9. Doug_B

    Doug_B Screenwriter

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    Hopefully sprinkle some of it onto Cablevision's cable service (although I'm not complaining about the HD content that Cablevision currently offers).

    Doug
     
  10. EricRWem

    EricRWem Screenwriter

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    This is huge news for E* if this is what's going to really happen. I would have expected D* to make a move like this first.

    Very interesting...
     
  11. kevitra

    kevitra Second Unit

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    Philip - Satellite radio is growing in popularity and both services are adding thousands of subs every month. "Small customer base"??? I don't think so. Combined they have around 5M subs. XM forcasts 5M subs for themselves by the end of '05. I don't consider that a "small customer base."

    I agree that they have both spent an obscene amount of money on certain content but if the subs keep coming in the end it will work out.
    XM is bringing in $32M/month right now (based on 3.2M subs). That is pretty good and their revenue continues to grow.
     
  12. Dave Moritz

    Dave Moritz Producer
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    While I personally was not interested in Voom because of it using Media Player 9. That is one of the buggiest versions of media player ever released. It sad that Voom did not last long. I feel it would be in Dish Networks best interest to carry some of Vooms programing. Thus expanding there HD content and maybe even getting more customers because of it. I have had DN it the past but am currently a DTV customer. It would be nice if Echostar offers Vooms customers a nice HD package after the dust has settled.
     
  13. Scott L

    Scott L Producer

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    It used the entire player or just the codec? Mpeg-4 or VC-9 is what ATSC should be... too bad we'll be using bandwidth-hungry mpeg-2 for a while.
     
  14. Dave Moritz

    Dave Moritz Producer
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    I was under the impression that it used the player since Vooms web site only mensions Media Player 9. If anyone else has any acurate info on wheather its the player or codex please let me know. But needless to say I dont trust Microsofts media player and I am not to crazy about there codex. There so called hd file on dvd like Terminator 2 that is supposed to be the hd version of the movie. The quality is on the poor side and I would not support that format for any reason. The only so called demo of Voom I saw was last year at there both at CES and they where displaying a number of channels on small monitors. So I have no idea how well the image looked on a 60" rear projection set or even a 110" projection screen set up?
     
  15. EricRWem

    EricRWem Screenwriter

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    I would think that E* would very much want to carry as much of Voom's HD programming as possible. That's a free, easy, HD boost for them. Considering this move, it would be senseless ot me, imho, to not capitalize on that ASAP.
     
  16. Shane Martin

    Shane Martin Producer

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    Not free obviously. They need to buy it from Voom/Cablevision.
     
  17. JohnGoggan

    JohnGoggan Stunt Coordinator

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    I'm surprised that there has been no new VOOM discussion in over a month with so much going on. I was assuming that there would be a lot of VOOM subscribers that would frequent this site -- is that not the case? Any current VOOM subscribers out there? Are you worried or thinking something will be worked out?

    My VOOM install is scheduled for Thursday... [​IMG]

    - John...
     
  18. Vlad D

    Vlad D Screenwriter

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    As a current Voom subscriber since March 2004 I'm hoping it all gets worked out. If not, it's been a great ride!

    You can find a lot of discussion at the Voom Forum at SatelliteGuys. That is where I get all my Voom news updates. Link.
     

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