Can New Voom Zoom? - Broadcasting & Cable

Can New Voom Zoom?

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Cablevision Systems has begun beta-testing its Voom DBS system, which, with more than 39 HD channels, will easily be the largest HD offering to consumers. But the question is, how long will Voom have an advantage?

Dish Network already has capacity for 50 HD channels and will launch the industry's first HD DVR this month. Two weeks ago, News Corp. told the FCC that, if it completes its acquisition of DirecTV, it could offer up to 30 new channels of HDTV by the end of 2004.

"I'm not quite sure they're going to have too much of an advantage," says Terry Ferguson, DirecTV vice president, business development. In the first quarter, his company will launch DirecTV 7S, a satellite that will expand its local-into-local offerings and possibly have additional bandwidth for more HD channels. The company also stated that, as early as 2006 and no later than 2008, it will offer 200 to 300 channels of local and national HDTV programming.

Last week, industry consultant Mickey Alpert was named senior executive vice president and COO, reporting to Cablevision Chairman Charles Dolan. Also on board are Bill Casamo, executive vice president, marketing and sales, and Jay Aldrich, executive vice president, finance. Casamo formerly worked at DirecTV and Thomson Consumer Electronics; Aldrich worked with Alpert at Alpert & Associates and also was a senior executive with satellite program provider PrimeTime 24.

The challenge facing the Zoom team is huge. The launch will no doubt excite HDTV-set owners, but the estimated $750 cost of the Motorola set-top box, related hardware (such as an antenna for local HD reception) and installation may dampen enthusiasm. And many HD owners already subscribe to DirecTV or the Dish Network.

Cablevision, which has already spent $1 billion on Voom, also will need to convince analysts.

Morgan Stanley satellite analyst Ben Swineburne said that, if Voom is spun off the way Cablevision plans, the startup will have enough money for only two years' worth of operations. "There could be value here if you could build a subscriber base, but financing this beyond two years is a risk."

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