Voom Launches With Promises and Big Gaps

Cablevision DBS service still lacks many essential elements
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At the unveiling of HDTV DBS service Voom in New York last Wednesday, COO Mickey Alpert was interrupted by another Voom executive who ran up waving a contract from a cable network, telling him to sign it immediately. That sealed a deal for a network that Voom had just announced it would carry but hadn't quite locked down all the details.

That pretty much summed up Voom last week: lots of promise but not quite ready.

Cablevision Systems launched the service promising to deliver more HDTV programming than any other cable or DBS service. Voom says it will carry 39 HD channels. 21 of them home-grown services. By HD standards, that's a huge slate, given that cable operators are bragging about their commitment to carry five channels by year end and DBS rivals DirecTV and EchoStar carry only a handful. Voom plans to carry 88 standard-definition channels.

Motorola-manufactured receivers and installation will cost $749, more than DirecTV's and EchoStar's HD equipment. Sears is the sole retailer for now. Voom will carry no local broadcast signals. A separate digital broadcast antenna will be necessary to pick up local stations over the air, but they'll be integrated through the Voom receiver, showing up on their normal channel positions.

The venture is a passion of Cablevision Chairman Charles Dolan, who firmly believes that a DBS service based on HDTV can thrive. At first, he will target high-end consumers who have bought pricey HD sets but can get very little HD programming from broadcast, cable or DBS. He expects to grow as the installed base of sets grows from today's 2 million to perhaps 40 million by 2006.

But Dolan is encountering tremendous pessimism on Wall Street and even from executives inside his own company, who question the $1 billion price tag. About the most positive thing investors have to say is they're thankful Dolan has pledged to spin Voom off, sheltering Cablevision's stock from its financial burdens.

"We've seen that before," Dolan said, recalling the skepticism in the 1970s when he partnered with Time Inc. to build Manhattan Cable. "If it's new, you're going to have skeptics."

Voom is free until February, mostly because there are giant holes in the lineup. For example, there's no ESPN or HBO, in HD or otherwise. Voom doesn't even have a deal with HDNet, which has made high-def programming its reason for being.

As for standard-definition channels, Voom is missing most of the top 10 basic services, Disney Channel and TLC. There are no TBS, TNT, Lifetime and many, many other, smaller services.

Dolan, noting that Voom is just in its initial stages, is confident he will eventually secure all the programming he needs. Part of the problem is that some networks want to use Voom's need for content to leverage better deals on Cablevision's systems. But he contended that he's resisting: "We're negotiating for Voom and Voom only."

The bulk of the HD slate is 21 home-grown channels carried in 1080i. Almost half of them are HD Cinema 10, which will feature one older movie each day shown over and over. The other 11 are channels for music videos, extreme sports, short-form animation, and news.

Josh Sapan, president of Cablevision's Rainbow Programming division, said the channels were crafted with an eye "on what could be enhanced and made spectacular by HD." Hence, one channel is called Epics, emphasizing lush movies. Another is Gallery, which focuses on paintings at art museums.

If you believe Dolan and Alpert, they don't have a business plan for Voom. How many subscribers do they expect to sign up next year? How many do they need to make the company viable? What's the budget for the original programming?

They don't say "no comment." Both respond that they don't know.

"Since 1980, I've done any number of business plans," said Alpert, who led satellite giant Comsat's attempt to start a DBS service 25 years ago and has been a satellite consultant since 1986. "Over the next three or four months, we'll have a much better idea as to where the market is going, how attractive our service is and what changes we have to make."

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