Voom’s Doom?

Om pointed to a piece in the WSJ (sub required) today on the the possibility of Voom no being spun off from Cablevision, but sold instead… the likely buyer is Echostar so they could add both HD and capacity to their Satellite Service.

Voom has certainly had their issues – customer churn, high operating costs and huge losses (~$75 Million last quarter) but I still really like what they are all about which is more HD than anyone else. I’d love to see the cable guys offer as large an array of HD options – my last count had Time Warner at slightly less than half of what Voom currently offers, not too mention what they are/(now were?) going to be offering.

Om feels they were about 24 months too early and that may be, though with all the hoopla about HD in the regular press you’d think most people had it. Obviously most people don’t have it and are even opting for non-HD large and flat sets to save money.

Voom has tried to distinguish itself by offering more high-definition channels than cable companies and other satellite operators. But its appeal has been limited by high installation costs, technical problems and the steady addition by competitors of more high-definition offerings. In the third quarter, Cablevision reported that Voom had 26,000 subscribers, compared with millions for DirecTV and EchoStar.

If Cablevision decides to sell the unit, analysts believe a likely buyer would be EchoStar, the second-largest satellite operator that operates Dish Network and needs additional capacity to offer more high-definition channels.

Nevertheless, analysts believe that Charlie Ergen, EchoStar’s chief executive, would have an advantage in negotiations with Cablevision since the cable operator would likely have few other buyers for Voom’s satellite, launched in 2003. Thomas Eagan, an analyst with Oppenheimer & Co. estimates that Mr. Ergen might pay as little as $125 million, about half what it would cost to build and launch a new satellite. [WSJ]

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