big_buck said:
i'm an institutional investor currently researching rainbow media. gator's question regarding the viability of voom is the largest issue in the CVC/rainbow story. on page 103 of the form 10 you'll find detail on the company's liquidity situation.
currently rainbow is projecting that it will need $482m to fund voom in 2004. CVC is contributing $237m to rainbow while the remainder will have to be funded through debt. rainbow currently has access to $250m in debt financing from a bank so the company should be operational for at least a year.
what i'm now trying to figure out is if VOOM is able to gather enough subs to justify continuing operating before DirecTV's and EchoStar's HD content catches up. as early adopters of voom technology your opinions on this subject would be extremely helpful and appreciated. thanks in advance for your help.
- big buck
i'm curious
Gaining subs will be an uphill battle if Voom cannot get themselves into Best Buy, Ultimate Electronics, and other major retailers. They are in Sears, so they need to play that up for all they can - but it's just not the same.
Secondly, if they continue to slant their marketing to HD, then they will hurt in the short-term as the public ramps up slowly to HD and they won't make it to the long-term. They need subs and they need them soon - so I think they need to somehow start appealing to current SD customers who think/know they will go to HD in the next 2 years. In other words, they need to be able to lure some SD customers away from the other sat providers - and they can't afford to wait for HD to be the driving force. If they can get people moving now - they are more likely to stick with Voom. Later - when the competition is getting more HD - people will just stick with what they have.
Having said that - I don't know how they can lure SD customers since they have fewer channels, more technical problems, and spotty install performance. They bet everything on HD, but the move to HD is moving too slow. Perhaps thay can fuel a faster move to HD with an advertising campaign that says "the time for HD is now - with Voom" or "don't wait any longer for HD - it's here now with Voom". The big catch there is that HD monitor prices are still so high...