Rainbow Spin-off is dead

[Bruce]

This is exactly the issue, isn't it? Can Voom survive as a luxury service with a few deep-pocketed subscribers? Or must it attract everybody to make a go of it?

I tend to side with the Ferrari luxury service model. They might not need that many subscribers, perhaps 2% of the total market (just guessing), to thrive as a high-end service.

I have sold a lots of High-End Mattresses and Furniture to the "Ferrari luxury service model" and every time I have to go along on a Delivery ( which is a lot since its hard to hire and get new help) and I always pay attention to their Home Theaters, and it is always the same, HD set, SD Box, always hooked up to D* ( never E*) , I sometimes ask why D* and it is always the same answer- Sunday Ticket, I sometimes ask why not any HD and they just don't seem to care.

 

[Ilya]

they just don't seem to care...

they don't care yet...
But this may change very quickly. When the neighbor will have 39 (or 70+) HD channels and will show them the difference, they may start thinking about it... People buy expensive mattresses to have a more comfortable sleep. But people buy Ferraris for a different reason: because someone has it and they don't!

 

[stevesmall]

This is exactly the issue, isn't it? Can Voom survive as a luxury service with a few deep-pocketed subscribers? Or must it attract everybody to make a go of it?

I tend to side with the Ferrari luxury service model. They might not need that many subscribers, perhaps 2% of the total market (just guessing), to thrive as a high-end service.

2 % of the market now might be ok but in the long run 2% of Saturation is way too small a number to justify the outlay of cash they need to compete with cable, directv and echostar. All of the other providers will eventually catch up to VOOM especially if voom sits at 2 %. At that number voom would run out of money because as we all see by the filings of last week the Dolans were pretty much told by their board of directors to close the pockets. If Voom wanted to be just an add on service they wouldnt have bothered with all of the sd they offer and are still adding. (HGTV, DIY, Food etc) You are right that we the early adopters would buy this service but Voom has no chance of surviving with a 2 % share. they obviously know they must offer sd so thats the direction they need to go in for now. In fact some people just wont buy the service simpply because it would be a second dish, others because it adds 50 bucks at minimum to their overall cable/sat bill. Voom needs to add a couple of million customers to be a contender, all of the other providers will catch up in no time, Voom has not been dependable enough in delivering the service to push the other providers so they will do it at their pace. A slow pace but eventually they will catch up, my guess is 2 years, not fast enough for all of us early adopters but certaily fast enough for all of the other directv, echostar, cable sd viewers. We are vastly outnumbered by SD viewers so we are not setting the pace the sd viewer is. it is all about simple economics, the more subscribers the more money you make. 2% is not nearly enough. VOOM is no ferrari, a ferrari is marketed to the rich, sold for an astronomical price simply to set it apart from the rest. Voom would much rather be a dodge, dependable and every person could afford it.

 

[stevesmall]

they don't care yet...
But this may change very quickly. When the neighbor will have 39 (or 70+) HD channels and will show them the difference, they may start thinking about it... People buy expensive mattresses to have a more comfortable sleep. But people buy Ferraris for a different reason: because someone has it and they don't!

i dont think this is something that will change quickly especially with the need for an antenna, Is Voom going to offer locals ? if not they have just closed the door on a large part of the market. Most people dont care about HD, we all do here but thats probably the reason we found this forum, the antenna issue is a major factor to a lot of people, the ability to offer locals and also as of now Voom is a luxury to alot of people. most of us have voom plus at least another provider. when voom starts taking customers away from the other providers at a serious clip then and only then will directv, cable, dish crank up their hd offerings, Directv and cable have already taken steps to compete on an hd level. Voom does have more HD but Voom eliminates a large portion of the sat market simply by not offering locals, directv and dish only became major players after offering locals. Voom is not about locals and i am ok with that but im always at the front of the line for new technology, most people want the other guy to try it out first, we are the people that try things out for others. Voom will never compete with Directv, Voom is a great concept, had directv, dish had the idea it would have been a huge success. The way it has been handled so far it can not be compared to a ferrari more like a ford pinto, if you hit it in the ass it will explode.

 

[bbrukx]

A couple of observations; the reason Rainbow signed the contract with Lockheed is that they have to meet certain milestones under FCC regulations or they lose the licenses to broadcast. The relatively low contract 'out' ($100M, just enough to keep the VOOM business attractive for a possible acquirer and to keep lockheed happy), should be a warning sign that a sale of VOOM has been in the back of their minds all along.

Secondly, you really can't compare satellite broadcast service to a luxury car or anything like it. The upfront cost of DBS are astronomical, the cost of adding an additional customer marginal (definitely relative to the upfront costs). Economies of scale (number of subscribers) are everything. Since there are already two established, mature providers (D* and E*), there is no way VOOM can gain the subscribers at an acceptable rate. Don't forget, they lost $75M in Q3, that is almost $3,000 per subsciber in one quarter!

Last but not least, as soon as the demand for HDTV services reaches critical mass (starting now, definitely next holiday season), D* and E* will jump into it massively with deep pockets plus large subscribers bases. D* has already announced so.

As much as I would like to see a third, quality DBS provider, it's just too late in the game. I think the days of VOOM are numbered. The only question remaining is whether Charlie will buy the VOOM business as a whole, or let it die and try to pick it up the pieces on the backside (buy the returned licenses from the FCC, the satellite construction capacity from Lockheed etc.). That will be his gamble....

Just my 2c....

 

[techweb]

This is exactly the issue, isn't it? Can Voom survive as a luxury service with a few deep-pocketed subscribers? Or must it attract everybody to make a go of it?

I tend to side with the Ferrari luxury service model. They might not need that many subscribers, perhaps 2% of the total market (just guessing), to thrive as a high-end service.

As a subscriber since day one, I'd really like like to see Voom survive and prosper, but unfortunately I don't see it happening with all the competition out there. For that reason, I'm hedging my bets and also subscribing to local cable service until I see how things work out, mainly for the HD DVR. Unlike D* (and even Voom), my cable is allocating full 19.4MBps bandwidth for each HD channel, and the PQ is generally among the best I've seen (aside from Wealth TV, which is mostly upconverts).

 

[voomster2]

For that reason, I'm hedging my bets and also subscribing to local cable service until I see how things work out, mainly for the HD DVR.

We sure are seeing lots of folks lately either ditching VOOM for their cable dual tuner HD DVRs or if you are real rich then keeping VOOM but also subscribing to cable for the same reason.

Is VOOM just dead set on being the last ones to offer this seemingly now not so technologically advance equipment. Their version better be a killer version.

 

[riffjim4069]

We sure are seeing lots of folks lately either ditching VOOM for their cable dual tuner HD DVRs or if you are real rich then keeping VOOM but also subscribing to cable for the same reason.

Is VOOM just dead set on being the last ones to offer this seemingly now not so technologically advance equipment. Their version better be a killer version.

VOOM, nor DBS for that fact, is for everyone. Cable and their HD DVR's are kicking ass and taking taking names right now. However, Adelphia is still Adelphia, Cox is still Cox, and Comcast is still Comcast...you can polish a turd, but it is still be a turd nonetheless.

Cable HD packages are, in fact, substantially better than those being offered by D* or E*. But they are not even in the same league to the HD programming being offered by VOOM, and I would hardly consider the Scientific Atlanta or Motorola HD DVR as being technologically advanced - they are not! They are basic recording devices which have just as many problems as the VOOM STB and infamous the E* 921.

I'm just hoping the DVR will be here in March and its Whole Home Networking features fully enabled June. We shall see...

 

[slick1ru2]

You're right about the HD quantity of Voom, but I have fallen in love with Comcast's Video on Demand. I would have never seen Huff on Showtime if I hadn't dropped Voom for Comcast. I have also had D* and E* as well as V* and its not all about the quantity of HD, its also about the ability to see what you want when you can be it HD or SD and Comcast's VOD and HD DVR might be a turd, but in comparison, Voom is a fart, all smell, no substance.

BTW, I have not had any problems with my Motorola 6412. In contrast, I did have to swap out my Voom due to it being defective.

 

[calikarim]

Last but not least, as soon as the demand for HDTV services reaches critical mass (starting now, definitely next holiday season), D* and E* will jump into it massively with deep pockets plus large subscribers bases. D* has already announced so.

As much as I would like to see a third, quality DBS provider, it's just too late in the game. I think the days of VOOM are numbered. The only question remaining is whether Charlie will buy the VOOM business as a whole, or let it die and try to pick it up the pieces on the backside (buy the returned licenses from the FCC, the satellite construction capacity from Lockheed etc.). That will be his gamble....

Just my 2c....[/QUOTE]
Quote of bbrukx

This is a quote from earlier post, but he is wrong. D* and E* have 20 million subscribers. There are 250 million people in the US almost 90 million homes that will be the potential market in a couple of years, as HD sets become more prevelant. That means 70 million more potential open minded customers. When Google started in a garage, everyone said "How can they compete with Yahoo", they have 10's of millions of followers, Google is a startup. Yet today Google surpasses Yahoo in the number of hits everday, and the founders from $15,000 have amassed a fortune of $6 billion and have blown Yahoo away.

Starbucks too, similar story when they started. America is founded on entrepreneurship, and all it takes is a great idea and today Giants are yesterday dinasaurs. IBM was the only game in town, when Bill Gates a programmer for IBM came out with Windows, the rest in history, Microsoft is the leader and is on every desttop in the World. But if you tell GAtes, oh it is too late in the game, the game is set, you have a great idea but you are too small and have 26, 000 subscribers how will you compete with IBM, he would never have made it

Economics 101 guys, this is what capitalism is all about. You build a better mousetrap and they will rush to you. No matter not capital, ideas are capital. Good ideas attract capital. Voom would maybe cost $250 million , a drop in the bucket for so many billionaires and other multi national corporations.

Guys voom is not dead, i will bet anyone that voom will survive, and shut all you nathsayers up. HD is in its infancy, the game is just beginning. Dolan founded HBO, he is beyond the mind of all of us out here, these guys are in differnet league than us.

 

[1080iBeVuMin]

...Dolan founded HBO, he is beyond the mind of all of us out here, these guys are in differnet league than us.

Best point I have seen all day.

 

[stevesmall]

Last but not least, as soon as the demand for HDTV services reaches critical mass (starting now, definitely next holiday season), D* and E* will jump into it massively with deep pockets plus large subscribers bases. D* has already announced so.

As much as I would like to see a third, quality DBS provider, it's just too late in the game. I think the days of VOOM are numbered. The only question remaining is whether Charlie will buy the VOOM business as a whole, or let it die and try to pick it up the pieces on the backside (buy the returned licenses from the FCC, the satellite construction capacity from Lockheed etc.). That will be his gamble....

Just my 2c....

Quote of bbrukx

This is a quote from earlier post, but he is wrong. D* and E* have 20 million subscribers. There are 250 million people in the US almost 90 million homes that will be the potential market in a couple of years, as HD sets become more prevelant. That means 70 million more potential open minded customers. When Google started in a garage, everyone said "How can they compete with Yahoo", they have 10's of millions of followers, Google is a startup. Yet today Google surpasses Yahoo in the number of hits everday, and the founders from $15,000 have amassed a fortune of $6 billion and have blown Yahoo away.

Starbucks too, similar story when they started. America is founded on entrepreneurship, and all it takes is a great idea and today Giants are yesterday dinasaurs. IBM was the only game in town, when Bill Gates a programmer for IBM came out with Windows, the rest in history, Microsoft is the leader and is on every desttop in the World. But if you tell GAtes, oh it is too late in the game, the game is set, you have a great idea but you are too small and have 26, 000 subscribers how will you compete with IBM, he would never have made it

Economics 101 guys, this is what capitalism is all about. You build a better mousetrap and they will rush to you. No matter not capital, ideas are capital. Good ideas attract capital. Voom would maybe cost $250 million , a drop in the bucket for so many billionaires and other multi national corporations.

Guys voom is not dead, i will bet anyone that voom will survive, and shut all you nathsayers up. HD is in its infancy, the game is just beginning. Dolan founded HBO, he is beyond the mind of all of us out here, these guys are in differnet league than us.[/QUOTE]

agree that America is all about entrepreneurship but most of the 90 million homes will stay with their current provider, computers were relatively new to the consumer when gates jumped in and we all know Voom has given the opportunity for more hd but has failed to deliver in almost every way across the board to way too many people, BAD SERVICE, OTA Antenna ISSUES, BILLING ISSUES, BAD CSR TRAINING, yes i know all of the other providers have issues but not at the % that voom has. Voom has not made a better mousetrap,

 

[stevesmall]

Quote by Calikarim:
Economics 101 guys, this is what capitalism is all about. You build a better mousetrap and they will rush to you. No matter not capital, ideas are capital. Good ideas attract capital. Voom would maybe cost $250 million , a drop in the bucket for so many billionaires and other multi national corporations.

Guys voom is not dead, i will bet anyone that voom will survive, and shut all you nathsayers up. HD is in its infancy, the game is just beginning. Dolan founded HBO, he is beyond the mind of all of us out here, these guys are in differnet league than us.
Reply With Quote


While i agree with the above quote on America being built on entrepreneurship there is one fault here VOOM has not built the better mousetrap, it is a great moneypit though, Voom has pissed off almost as many customers as the have attracted, the churn rate by some reports is as high as 50 percent, (don't know the real numbers) Voom has if anything taught any new sat provider a valuable lesson , WHAT NOT TO DO 101, they have had so many issues, billing , installs, csr training, with way too many customers.Voom doesn't provide locals so in effect most of the subscriber base is not the least bit interested. And yes i know you can put up an antenna, i have one but most people don't want that "old technology" on their house. MOst consumers don't know any better, The sat industry already has an issue with people not wanting the dish when cable is unseen, that didn't bother us the early adopters but sat only gained really large numbers when they could provide locals. Voom has to provide a highly superior product and so far they have not done so. The pic q is great on hd when it works, but sd is just so so as it is on every provider, and if they didn't offer the sd Voom would only have 15 thousand subscribers. While i agree Voom is not dead, they are certainly bleeding and i hope someone comes to their rescue. But Voom as it stands now has no real edge based on subscriber numbers so they need to improve performance or subscribers will be leaving at an enormous rate. Directv and Echostar are not in the least worried about Voom, numbers are reality and voom has too small a number to even be a blurb on the sat screen. I hope Voom improves but again too many of us have been without voom for days at a time, and yesterday just about all of us lost half of the exclusives VOOM has, are they even up and running yet ? Voom has only been installed at the HD/early adopters home for the most part, the have no numbers in everyday joe;s house so we the early adopters or whatever you want to call yourself are so few in numbers if we all went and subscribed to voom they would have a fighting chance but again Voom has pissed off by all accounts at least a large % of us. Voom needs to get it together really fast, Directv will surpass them in a slow manner but at least do it right, they already have network hd so that opened the door for a few hundred thousand more subscribers in itself. as for the comparison to bill gates and ibm,bill gates sold them software that didn't even work yet, ibm was business based and bill gates knew just as apple that the reg consumer was the way to go. everything bill gates did after selling dos to ibm was consumer based. so it was an untapped market. SATellite is not untapped by any stretch of the imagination

 

[DarrellP]

Just look at Mark Cuban, he started HDNET not too long after Paul Allen launched his HD network and which one is around and thriving today? It takes more than deep pockets to make something work and Cuban has the right formula, hopefully the Dolan's will kick in their magic and make Voom thrive.

 

[mike123abc]

Deep pockets get to be deep pockets by recognizing a good deal and cutting losses on bad deals. VOOM's current future is unknown at best... If CVC excutives still believe in VOOM they will keep it, if they think it is not going to work they will try to salvage as much money from VOOM as possible. We can just sit back and try to guess what they are going to do like all the analysts that are certain that VOOM is going to be sold ASAP.

 

[gutter]

VOOM with all the new marketing activity and re-branding of channels certainly does not act like a company that is about to go under or be sold quickly.

 

[Lucky]

VOOM with all the new marketing activity and re-branding of channels certainly does not act like a company that is about to go under or be sold quickly.

My feeling on that is that the people who are in charge of programming and technology, etc. just keep doing their jobs as though the business will continue. I do not think they are told by executives if the company is about to go under. When the executives up top make the decision to pull the plug these programmers will probably find out the same day we do. I really wouldn't put much stock or hope in the longevity of VOOM just because they change or add programming.

 

[gutter]

Lucky...

I think you got it all wrong. VOOM, as a product, is very public. Millions are still being spent on TV ads etc that could easily have been pulled. I guess you can read it as the glass half empty or half full. I prefer the half full. I have had much experiences with companies going under and VOOM is not acting at all in the classic pattern of a company that is going to go bye bye soon. Employee's read the same trades and know what is going on. They are not just waiting to get a pink slip. This is diffferent.

Now I will admitt that current actions could be prelude to a sale or a merger with another entity. VOOM is positioning and that is a stategic move. A few months ago, I would have agreed that it was going under with no new announcements, poor customer service etc. However, if you look thru these threads, you can see that changes are taking place. The numbers in HDTV sales are moving in their direction. I ran into two people yesterday at a supermarket who have HDTV and DIRECT. they wanted VOOM but VOOM they said didn't have several of the channels that their family could not live without, HGTV and Food. I told them that was corrected earlier this month. They said that was all they needed to know to make the switch today. When the figures come out about the $1 deal, I believe that VOOM will be closer to the track they wanted a year ago at this time.

 

[Lucky]

Lucky...

I think you got it all wrong. VOOM, as a product, is very public. Millions are still being spent on TV ads etc that could easily have been pulled. I guess you can read it as the glass half empty or half full. I prefer the half full. I have had much experiences with companies going under and VOOM is not acting at all in the classic pattern of a company that is going to go bye bye soon. Employee's read the same trades and know what is going on. They are not just waiting to get a pink slip. This is diffferent.

Now I will admitt that current actions could be prelude to a sale or a merger with another entity. VOOM is positioning and that is a stategic move. A few months ago, I would have agreed that it was going under with no new announcements, poor customer service etc. However, if you look thru these threads, you can see that changes are taking place. The numbers in HDTV sales are moving in their direction. I ran into two people yesterday at a supermarket who have HDTV and DIRECT. they wanted VOOM but VOOM they said didn't have several of the channels that their family could not live without, HGTV and Food. I told them that was corrected earlier this month. They said that was all they needed to know to make the switch today. When the figures come out about the $1 deal, I believe that VOOM will be closer to the track they wanted a year ago at this time.

You don't understand how Cablevision is run. They are run with an iron hand by the Dolans. The employees (even their own high executives) have no idea what their big plans are. The people below the Dolans will keep doing their job until they are told to stop doing it. They know nothing like we do until the Dolans tell them otherwise.

 

[gutter]

They also read. And Lucky, you are right. The Dolans rule. So why would they tell them to spend more money by doing new development, signing new contracts that if they cancel they have a $40 million dollar penalty. The Dolan's are not dumb. They may March to a different drummer. I do remember the days that everyone was saying that HBO will never work. It was tried before and it failed. HBO will be the death of cablevision. Old man Dolan ignored them all and kept to his plan. Changing it here and there but stuck to his ideal. This time all the stats are in their favor if they can hold out. Or they are putting more in because they have found a new sugar daddy. But It is not going under and the tech employee's know that as well the executives. Because they are ruled with the firm hand as you suggested, Luck. They know to keep their mouths shut or they WBG (Will Be Gone)