Another new SEC filing (CVC 8-k): Closing of Rainbow DBS business has been delayed!

[graphiteRT]

And another way of looking at this:
"Unfortunatley they haven't done any of these things to light the fire and lift off...be it CVC or Voom. Hopefully if Dolan Sr. gets to do it again he will see to it that all of tiers needed to succeed are in place!"

Actually, based on the numbers, I think they did quite a bit to light the fire and lift off. They almost doubled their sub number in 2mos.

Maybe that's exactly the problem. Think about what happens when someone signs up for VOOM right now.

They get a free install of 3 rooms. What's the total cost for 3 boxes, plus shipping, plus an OTA antenaa, plus paying the installer to come out and do the install. Lets say for the sake of argument that this is a $2000.00 cost to CABLEVISION (<---major point )

They also get 2 mos of VaVa for free, so that makes the payback period even longer.

So you're CABLEVISION, and you see subscriber numbers going through the roof. You anticipate that you're going to have 30,000 more people sign up in the next month, while the lawyers are screwing around with this deal. This is costing you a LOT of money, every time the phone rings, because you're selling this business unit.
Dolan Sr. sort of has you over a barrell here, because he can say "Hey...I'm not taking all that debt...that's YOUR problem", and what's your alternative? To not sell to him, and then eat the WHOLE enchilada. Dolan Sr. is absolutely in the driver's seat here, because there aren't any other buyers in town, at least that we're aware of.

And if you're him, why pay more? You have 46,000 people sitting out there with boxes already delivered to their houses, along with dishes, antennas...the whole 9 yards. Let it all go dark, don't pay ANYTHING to CVC, and then start a new company next month that uses the existing hardware that is of no use to anyone else anyway

You've gotta luv Chuck.

Lob

Dual tuner DVRs cost in the neighborhood of $400 ea. You're talking about a simple single tuner HD box, so much less. Installer contracts are ~$200 per as I recall, so the total is probably less than half your suggested figure.

 

[truqui]

And another way of looking at this:
"Unfortunatley they haven't done any of these things to light the fire and lift off...be it CVC or Voom. Hopefully if Dolan Sr. gets to do it again he will see to it that all of tiers needed to succeed are in place!"

Actually, based on the numbers, I think they did quite a bit to light the fire and lift off. They almost doubled their sub number in 2mos.

Maybe that's exactly the problem. Think about what happens when someone signs up for VOOM right now.

They get a free install of 3 rooms. What's the total cost for 3 boxes, plus shipping, plus an OTA antenaa, plus paying the installer to come out and do the install. Lets say for the sake of argument that this is a $2000.00 cost to CABLEVISION (<---major point )

They also get 2 mos of VaVa for free, so that makes the payback period even longer.

So you're CABLEVISION, and you see subscriber numbers going through the roof. You anticipate that you're going to have 30,000 more people sign up in the next month, while the lawyers are screwing around with this deal. This is costing you a LOT of money, every time the phone rings, because you're selling this business unit.
Dolan Sr. sort of has you over a barrell here, because he can say "Hey...I'm not taking all that debt...that's YOUR problem", and what's your alternative? To not sell to him, and then eat the WHOLE enchilada. Dolan Sr. is absolutely in the driver's seat here, because there aren't any other buyers in town, at least that we're aware of.

And if you're him, why pay more? You have 46,000 people sitting out there with boxes already delivered to their houses, along with dishes, antennas...the whole 9 yards. Let it all go dark, don't pay ANYTHING to CVC, and then start a new company next month that uses the existing hardware that is of no use to anyone else anyway

You've gotta luv Chuck.

Lob

Are you really implying that they are trying to get rid of Voom because they succeeded in getting more subs...???

Wow that's a first for me...!!! You can do any amount of things to help those issues but close it down???

Nope it's just not enough subs to make it work yet...IMO

 

[Juan]

If you shut it down, you get nothing for it. Plus you're on the hook for the shutdown costs, satellite contract cancelations, etc. If you sell it, at least you get something.

So how does that put more money in the CVC coffers?

tax write off!!!

 

[James Long]

The state of Voom certainly changes throughout the day ...

Whew!

JL

 

[sat4me]

Dual tuner DVRs cost in the neighborhood of $400 ea. You're talking about a simple single tuner HD box, so much less. Installer contracts are ~$200 per as I recall, so the total is probably less than half your suggested figure.

To help put some value to all this>>> The current value of a satellite subscriber on anyone of the satellite providers books is approximately $2300+ for each sub for the lifetime of that sub. So, book value of the possible 26k sub's VOOM has would be over $59 million.

Now, the hard cost of equipment and installation, not including marketing values, (because it's not know the marketing cost averages), of acquisition of a sub with just 1 STB, is about $650 per single unit sub, installed w/OTA, that still leaves a net value of $1650 per sub cost with out other marketing and service cost. There is plenty of "BOOK-VALUE" in VOOM to sell and not just give away.. this is all looking like a power-play by the Dolan's to separate VOOM from the CVC group.
Look at GM and the DTV split, made perfect sense to use GM $ power to fund the whole start-up an then the GM board didn't like the returns and how it was pulling on their primary stock value. So they spun it off and sold it.. HUMMM is this possible the Dolan's are looking at the same road?

 

[gutter]

CVC is going to be stuck with much of the debt in one form or fashion...just how much is the question.

DirectTV took over a billion dollar hits this past year as well. True more subs but it cost them to get the. A billion here and a billion there I guess doesn't mean anything more than a couple of dollars to us. Billion is still a lot money to loose be it *D or *V. I didn't hear anyone screaming for *D to get out of the satellite business.

 

[Juan]

DirectTV took over a billion dollar his this past year as well. True more subs but it cost them to get the. A billion here and a billion there I guess doesn't mean anything more than a couple of dollars to us. Billion is still a lot money to loose be it *D or *V. I didn't hear anyone screaming for *D to get out of the satellite business.

The difference is D* had 500,000 customers after a year..v* has a fraction of that

 

[graphiteRT]

tax write off!!!

Stock holders look for revenue, not creative bookkeeping.

So do we assume you were just shooting from the hip with the earlier comments?

 

[gutter]

I guess I am very old fashion. I visit the *D and *E forums to read what their subs have to say. I never have posted there because, in IMHO it would be wrong to insult or deride their service on their site. It is there choice. I choose *V because I didn't want less PQ than I was getting with my big bad bud. *V was the only service I would consider because PQ is most important to me. *D and *E didn't cut or and still don't. But I wouldn't post that on their site. I also don't like Ruppert M. There I said. On the *V forum. Now if any *V's want to challenge me for what I said, I will take that.

 

[Lobstah]

"Dual tuner DVRs cost in the neighborhood of $400 ea. You're talking about a simple single tuner HD box, so much less. Installer contracts are ~$200 per as I recall, so the total is probably less than half your suggested figure."

Nope...not buying it.
You have to buy the boxes. Oh...you have to PAY someone to buy the boxes, you have to PAY someone to ship the boxes, you have to PAY someone to take the order, you have to PAY for an order entry system, you have to PAY someone to manage the installer contracts, etc, etc, etc.
Material costs are only one component of the whole picture.

No way you can get a new sub up and running for $1K.

Lob

Lob

 

[LOBO2999]

I have D and I am not happy with the HD at all and I am going to drop it as soon as Voom is install Agin

 

[Lobstah]

And now this one

"Are you really implying that they are trying to get rid of Voom because they succeeded in getting more subs...???

Wow that's a first for me...!!! You can do any amount of things to help those issues but close it down???

Nope it's just not enough subs to make it work yet...IMO"

They have already decided, for whatever reason(s), that this business is not viable, meaning they can't make money at it. Doesn't mean nobody else can, just means THEY can't.

Once you make the decision that this business is going to be sold, every single action after that COSTS YOU MONEY.
It's not the new subs that put them out of business. They have made the decision that they simply can't make money at this, so they want out. They may have run the numbers and using their current model, they determined that it would take 1,5mil subs before they made a profit, and they don't think they can wait that long.

Lob

 

[screech]

and Stock holders look for ROI, not revenue.

 

[graphiteRT]

"Dual tuner DVRs cost in the neighborhood of $400 ea. You're talking about a simple single tuner HD box, so much less. Installer contracts are ~$200 per as I recall, so the total is probably less than half your suggested figure."

Nope...not buying it.
You have to buy the boxes. Oh...you have to PAY someone to buy the boxes, you have to PAY someone to ship the boxes, you have to PAY someone to take the order, you have to PAY for an order entry system, you have to PAY someone to manage the installer contracts, etc, etc, etc.
Material costs are only one component of the whole picture.

No way you can get a new sub up and running for $1K.

Lob

Lob

Admin support doesn't add $600 to the sub. The $200 install figure was taken from a post by an installer. He would know what he's getting paid.

You're still stuck on the $400 box price. I said it was much less. And let's not get hung up on the 3 unit install package either, because my guess is that's a small subset of the subs requesting 3 boxes. 2 is most likely the most requested number.

The numbers have been posted before, taken from E* and D* financials, and it was nowhere near the figure you're suggesting.

 

[truqui]

And now this one

"Are you really implying that they are trying to get rid of Voom because they succeeded in getting more subs...???

Wow that's a first for me...!!! You can do any amount of things to help those issues but close it down???

Nope it's just not enough subs to make it work yet...IMO"

They have already decided, for whatever reason(s), that this business is not viable, meaning they can't make money at it. Doesn't mean nobody else can, just means THEY can't.

Once you make the decision that this business is going to be sold, every single action after that COSTS YOU MONEY.
It's not the new subs that put them out of business. They have made the decision that they simply can't make money at this, so they want out. They may have run the numbers and using their current model, they determined that it would take 1,5mil subs before they made a profit, and they don't think they can wait that long.

Lob

I agree with what you're saying...once the decision to sell was made but, if I remember correctly, they put on the "big" promotional efforts after that, right? Why?
If this is the case (I'm not sure of the timeline) I don't get that idea! If it is to be sold and you want to streamline your P&L why rev up a promo that costs $$$ to get new subs which will get you into mor debt? Again, only if this was done after making the decision to sell...

 

[Lobstah]

Well...we could argue it back and forth for months, but if you back up to the 30,000' level, take the cost of the corporate overhead, which includes the programming, the uplink, the bird, etc... and spread that accross your current subscriber base, then you've got a pretty hefty number spread accross 50,000 subs.

But rather than do that, lets use your numbers, because I don't understand how that changes the point.
Every call you take, every install you do, every upgrade you perform is costing you money, period, and you're out of this business, so you have no chance on getting it back.
Would you at least agree that you're losing money on each and every install? I don't care if it costs $99 to get them online, if you're selling/going out of business in a month, you have no chance of ever making that $99 back.

Lob

 

[screech]

Amen!!!!!!!!

 

[graphiteRT]

Well...we could argue it back and forth for months, but if you back up to the 30,000' level, take the cost of the corporate overhead, which includes the programming, the uplink, the bird, etc... and spread that accross your current subscriber base, then you've got a pretty hefty number spread accross 50,000 subs.

But rather than do that, lets use your numbers, because I don't understand how that changes the point.
Every call you take, every install you do, every upgrade you perform is costing you money, period, and you're out of this business, so you have no chance on getting it back.
Would you at least agree that you're losing money on each and every install? I don't care if it costs $99 to get them online, if you're selling/going out of business in a month, you have no chance of ever making that $99 back.

Lob

Welcome to the world of startups. It costs real money to get in the game. The barrier to entry in DBS is quite high. The problem is very few of the CVC shareholders either understood that or were willing to wait for profitability. They've had 3 years to get off the ship, so let's not start shedding tears over market caps.

The losses divided by subscribers is out of context and serves no purpose except fuel for the naysayers. You want ridiculous financials? In the tech insanity of the late 90's one of my customers bought another company for $6.2 BILLION dollars. The amount of revenue added with this purchase....zero, zip, nada.....because they didn't have a shipping product. They bought intellecutal property for an assinine amount of money thinking for the future.

The point being if you're looking at the numbers purely for what it gets you today, don't bother. It'll never make sense.


EDIT: Beg your pardon, the sale was for $4.3 Billion(Siara Networks). Cisco bought a company for $6.2 B at about the same time and they got all of $10 million in revenue for the trouble.

 

[67Yv8t]

"Dual tuner DVRs cost in the neighborhood of $400 ea. You're talking about a simple single tuner HD box, so much less. Installer contracts are ~$200 per as I recall, so the total is probably less than half your suggested figure."

Nope...not buying it.
You have to buy the boxes. Oh...you have to PAY someone to buy the boxes, you have to PAY someone to ship the boxes, you have to PAY someone to take the order, you have to PAY for an order entry system, you have to PAY someone to manage the installer contracts, etc, etc, etc.
Material costs are only one component of the whole picture.

No way you can get a new sub up and running for $1K.

Lob

Lob

So the Dual tuner DVR from Fry's or best buy did not require the payroll of a purchasing agent, shipping department, cashier, cash register, and customer service managers? Not to mention, the StockRoom staff, janatorial, Rent on How many hundred stores, CAM charges in addition to the rent, and all the other costs that retail has over direct sales, then of course there is the distributors, the Manuacturers Cut for their branding and marketing.!!

Come on, Voom isn't buying them one at a time from the local Circuit City. They are buying in Volume direct from the Manufacturer. No middle man.

That is the way that DELL computers has become the #1 PC company. DELL doesn't pay more for their PC's than other companies do.

 

[mdonnelly]

Welcome to the world of startups. It costs real money to get in the game. The barrier to entry in DBS is quite high. The problem is very few of the CVC shareholders either understood that or were willing to wait for profitability. They've had 3 years to get off the ship, so let's not start shedding tears over market caps. ...

The market DID understand the barriers. It's the Dolans that didn't. They're treating VOOM like a hobby, not a business. The CVC board's job is to maximize value for the shareholders, not to cater to the whims of the Chairman (ask Enron board members). Cablevision is doing GREAT, outside of Rainbow DBS. Solution - divest the poor performer.