HDTV gets a new player

[LOBO2999]

Cablevision says the outlook for its Voom service is crystal clear. But in the rapidly evolving satellite TV market, the reception has been considerably more fuzzy.
By Peter J. Howe, Globe Staff | August 22, 2004

As the owner of a 64-inch high-definition television set, Stephen Ferreira of Billerica got excited when a new satellite network called Voom started up last year, offering nearly three dozen channels of high-definition shows and movies.

All Voom needs now is about 2 million more people like Ferreira -- and fast. Nine months after Cablevision Systems Corp., the Long Island cable TV company, launched Voom at a cost of over $600 million, the service has attracted only 25,000 subscribers nationwide.

With Voom accounting for less than 1 percent of Cablevision's revenues but nearly half its most recent quarterly loss, and threatening to gobble up another $500 million this year, many Wall Street analysts have been bluntly urging Cablevision to pull the plug on the would-be third satellite TV provider.

Not that Ferreira and other fans of crystal-clear, super-sized television aren't enjoying the show. "I love being able to enjoy a breadth of high-definition content," said Ferreira, a 54-year-old regional sales executive for consumer electronics maker Pioneer North America Inc., who raves about watching HD-format Lyle Lovett and Sheryl Crow concerts and movies in wide-screen format.

Ferreira already had a DirecTV satellite dish. But once Voom cut its installation prices this spring by more than 70 percent to $200, he was happy to pay another $50 a month for a Voom dish to get access to much more HD content.

"Once you have a high-definition TV, your first inclination when you sit down is, let me see what's on the high-definition channel," Ferreira said. "If you have to settle back to standard broadcasts, it's a big letdown."

With the price for a decent high-definition TV set dropping below $1,000 from $5,000 or more just two years ago, industry forecasters predict the number of US households with HD-capable sets will soar to as many as 40 million by 2007 from 9 million today.

National networks, pushed by federal regulators to convert to a broadcasting format that supports HDTV, are also offering more prime-time content in high-definition format, as are cable movie and sports channels. But for some demanding couch potatoes, it's far from enough.

Cablevision's wager with Voom is that there are enough people clamoring for more HD content to support a third satellite TV provider alongside DirecTV Group Inc. and EchoStar Communications Corp.'s Dish Network, not to mention cable TV companies like Comcast Corp. and RCN Corp. that have begun rolling out high-definition channels.

According to market analyst Bruce Leichtman of Leichtman Research Group Inc. in Durham, N.H., 9 million HD-capable sets have been sold in the United States, but fewer than 3 million are connected to cable or satellite HD channels. Only about 1.3 million have special antennas to pull in over-the-air HD programming from the three national networks and PBS. The rest are just being used to give a better rendition of standard digital channels or for playing digital video discs (DVDs). Continued...

the rest here
http://www.boston.com/business/globe/articles/2004/08/22/hdtv_gets_a_new_player?pg=2

 

[Coelacanth]

"9 million HD-capable sets have been sold in the United States, but fewer than 3 million are connected to cable or satellite HD channels."

Voom needs to find these people.

 

[squicken]

"9 million HD-capable sets have been sold in the United States, but fewer than 3 million are connected to cable or satellite HD channels."

Voom needs to find these people.

My brother is one of these people. He just watches OTA-HD in Houston b/c he works so much. The guy who bought my old set just watches OTA analog and DVDs. I tell them both they're idiots, but they seem happy. It amazes me that people w/ HDTVs don't use it to its fullest extent.

 

[Bruce]

"With the price for a decent high-definition TV set dropping below $1,000 from $5,000 or more just two years ago, industry forecasters predict the number of US households with HD-capable sets will soar to as many as 40 million by 2007 from 9 million today."

I hate that when they write about the TV set prices without any research(TV set dropping below $1,000 from $5,000 or more just two years ago) I bought my 50" Toshiba HD set 3.5 years ago for $2200.00 new at ABC Warehouse and my 40" 4.5 years ago for about the same price,HD sets have been affordable for a while now.

 

[rkr0923]

Just because something is in HD doesn't make it worth watching

 

[LOBO2999]

Here is what I was wondering about in the 2nd part of the article, Do all investors feel this way?
Richard Greenfield, a managing partner with New York investment firm Fulcrum Global Partners, raised eyebrows last year when he expressed a hope the Voom TV satellite would implode on takeoff so Cablevision wouldn't waste any more money on the project. Last week Greenfield summed up his current view this way: "Pull the plug tomorrow. Shut it down. Sell off the satellite for whatever you can get

 

[Bruce]

page 2 of the story:

Page 2 of 2 -- To supplement existing HD offerings from such networks as Bravo, Discovery, and ESPN, Voom has created 21 of its own proprietary, commercial-free all-HD channels. Several of them, however, run the same programs in a loop, feature mainly 1990s movies zinged up to a near-high-definition quality, or offer niche programming like fashion shows, art gallery tours, and vintage-automobile auctions.

Citing securities law "quiet period" requirements because of a pending stock spinoff of the Cablevision Rainbow Media unit that includes Voom, company officials declined requests for interviews this month. Cablevision chairman Charles Dolan, said to be one of the leading proponents of Voom inside Cablevision, brushed off critics in a recent interview with Cable and Broadcasting magazine, saying, "If it's new, you're going to have skeptics."

The big questions are whether there are enough high-definition TV addicts out there to make Voom succeed -- and whether Voom is a compelling alternative to rivals.

"They're starting in a horse race 50 lengths behind the lead horse," said analyst Leichtman. Voom has 1/1,000th the combined customer base of satellite rivals DirecTV and Dish. Voom's 25,000 customers across the country are fewer than the 26,274 subscribers Comcast counts in the city of Cambridge.

In New England, Comcast charges just $2 extra per month locally on any cable plan for a set-top box that can bring in seven or eight standard-package high-definition channels and another half-dozen premium services such as HBO and Starz that include high-definition programming. On top of that, Comcast is the sole source for most high-definition Bruins and Red Sox game broadcasts.

"For most people, you're getting 90 percent of what you'd want to watch from Comcast at a fraction of the price," said Jeffrey Bray, an analyst with the Babson Capital Management money-management firm in Cambridge.

Moreover, customers who sign up for Voom have been dumping the service at a rate of over 20 percent per year. Many -- including Ferreira -- had to get new receiver boxes installed this year after the first generation of equipment proved to be prone to freeze-ups and other glitches.

Some viewers and analysts call the Voom-specific channels somewhere short of ready for prime time.

"With Voom, they're all channels that nobody's ever heard of before, that were created just for this venue," said Josh Bernoff, a media analyst with Forrester Research. "It's just a huge gamble for consumers."

Richard Greenfield, a managing partner with New York investment firm Fulcrum Global Partners, raised eyebrows last year when he expressed a hope the Voom TV satellite would implode on takeoff so Cablevision wouldn't waste any more money on the project. Last week Greenfield summed up his current view this way: "Pull the plug tomorrow. Shut it down. Sell off the satellite for whatever you can get."

Voom's satellite rivals aren't sitting back, however. DirecTV plans to begin offering high-definition version of Bravo next month, as well as feeds of some local NBC stations that broadcast in HD. Between its own "Sunday Ticket" and National Football League broadcasts on ESPN, DirecTV will offer about 165 of this year's NFL games in high-definition format, spokesman Bob Marsocci said.

Dish offers an entry-level package of five high-definition channels with access to several premium HD networks. This year, it began selling a $999 package that includes a 40-inch HD TV set, the receiver, and installation.

Dish also sells a TiVo-style recorder that can store up to 25 hours of HD-format programming or 180 hours of standard-definition programming, spokesman Gregg Stucker said.

Peter J. Howe can be reached at howe@globe.com.

© Copyright 2004 Globe Newspaper Company.