Cablevision's developing Voom DBS platform could challenge current satellite TV providers with its focus on HDTV, a Wall Street analyst said.
The Cablevision/Rainbow DBS venture is expected to compete directly with EchoStar's DISH Network and DirecTV using 39 HDTV channels, including 21 that are exclusive to the service. Tom Watts of SG Cowen said with HD homes set to reach 42 million sometime in 2007, Voom could find a market, despite high initial prices.
He added that the Cablevision/Rainbow product could force the acceleration of HD plans by DISH and DirecTV.
"With its high price and the ability of both DISH and DirecTV to respond with competitive offerings, we view Voom as a high-risk venture," Watts said. "Nevertheless, it will stimulate both DBS operators and cable TV to respond. We view DISH and DirecTV as net gainers in the end, if they respond quickly and provide a more expansive HD offering than cable is likely to deliver."
In Watts' research note on Voom, he said the service plans to charge $39.90 for the 21 exclusive HD channels. Voom also may offer a limited suite of standard channels for $29.90. Equipment charges are expected to be around $749, slightly above HD equipment packages charged by other DBS providers.