Voom Is Still Doomed
News Analysis
Voom Is Still Doomed
Despite an impressive lineup of HDTV channels, the new satellite TV service doesn't have a chance.
By Phillip Swann
Washington, DC (March 4) -- Voom, the satellite TV service launched last October by Cablevision, just revealed that it has signed up 1,627 subscribers to date.
That's only 1,627 customers after five months. To put it more starkly, Voom is signing up an average of 325 subscribers a month -- or just 10 a day. In a nation of more than 200 million people, only ten people are walking into a store every day to buy Voom.
I think you could get higher numbers if you were selling posters of Osama Bin Laden.
Voom, which provides more than 30 channels of High-Definition TV -- three times the amount found on any other cable or satellite system -- is being closely watched by the high-def industry. Many HDTV enthusiasts are hopeful that Voom's potent lineup will pressure cable operators and other satcasters to expand their high-def offerings.
But the embarrassing sub totals, which contributed heavily to Cablevision's $197 million loss in the fourth quarter, should not come as a surprise. In a column last October, I predicted that Voom would be a failure for three reasons:
1. Voom is targeting the wrong audience:
Approximately 8-9 million people have HDTV sets, and perhaps less than two million actually have the digital tuners required to receive hi-def signals. Although the HDTV numbers are growing, Voom's target audience is too small.
2. Voom will be co-opted by DIRECTV and EchoStar:
DIRECTV and EchoStar are expected to expand their HDTV lineups later this year. Voom's biggest selling point could be wiped out by year's end.
3. The satellite TV business has matured:
DIRECTV and EchoStar, which have been in business for a decade, now have more than 20 million subscribers combined. Although satellite TV officials are loath to admit this, there may be only 15 million to 20 million potential subscribers still out there. (Many viewers cannot get satellite service because they either live in apartments or do not have a residence with a clear southern view of the sky.) DIRECTV and EchoStar, which have spent billions on marketing and branding, would seem well positioned to get the lion's share of new subs. For Voom to succeed, it would have to take subscribers away from the existing services or somehow manage to leapfrog them in marketing awareness.
To be fair, Voom is just now launching a national advertising campaign, which it hopes will improve sales in the coming months. In addition, company officials say they are considering new "pricing alternatives" designed to entice HDTV owners. For instance, Voom now offers a monthly $9.50 leasing plan for the set-top; the "limited offer" is designed to remove the "sticker shock" of buying the system, which has been priced at $749. (Cablevision also plans to spin off Voom as a separate company next month.)
But the early numbers seem to confirm that Voom is barking up the wrong tree. As I predicted last October, I believe that Cablevision eventually will sell Voom's assets to either DIRECTV or EchoStar, perhaps as early as the end of the year.
That is, if they have any assets.
News Analysis
Voom Is Still Doomed
Despite an impressive lineup of HDTV channels, the new satellite TV service doesn't have a chance.
By Phillip Swann
Washington, DC (March 4) -- Voom, the satellite TV service launched last October by Cablevision, just revealed that it has signed up 1,627 subscribers to date.
That's only 1,627 customers after five months. To put it more starkly, Voom is signing up an average of 325 subscribers a month -- or just 10 a day. In a nation of more than 200 million people, only ten people are walking into a store every day to buy Voom.
I think you could get higher numbers if you were selling posters of Osama Bin Laden.
Voom, which provides more than 30 channels of High-Definition TV -- three times the amount found on any other cable or satellite system -- is being closely watched by the high-def industry. Many HDTV enthusiasts are hopeful that Voom's potent lineup will pressure cable operators and other satcasters to expand their high-def offerings.
But the embarrassing sub totals, which contributed heavily to Cablevision's $197 million loss in the fourth quarter, should not come as a surprise. In a column last October, I predicted that Voom would be a failure for three reasons:
1. Voom is targeting the wrong audience:
Approximately 8-9 million people have HDTV sets, and perhaps less than two million actually have the digital tuners required to receive hi-def signals. Although the HDTV numbers are growing, Voom's target audience is too small.
2. Voom will be co-opted by DIRECTV and EchoStar:
DIRECTV and EchoStar are expected to expand their HDTV lineups later this year. Voom's biggest selling point could be wiped out by year's end.
3. The satellite TV business has matured:
DIRECTV and EchoStar, which have been in business for a decade, now have more than 20 million subscribers combined. Although satellite TV officials are loath to admit this, there may be only 15 million to 20 million potential subscribers still out there. (Many viewers cannot get satellite service because they either live in apartments or do not have a residence with a clear southern view of the sky.) DIRECTV and EchoStar, which have spent billions on marketing and branding, would seem well positioned to get the lion's share of new subs. For Voom to succeed, it would have to take subscribers away from the existing services or somehow manage to leapfrog them in marketing awareness.
To be fair, Voom is just now launching a national advertising campaign, which it hopes will improve sales in the coming months. In addition, company officials say they are considering new "pricing alternatives" designed to entice HDTV owners. For instance, Voom now offers a monthly $9.50 leasing plan for the set-top; the "limited offer" is designed to remove the "sticker shock" of buying the system, which has been priced at $749. (Cablevision also plans to spin off Voom as a separate company next month.)
But the early numbers seem to confirm that Voom is barking up the wrong tree. As I predicted last October, I believe that Cablevision eventually will sell Voom's assets to either DIRECTV or EchoStar, perhaps as early as the end of the year.
That is, if they have any assets.
