Voom growing(from a wall street report) - Acquire licenses for West Coast

[rang1995]

from a WS report

Event / Analysis
Rainbow DBS, the Voom satellite operator currently part of Cablevision, submitted the
winning bids for two non-CONUS (full continental US coverage) satellite slots in the FCC
auction. Rainbow DBS will acquire the two licenses for $3.2 million each, totaling $6.4
million, a remarkable bargain in our view at roughly $100,000 per channel. The purchase
price is a mere fraction of the $24 million per frequency set in the January 1996 FCC auction
for a full-CONUS license. The $6.4 million purchase is a very modest increment to the $482
million (including the $85 million for MVDDS bids) full-year 2004 budget for Voom capex,
although development of this spectrum would add to the long-term operational costs of the
start-up venture.
After only two rounds, Rainbow DBS emerged as the acquirer of the 32 unassigned channels
at 175 degrees and 32 unassigned channels at 166 degrees for $3.2 million each, and
EchoStar of the 29 unassigned channels at 157 degrees for $5.8 million. The licenses are
issued for 8-year term for broadcast DBS licensees.
EchoStar bid on the 166 degree license but opted out in the subsequent round, despite having
the financial wherewithal to outbid Rainbow DBS. We interpret EchoStar’s bidding tactic as
both a sign of commitment to its leased strategy with SES Americom and also comfort with
its capacity. Indeed, EchoStar already has capacity warehoused on the West Coast and was
notably bid only for the slots closest to the US mainland.
Although the two new licenses will increase Voom’s capacity, the licenses carry poor look
angles. Currently, Rainbow DBS is the licensee of 11 channels at 61.5 degrees. The 61.5
degree slot is also a non-CONUS one and as the easternmost of US DBS orbital slots, it
suffers from poor look angles across the northwest corridor such as in Seattle and Portland.
With the addition of the new licenses, then, Rainbow DBS spectrum will be concentrated in the
easternmost and westernmost of the US DBS orbital slots with compromised look angles.
We believe that Cablevision would likely be the source of funds until a new capital structure
can be secured for Rainbow Media Enterprises, similar to Cablevision’s subsidy of the $85
million for MVDDS spectrum in the January FCC auction. The Rainbow Media Enterprises
spin-off is mainly contingent on obtaining $600-$800 million in a new AMC/IFC/WE bank
credit facility and $500-$600 million from issuances of unsecured bonds.
FlashNote

 

[rtt2]

Cablevision wins two satellite slots
By Harry Berkowitz
July 14, 2004, 8:03 PM EDT

Cablevision Systems Corp. Wednesday won the bidding for two orbital slots that could help fill a gap in its Voom nationwide satellite TV service.

The two orbital positions would allow satellites to reach mainly the West Coast.

Since Voom launched service in October, its single satellite, whose orbital position is off the East Coast, has been weakest in transmitting TV channels to the West Coast, especially the Seattle and Portland areas.

Cablevision won the two licenses for $3.2 million apiece -- the minimum required bid in the auction by the Federal Communications Commission.

Jessica Reif Cohen, a Merrill Lynch analyst, called the price a "remarkable bargain" based on past auctions.

EchoStar Communications, the nation's second-biggest satellite TV provider, won the third slot being auctioned, which reaches the western half of the nation, with a minimum required bid of $5.8 million.

Cablevision plans to spin off Jericho-based Voom as a separate publicly-traded company later this year with a budget of $482 million for 2004 even though analysts are skeptical of its prospects for success.

Meanwhile, the trade publication Adweek reported online that Voom has hired the Mullen advertising agency, whose clients include General Motors and match.com, to replace Lowe, which resigned in April after Voom said it was reviewing its choice of agencies.

As of April 23, Voom had only 8,000 subscriber homes, plus another 3,400 in which it was preparing to activate the service. EchoStar and DirecTV have a combined total of more than 22 million subscribers.

 

[rang1995]

Looks like voom may think HDTV is % wise an east coast-west coast thing??at least they seam VERY serious

 

[squicken]

Here in flyover country I can get a signal fine. However, I can't imagine a satellite dish that could pick up both of these slots. What are their plans?

 

[vurbano]

Here in flyover country I can get a signal fine. However, I can't imagine a satellite dish that could pick up both of these slots. What are their plans?

Umm another underpowered bird at a substandard LOS? ANd 2 dishes on your house?

 

[Lucky]

Maybe they will have an East and West coast service ? They could take down the West coast feeds of the movie channels on the current bird and get back the bandwith for another 4 0r 5 new HD channels. They then could put the West coast feeds of these channels on the new birds.

 

[seandudley]

I hope they don't take away the west coast feeds of the movie channes from those in the East, I like having them and would certainly miss them.

 

[Sean Mota]

I hope they don't take away the west coast feeds of the movie channes from those in the East, I like having them and would certainly miss them.

Sean,

If the DVR is available, would you still like to keep the West coast feeds?

 

[DarrellP]

Here in flyover country I can get a signal fine. However, I can't imagine a satellite dish that could pick up both of these slots. What are their plans?

Here's the fix, just be prepared for a huge Optometry bill.

 

[mike123abc]

166 and 175 cannot reach the eastern two thirds of the US. In fact 175 would be problematic as far East as Pheonix, AZ. But, they have 2 satellites in the east (current plus the new one), and could mirror them on the two west ones, that way AK and HI could have service and CA, OR, WA could have another option.

 

[Lucky]

I hope they don't take away the west coast feeds of the movie channes from those in the East, I like having them and would certainly miss them.

I'd rather have just one feed of the movie channels and more variety of other HD channels.

 

[wbuffetta]

THERE IS NO OTHER HD CHANNELS EXCEPT WealthTV. All the Other Programming Done By USA Network ETC. Are Al-acarte.
IFC, USA And More Are Getting Into HD Programming But Not A Complete Channel Like Brovo HD. Their Programming Will End Up On Channels Like INHD.
Eventually IFC, USA Etc. Will Have HD Channels For Us But For Now We Need Channels Like INHD To Get A Variety Of Programming From Those Sources.

 

[soledade]

I'd rather have just one feed of the movie channels and more variety of other HD channels.

As long as it was the EAST feed.

I still find that after months of "whe are working on it" crap from VOOM the premium channel west coast feeds have horrible picture quality compared with their east coast counterparts HBOHDW vs HBOHD.

Did anyone try to watch Charlie's Angels the other night? Ok on the EAST coast feed and a pixelation macro-blocking festival on the WEST feed.

I am running out of patience with VOOM's "we are working on it" crap.

Carlos

 

[Sean Mota]

Carlos,

Send an email to Wilt about the HD West feeds issues. There has been no posting about HD West channels having problems. I hardly watch them unless is the weekend because I usually catch everything on HD East feeds. So I don't catch the problems.

 

[soledade]

Carlos,

Send an email to Wilt about the HD West feeds issues. There has been no posting about HD West channels having problems. I hardly watch them unless is the weekend because I usually catch everything on HD East feeds. So I don't catch the problems.

My last email to him went unanswered (and I was extremely nice)! I will try again.

Thanks for listening!

Carlos

 

[Sean Mota]

My last email to him went unanswered (and I was extremely nice)! I will try again.

Thanks for listening!

Carlos

Carlos,

Email him a few times. I do the same when he does not answer. Imagine the guy has to go through all the emails of the Yahoo group and some of our emails might get lost with us. I usually email him a few times if he does not respond.

 

[DAVEGTESTR]

As long as it was the EAST feed.

I still find that after months of "whe are working on it" crap from VOOM the premium channel west coast feeds have horrible picture quality compared with their east coast counterparts HBOHDW vs HBOHD.

Did anyone try to watch Charlie's Angels the other night? Ok on the EAST coast feed and a pixelation macro-blocking festival on the WEST feed.

I am running out of patience with VOOM's "we are working on it" crap.

Carlos

Well, I saw this movie on HBO-W comparing cable HD with C-band HD on G9-120. There was lots of macroblocking when there was movement. So if that is what you saw, it's HBO. I have not seen anything this bad on any HD movie channel. The picture seemed to be very bright and the colors looked intense. However, the movie was pretty terrible after you got tired looking at the girls...

 

[Tvlman]

I live in Huntington Beach just South of LA and I get all the feeds just fine. My signal strength registers a constant 96. Only thing I haven't experience is the so-called "rain fade". Guess I'll find out in December/January when it finally rains here. Will let you know.