R
Robert Heitner
Guest
Original poster
Voom doom boom
Sun Sep 12, 2:21 PM ET
Michael Learmonth, Variety.com STAFF
Cablevision Systems' new sat business Voom looks shaky before its scheduled
spinoff later this month -- and investors couldn't be happier.
Shares of the Bethpage, N.Y., cabler soared 7% Friday after an upgrade by
Sanford Bernstein analyst Craig Moffett, who noted the likely demise of Voom
within two years.
In a recent Securities and Exchange Commission (news
<http://us.rd.yahoo.com/DailyNews/manual/*http://news.search.yahoo.com/searc
h/news?fr=news-storylinks&p=%22Securities%20and%20Exchange%20Commission%22&c
=&n=20&yn=c&c=news&cs=nw> - web
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.yahoo.com/search?fr=
web-storylinks&p=Securities%20and%20Exchange%20Commission> sites) filing,
Cablevision said Voom had a hard time signing up customers during July and
August.
Cablevision said 25,000 customers had signed up for the service as of the
end of June, after adding 17,000 customers in the second quarter alone.
Since then, only 3,700 subs have joined, a significant slowdown the company
attributed to equipment and installation problems as well as a decision to
raise prices in August.
Voom's failure could be good news for Cablevision, Moffett said. It will
minimize cash drains and lead to a relatively timely closure of the
business. He raised his rating on the stock from "market perform" to
"outperform."
Cablevision has already spent more than $150 million on the service,
including the launch of the Rainbow 1 satellite last year. The company began
signing up subscribers to the service, which requires more than $700 in
equipment, in January and to date has 28,700 customers.
Poor reception
Cablevision chair Charles Dolan, a cable pioneer and a founder of HBO,
believes high-definition TV will be no less a revolution than color was to
black-and-white. He launched Voom as the first all-HD TV provider, but
analysts suspect he may scuttle the service and sell the satellite to
DirecTV or EchoStar as they ramp up their HD channel capacity.
Voom has 35 HD channels including 21 it created called Voom HD Originals
like Rush HD, for extreme sports, and Divine HD, which caters to gays and
lesbians. Last week, Voom signed New York PR firm Dan Klores Communications
to push the channels.
But it increasingly appears that Voom's moment may pass. Other satellite
operators including DirecTV, which is controlled by News Corp., and EchoStar
are adding high-def channels and already have more than 23 million customers
combined. Last week DirecTV said it would spend $3 billion on satellites
over the next three years that would add capacity for 1,500 HD channels.
Moffett said the prospect of a shuttered Voom would create an attractive, if
speculative, buying opportunity for Rainbow Media Enterprises, which is
scheduled to be spun off later this month along with several of Cablevison's
national programming assets: AMC, the Independent Film Channel, Women's
Entertainment and Consolidated Regional Sports.
As part of the transaction, Cablevision shareholders will receive one share
of the newly independent Rainbow on top of each of their Cablevision shares.
Cablevision shares closed up $1.28 at $19.57 on Friday.
Sun Sep 12, 2:21 PM ET
Michael Learmonth, Variety.com STAFF
Cablevision Systems' new sat business Voom looks shaky before its scheduled
spinoff later this month -- and investors couldn't be happier.
Shares of the Bethpage, N.Y., cabler soared 7% Friday after an upgrade by
Sanford Bernstein analyst Craig Moffett, who noted the likely demise of Voom
within two years.
In a recent Securities and Exchange Commission (news
<http://us.rd.yahoo.com/DailyNews/manual/*http://news.search.yahoo.com/searc
h/news?fr=news-storylinks&p=%22Securities%20and%20Exchange%20Commission%22&c
=&n=20&yn=c&c=news&cs=nw> - web
<http://us.rd.yahoo.com/DailyNews/manual/*http://search.yahoo.com/search?fr=
web-storylinks&p=Securities%20and%20Exchange%20Commission> sites) filing,
Cablevision said Voom had a hard time signing up customers during July and
August.
Cablevision said 25,000 customers had signed up for the service as of the
end of June, after adding 17,000 customers in the second quarter alone.
Since then, only 3,700 subs have joined, a significant slowdown the company
attributed to equipment and installation problems as well as a decision to
raise prices in August.
Voom's failure could be good news for Cablevision, Moffett said. It will
minimize cash drains and lead to a relatively timely closure of the
business. He raised his rating on the stock from "market perform" to
"outperform."
Cablevision has already spent more than $150 million on the service,
including the launch of the Rainbow 1 satellite last year. The company began
signing up subscribers to the service, which requires more than $700 in
equipment, in January and to date has 28,700 customers.
Poor reception
Cablevision chair Charles Dolan, a cable pioneer and a founder of HBO,
believes high-definition TV will be no less a revolution than color was to
black-and-white. He launched Voom as the first all-HD TV provider, but
analysts suspect he may scuttle the service and sell the satellite to
DirecTV or EchoStar as they ramp up their HD channel capacity.
Voom has 35 HD channels including 21 it created called Voom HD Originals
like Rush HD, for extreme sports, and Divine HD, which caters to gays and
lesbians. Last week, Voom signed New York PR firm Dan Klores Communications
to push the channels.
But it increasingly appears that Voom's moment may pass. Other satellite
operators including DirecTV, which is controlled by News Corp., and EchoStar
are adding high-def channels and already have more than 23 million customers
combined. Last week DirecTV said it would spend $3 billion on satellites
over the next three years that would add capacity for 1,500 HD channels.
Moffett said the prospect of a shuttered Voom would create an attractive, if
speculative, buying opportunity for Rainbow Media Enterprises, which is
scheduled to be spun off later this month along with several of Cablevison's
national programming assets: AMC, the Independent Film Channel, Women's
Entertainment and Consolidated Regional Sports.
As part of the transaction, Cablevision shareholders will receive one share
of the newly independent Rainbow on top of each of their Cablevision shares.
Cablevision shares closed up $1.28 at $19.57 on Friday.
