Rainbow widens Voom spectrum
Service bows with 10 EchoStar channels
Sapan, president and CEO of Rainbow Media, is relaunching 10 Voom high-def channels in the wake of a nasty boardroom battle at parent company Cablevision.
Voom opened for business last year as one part of a satellite-TV service established by Cablevision chair Chuck Dolan, but son James and the anti-Voom majority on the board forced a sale of the satellite business to EchoStar after Cablevision's staggering $661.4 million loss in 2004.
The new Voom starts with a base of EchoStar HD customers willing to pay an extra $15.95 a month to get the 10 Vooms (on one tier) and a batch of other high-def networks (on a separate tier). EchoStar owns a 20% equity stake in Voom, and, by contract, Rainbow has agreed to pony up $100 million a year to keep the Voom channels, which expand from 10 to 21 early next year, flowing with fresh programming.
Sapan is now hoping he can drum up more buyers for the 10 Voom channels by convincing cable operators that at least some of their subscribers are among the 13-million who have laid out thousands of dollars apiece for high-def home theaters. The Voom pitch is that these customers wouldn't think twice about ponying up an extra $10 to $15 a month for a tier of HD channels, including the Voom package, which includes Rush HD, a network for action-sports fans; Ultra HD, a network dealing with fashion, beauty and style; and Majestic HD, a movie channel that will include the first 17 United Artists James Bond movies, from "Dr. No" through "License to Kill."
Voom has a shot at getting some cable systems to sign up, says Aryeh Bourkoff, cable analyst for UBS Investment Research, because "there's a dearth of HD programming" available to the high-def set owners. As ardent early adapters, "these people have an insatiable demand for HD programs," Bourkoff says.
But Craig Moffett, a cable analyst with Bernstein Research, says cable operators, constrained by limited capacity, may not be able to shoehorn 21, or even 10, more HD networks into their systems, particularly the Voom channels, each of which targets a narrow viewership.
"These cable operators," Moffett says, "may want to hold off for the HD versions of their regional sports networks or of branded networks like FX and USA," which would draw more viewers than the Voom channels.
According to Moffett, the reason that EchoStar is so gung-ho about Voom is that "EchoStar can't compete with cable operators in offering local HD TV shows" transmitted by the O&Os and affiliates of ABC, CBS, NBC and Fox.
That's a big problem for EchoStar because the TV shows high up on the must-list for HD-set owners are broadcast programs like "Monday Night Football," "CSI," "Lost" and "24." EchoStar subscribers won't get these shows in high def.
So EchoStar transmits more nationally distributed cable-HD channels than anybody else to compensate for its technological limitations in offering local HD.
Echostar can't wait for Voom to expand to 21 channels, counting on Rainbow to eventually commission original movies and TV series in HD, as well as concerts, art auctions, fashion-model exhibitions, animated shorts, exclusive news reports and nature documentaries, among many other programming forms.
