Voom Goes Bust

[Gregg Lengling]

Cablevision has decided to suspend its Voom satellite service, which
included several high-definition channels, but had only a modest
25,000 subscribers by the end of Q3 2004. Voom was the cornerstone of
Cablevision's spinoff Rainbow Media Enterprises, which also included
IFC, WE: Women's Entertainment and AMC networks. The new entity was
originally slated to spin-of in 2003, delayed twice, most recently to
Q4 2004. Voom was down by $75.3 million in Q3 2004, on revenues of
just $5.9 million. Cablevision filed this statement with the SEC
regarding Voom: "The board of directors has decided to suspend
pursuing the spinoff of its Rainbow Media Enterprises subsidiary, in
its previously announced form, and instead to pursue strategic
alternatives for its Rainbow DBS business." The news had a positive
and immediate effect on the Cablevision stock, which closed at $25.06
yesterday, up by 13.3%

[AndrewP]

There was just a typo in this line:
Cablevision has decided to suspend its Voom satellite service...
Should read as:
Cablevision has decided to suspend its Voom satellite spin-off.

There is a big difference in service and spin-off.

Voom is alive.

Andrew

[Gregg Lengling]

No typo that news release was just cut and pasted from a newsletter I just received in the last hour.....

Granted the earlier news items I saw said the spin-off was cancelled but this one was different.  We'll just have to wait and see if they do plan on shutting down.

[StarvingForHDTV]

Finally.  I was wondering how long they were going to keep flushing money down the toilet.

[Sparkman87]

I looked on satellite guys, which has the largest VOOM forums on the intetnet, and there is no mention on VOOM shutting down.  I'd like to get the link to the news release that says this.

[Gregg Lengling]

http://digitaltelevision.com/articles/article_859.shtml

[Sparkman87]

I posted this in the VOOM news forum on Satellite Guys & the Moderator there confirmed that this is misinformation, that the writer did indeed mistake cancelling of the spinoff for the service shutting down.
He sent an e-mail to the author of the article who then responded.  Here are both:

----- Original Message -----
From: "Michael Silbergleid"
To: "Sean Mota"
Sent: Thursday, December 23, 2004 8:32 AM
Subject: Re: Voom article


> Sean,
>
> First, thanks for writing. And I agree that Cablevision's announcement is
> that the spin-off is suspended, but the consensus between the press
> coverage of Cablevision's announcement and industry analysts is that
> Cablevision wants to sell Voom, but there will probably be no takers,
> therefore the service is going to go bust.
>
> What would you do if you were Cablevision, and you made a minor
> announcement like they already did and the stock jumped by 13%? In this age
> of "shareholder value" mercy killing a money
> hemorrhaging service like Voom would only have three consequences:
> 1-Stop the loss
> 2-Increase share price
> 3-Piss off some 25,000 subscribers
>
> I'll bet that if anything, Cablevision sells their subscribers to DirecTV,
> which will then offer each one a free replacement DirecTV HD STB and dish
> with installation, but will keep the service going until all Voom
> subscribers who want to switched have been switched.
>
> As far as liability goes, we never said when the service would be suspended
> (they do have some time sensitive contractual obligations) and Cablevision
> would need to prove in court that they never had forward thinking
> discussions to kill off Voom. Probably why they haven't responded to
> interview requests before my story broke, or to complain after the story broke.
>
> At 06:53 PM 12/22/2004, you wrote:
>
> >Dear sir:
> >
> >There's a big difference between "supending spin off" and "suspending its
> >Voom Satellite service". You have made a big mistake in reporting the
> >correct news which may make you liable. Just trying to point your error
> >in the news.
> >
> >
> >http://digitaltelevision.com/articles/article_859.shtml
> >

[AndrewP]

Just, what I thought from the beginning of this bogus story.
Thanks, Sparkman87

[Sparkman87]

Read the article now, the title has been changed, along with the content to show that is was the spin off suspended, not the Voom service.

[StarvingForHDTV]

If the $75 Million loss this last 3 months is on par with $300 Million per year, it's hard to justify keeping 25,000 people in service.  That money could go a long way to feed the homeless or anything to better society.  It makes no sense to keep VOOM alive, in my opinion.  What a waste of money.

[mhz40]

Originally posted by StarvingForHDTV
If the $75 Million loss this last 3 months is on par with $300 Million per year, it's hard to justify keeping 25,000 people in service.  That money could go a long way to feed the homeless or anything to better society.  It makes no sense to keep VOOM alive, in my opinion.  What a waste of money.

Many businesses lose money for many years before making a profit.  Besides, the subs are worth money to the sellers if the service is sold... more so than just an empty satellite no one is looking at floating in orbit.