With VOOM subscribers reportedly around the 25,000 mark, it is easy to see why the number three satellite provider is tempted to pull the plug when looking at the numbers in black and white. On a deeper level, HDTV is just starting to make it to primetime in the minds of consumers. Cable providers, who own upwards of 80 percent of the pay-TV market share today, struggle to provide the latest equipment and services to their customers, something that is comparatively easy for satellite providers. For example, Dish Network and DirecTV had HD-DVRs way before cable providers did, although Comcast just announced a deal to add the industry leading TiVo service to its cable boxes. What this means for VOOM is there is plenty of opportunity if their value proposition is right. As Dish Network improved its channel offerings and equipment deals, they ascended from about two million dollars in profits two years ago to over 70 million dollars in profit last year, according to published reports, proving it isn’t too late to right the ship for VOOM.

So what can VOOM do to make things stabilize and ultimately become profitable? Here are a few suggestions:

1. Sell – If a deal is possible with Dish Network or anyone else, then do it and do it fast. Otherwise, be truly dedicated to the space. Consumers are not going to want to make the commitment to a satellite service in terms of the physical installation, learning curve and beyond if they feel like their service is only days away from going away.

2. Improve the Equipment – Every HD receiver on the market has its problems, including Dish and DirecTV’s top HD-DVRs and especially the older, glitchy HD receivers from years gone by. VOOM needs the latest technology in their box and they should lease it to their customers for as low a price as possible. If cable providers lease a digital cable box for $5 per month, then VOOM should offer boxes for $5 as well. It’s worth losing money there in order to gain market share now while the market share is out there for the taking. VOOM would be well served to add TiVo to their boxes. TiVo is the class of the industry, carries brand recognition like Kleenex or Xerox, and is far and away the most user-friendly interface for DVRs on the market. Lastly, I would build a much more expensive high-end box that includes the same top-end HD-TiVo, along with an internal HD-DVD or Blu-ray player. By early 2006, those technologies should be ready for consumers. VOOM can parlay the excitement for an HDTV-capable disc with HDTV satellite service. With one HDMI cable, VOOM could be the easiest way to get the most HDTV in the future.

3. Keep Adding Channels and Programming Packages – DirecTV’s NFL deal is hard to say “no” to for any sports fan. A key opportunity comes from another sports league – the NHL. Cablevision knows intimately the problems the National Hockey League is having, since they own the New York Rangers and Madison Square Garden as part of their vast portfolio of assets. VOOM can call up NHL commissioner Gary Bettman and work a deal for every NHL game to be shot and broadcast in HDTV. Provide feeds for NBC when needed for the current NHL TV deal with that network. Black out games where needed in local areas when conflicting with other providers. In the end, if VOOM becomes the place to get the new NHL in HDTV, millions of sports fans will need to consider the service even if they have Dish or DirecTV.

4. Local Channels – Find a way to compete with DirecTV, Dish and Cable on local channels. DirecTV has Los Angeles local channels available from their system now, meaning that my gigantic antenna is no longer needed and watching HDTV is even easier than before. VOOM needs to keep up with this increase in programming value in major markets around the country in order to keep growing.

If you are in the market for an HDTV system, VOOM should get consideration from you today as you research your options. Their value proposition is very strong now, considering how much HDTV they offer. If VOOM acts on all or any of the above suggestions, things for their subscribers could get better and better. Charles Dolan doesn’t want to give up on this project and as long as his son will allow it, it will likely keep the party going. It’s early in the HDTV game and Cablevision has the cash to stay at the tables. As Dish Network proved last year, even if it takes a while to get established, you can make some serious money in the satellite TV game. At this point, it is likely more valuable for VOOM to keep on keeping on than to ditch the program.


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