VOOM and Gloom By Darryl Wilkinson January 24, 2005 — Cablevision's recent announcement of the pending sale of the VOOM satellite (along with other assets related to VOOM) to Echostar Communications Corp. (DISH Network) should cause a twinge of sadness in the hearts of all HDTV lovers. Whether you admired VOOM's pluck in attempting to go against the two established satellite services (DISH Network and DIRECTV) or thought that Cablevison Chairman Charles Dolan must have been smoking something beyond cigars when he came up with the idea for an HD-centric satellite service, the virtually certain discontinuation of VOOM (Echostar will most likely use the satellite to expand its own channel offerings) is no happy event. During its brief existence, VOOM brought more high-definition content into the homes of its approximately 26,000 subscribers than all other providers put together (cable, satellite, and over-the-air terrestrial broadcast). As many a pair of eyeballs with HDTVs sitting in front of them know, HD content is an addiction that continually demands to be satisfied. Where, oh where, will we now go to get our daily HD fix?

Analysts way smarter than I am have generally given two or three explanations for VOOM's demise. One reason, they say, is that the TV-watching world simply wasn't ready for such an HD-centric service. Furthermore, they opine, it was virtually impossible for VOOM to catch up to the near-insurmountable lead in total subscribers (and thus profitability) held by DIRECTV and DISH Network. Finally, there is the feeling that in the "post-Enron financial climate", the board of Cablevision was unwilling to continue absorbing the huge losses VOOM was racking up for fear of investor lawsuits. I don't doubt that those factors weighed heavily in the VOOM's failure to reach critical mass.

A couple more things to consider.

But I think there are two additional elements that have been overlooked - or at least underestimated - in the sad VOOM story. First is the content itself. While gorgeous, most of the HD content available on VOOM was niche-oriented. I particularly enjoyed the World Cinema channel, but I know the majority of the American public would wear out the channel change buttons on the remote trying to find a more down-home, mind-numbing offering. In terms of total popularity, Kung Fu HD (the first-ever 24/7 network devoted to martial arts) and Divine HD (the first gay and lesbian movie channel) probably received a similarly tepid reception. Ditto for Gallery HD (artistic masterpieces from around the world) and Auction HD (an inside look at exclusive live auctions). What VOOM really needed to distinguish itself was some sort of exclusive HD sport deal (similar to DIRECTV's lock on satellite broadcasts of the NFL) - something in addition to exclusive HD coverage of international soccer on WorldSport HD. Considering Cablevision's history and current sports franchise ownership, I'm sure they were pursuing such a deal. Unfortunately they ran out of time and money.

There but for the grace of TiVo go I...

In my mind, though, the most important thing that could have made VOOM a contender was an high-definition digital video recorder (DVR) - or at least a standard-def DVR. The majority of the high-end, early adopting viewers for whom VOOM could have been the perfect HD provider can no more conceive of watching TV without a DVR than they could going without a cell phone. It simply won't happen.

So, as visionary as the dream was, more than anything I think VOOM was felled - like the Martians in War of the Worlds - by something seemingly small but incredibly powerful. Let this be a lesson to broadcasters, cable companies, and Hollywood movie moguls: ignore the power of the DVR at your peril, or your business model may be vooming to its demise.