High-definition programming has found its media champion in Chuck Dolan, whose Rainbow DBS satellite service, dubbed Voom, will offer 21 HD channels to subscribers, more than any other satellite distributor or cable operator.
The exclusive HD channels will focus on movies, sports and music. In addition, Voom will get HD programming from the NFL Network, Playboy, Discovery HD Theater and Starz!
At a retail cost of $749.99, Voom’s combination satellite dish, HD receiver and off-air antenna went on sale Wednesday exclusively at Sears stores throughout the country. People who sign up now pay no monthly fees for programming until February. After that the monthly charge will be $39.90 for the 21 HD channels plus 88 basic-cable channels, the most notable of which are A&E, Discovery Channel, ABC Family, Court TV, E! Entertainment TV and FX.
Rainbow said it’s negotiating with other basic-cable networks, as well as working on increasing its menu of HD channels to as many as 39 by February.
The company makes no bones about the fact that it’s pitching Voom to the 6 million people who have laid out thousands of dollars for an HD TV set, adding that “a consumer with standard-definition television would not enjoy the full value of HD programming.”
Rainbow points to a Forrester Research study predicting that the number of HD-set owners will double to 12 million in the next year and could soar to as high as 40 million by 2007.
However, Wall Street is generally cool to Rainbow DBS. In a report, Bernstein Research cable analyst Craig Moffett said he predicts “little chance of commercial success” for Rainbow DBS.
Moffett said Rainbow DBS “carries high upfront costs for consumers and lacks distinctive advantage relative to DirecTV and EchoStar, and is disadvantaged relative to cable.”
DirecTV and EchoStar and digital cable systems already offer, or will soon offer, the HD services of HBO, Showtime, Discovery, ESPN and Mark Cuban’s HD Net and HD Movies, Moffett said.
And upgraded cable systems, he said, like Rainbow’s parent Cablevision Systems, can offer “much more reliable HD feeds (than satellite distributors) of ABC, CBS, NBC, Fox and PBS.”
However, another analyst, Eric Zamkoff of IRG Research, said Rainbow DBS “is taking a step in the right direction” by focusing on HD because “there’s a big demand by consumers for the high-quality of HD in the marketplace, and the prices of the HD TV sets are starting to fall.”