Uncertain Fate for Voom

VOOM isn't going anywhere, at least not yet.

On December 21, Cablevision Systems Corporation reversed previously announced plans to sell off the money-losing high-definition satellite television startup. Barely more than a year old, VOOM has won a small but loyal following among technophiles—26,000 of them—but hasn't caught on with the general population of couch potatoes. The 35-channel HD service lost $75.3 million in the third quarter of 2004.

Previous announcements that it would sell off the satellite service had boosted Cablevision's stock value, but in a filing with the US Securities and Exchange Commission (SEC), Cablevision said it had "decided to suspend pursuing the spin-off." Colorado-based EchoStar Communications, operator of DishNetwork, had been the rumored buyer.

Should the sale eventurally come to pass, Echostar could find itself on the long end of a great bargain—VOOM could go for as little as $125 million, "approximately half the cost to build and launch a new satellite," according to the financial press.

In its SEC filing, Cablevision stated that it would "pursue strategic alternatives" for VOOM. Possibilities include continuing to pump money into the service, acquiring a partner such as Echostar to share costs and revenue, and shutting it down entirely. This last scenario was generating much discussion among satellite industry observers in late December. Cablevision has yet to make a definite statement about its intentions for VOOM.

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