Cablevision Has High Hopes for HDTV

The slow-motion train-wreck-in-the-making that is Cablevision's (CVC Quote) new satellite service chugged closer to its inevitable moment of impact Wednesday.

Cablevision, the New York-area cable-TV system operator, officially launched on Wednesday a high-definition television programming service called Voom -- a long-shot venture of great interest to Cablevision Chairman Charles Dolan, but one that has provoked near-universal dismay on Wall Street.

Unfortunately for Cablevision shareholders -- for whom Voom's only silver lining has been Cablevision's promise to limit the money it pours into the satellite service -- nothing at Voom's official launch hinted at a success in the making.

In fact, numerous factors surfacing at Voom's debut -- odd programming, intense competition, costly hardware and a questionably helpful retail channel, for starters -- serve only to make one more pessimistic about Voom's chances as an ongoing concern.

Given the unlikelihood that Cablevision's venture into a direct broadcast satellite service will turn out better than the company's failed efforts in owning a consumer electronics retailer (the now-shuttered The Wiz) and operating a chain of movie theaters, about the best that Cablevision shareholders can hope for appears to be a sale to entrenched DBS operators EchoStar (DISH Quote) and Hughes Electronics (GMH Quote).

Cablevision's shares, having recovered from a 52-week low of $7.33 in 2002, when pessimists believed the company was facing a funding shortfall, were down 22 cents Wednesday to trade at $21.05.

Def Jam

In theory, Cablevision's Voom -- a service the company says it expects to spin off to shareholders -- gives U.S. TV viewers something that they can't get elsewhere: a multichannel programming service devoted to the wide screen and sharp picture of HDTV. Voom is "the world's first, most comprehensive HDTV service," Dolan said Wednesday. And with U.S. households with HDTV sets forecasted to hit 12 million in 2004 and 40 million in 2007, the demand for HDTV programming will grow. "We believe we're on the verge of an exciting new era -- the era of HDTV," Dolan said.

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