justalurker said:
From all reports he did not have the choice. E* had a long standing offer for Rainbow1 and the related assets and the Cablevision board accepted the offer. Mr Dolan was unable to block the deal.
Echostar may have had a long standing offer, but he could have offered more money. Quite frankly the cost of Ku-FSS is extreamly cheap (why do you think E* is renting all this space when they could be putting up Ka birds?).
VOOM is losing real cash. For VOOM to survive it will have to cut costs. If you look at what both E* and D* are doing you would realize that the small DBS dish is going to become a think of the past soon. A 30" Ku-FSS dish is not going to be that big. The look angle of "R-2" is better on the west coast. Their lease allows them to grow to take over the entire satellite if they want it. With MPEG-4 they have a chance to offer all the channels they think they will need to get the customers to make a profit.
VOOM built the cadillac of satellites in R-1 and the cadillac of uplink stations. They unfortunately are not seeing the sub growth to pay for them. 61.5 is a nice set of DBS frequencies, but there are only 11 of them and they would have to put in a superdish anyways to expand the service. Keeping 61.5 does not make business sense.
Lets say the sale of the satellite goes through to Echostar and Dolan Sr picks up the remaining assets for free. What does this mean for VOOM subs?
1. They would get a 30" dish for Ku-FSS. Well they would have gotten this dish anyways since R-1 was out of space and they needed to expand to R-2.
2. VOOM serice continues from R-2 exclusively. They lose some channel capacity, so they may have to add new channels at a slower rate. It is not clear that an explosion of new HD channels is coming very quickly so it might not have made any difference at all.
3. MPEG-4 switch is not affected by the sale of R-1
4. DVR plans are not affected by the sale of R-1
So, in reality if everything goes smoothly VOOM subs in the end see no real difference in the medium term. In the short term they would be forced to get the bigger dish sooner. In the very long term it looks like if VOOM wanted to do LIL HD they would have to use Ka instead of spots on R-1. R-1 certainly did not have the capacity beyond 10-20 markets, so only a few would be impacted by this.