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Malone Casts Doubt Over Voom’s Viability

Mar 14, 2005  •  Post A Comment

Liberty Media Chairman John Malone on Monday said he personally wouldn’t try to launch a third satellite operator with his own money, raising ever more doubt about the future of Cablevision Chairman Charles Dolan’s efforts to breath new life into his struggling high-definition satellite service Voom.

Answering a question during a quarterly conference call for Liberty Media International, of which Mr. Malone also is chairman, Mr. Malone said he had been approached a number times last year to participate in the launch of a third satellite company that would compete with more established players DirecTV Group and EchoStar Communications but declined because the risks outweighed any reward the venture might generate.

“Let’s put it this way, I wouldn’t do it with my money,” Mr. Malone said.

Mr. Malone also said that he joined Cablevision’s board “because Chuck Dolan asked me and I thought I might be helpful to him in settling things down.” He noted that he and Mr. Dolan have been friends for 40 years.

The comments by Mr. Malone, who joined Cablevision’s board earlier this month after Mr. Dolan ousted three board members who opposed funding Voom, illustrates that even supposed Dolan allies have their reservations about whether Voom as a business can be sustained.

Voom’s fate is at the center of an imbroglio at Cablevision that has pitted Charles Dolan against his son CEO James Dolan. Last week Charles Dolan agreed to use his personal fortune to help finance Voom while he came up with a more permanent financing plan.

Mr. Malone noted that at the time Voom was conceived, there was an industry belief that high-definition would be embraced a lot faster than the cable operators could upgrade their systems to accommodate the increased bandwidth required to deliver high-definition TV service. He said Mr. Dolan was launching Voom in a bid to deliver to consumers what cable wasn’t ready for.

However, HDTV acceptance among consumers has been slower than expected, and Voom has struggled to sign up customers, achieving what the service claims is a subscriber base of 46,000 users after more than a year in operation. As Mr. Malone said of Voom’s opportunity to beat cable operators at bringing HDTV to consumers: “I believe that window is closing.”