|Originally posted by CPanther95
4) Some unsuspecting cable company to stick the bulk of the start-up debt on. ;)
dingdingdingdingdingding.....we have a winner folks!
Also, I believe that he sees Rainbow21 as the hidden value. Look at Rainbow Media. This is worth what, $2B+? What is the value of HDNet, which is basically 2 channels and a limited amount of original programming?
Right now, the Rainbow21 are a liability since Voom is the sole carrier and right now there is not enough of an audience to sell advertising. *IF* (albeit a big IF) he can sustain the Voom business long enough to reach a critical mass of viewers for these channels and/or sell distribution rights to other providers - they can potentially become revenue generators, especially a few years down the road when enough of total US households are receiving HD signals to make it worthwhile for advertisers to produce and run ads in HD.
I believe that when this occurs, HD only channels will command a huge premium over SD channels, since this audience will tend to be much wealthier than the rest of the market - particularly early on.
When cable channels first caught on this was the case with them as well and, for the most part still is today, since the audiences are more niche and tend to be wealthier especially for channels such as History, Discovery, A&E, etc. These channels receive a much higher rate per household than network channels, though much less $$$ overall, since the audiences are much smaller.
I have no doubt that at some point in the not so distant future, HD only channels will be THE hottest outlet on TV for advertising. It is a matter of when there are enough viewers to matter and right now, we are not their yet. I think you will start to see a major shift once at least 15% of total households are able to receive an HD signal. Whether or not Voom/Rainbow21 can last this long, obviously remains to be seen. But if they can, I think the media side could be worth more than the Sat business at that point - unless of course they do more than tred water and actually acquire enough customers to be a real competitor to D* and E*.