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Cablevision: Subscriber list grows, so does loss
Posted 10 August 2004 - 07:04 AM
Bucking an industry trend that has soured Wall Street on cable companies, Cablevision Systems Corp. said yesterday that it gained nearly 7,500 cable TV subscribers in the second quarter.
But its Voom nationwide satellite TV venture posted an $81.5-million loss in the quarter ended June 30, contributing to a $187-million overall loss for the company, compared with a $158-million profit in the second quarter of last year. Revenue jumped 25 percent to $1.2 billion.
Jericho-based Voom, which launched in October, had only 25,000 subscribers nationwide as of June 30 and has been losing one in five new customers as it struggles with various technical and marketing hurdles. Its second-quarter loss was bigger than its $55-million loss in the first quarter. Recently, Voom raised prices to cut back on its losses. As part of an effort to gain new financing, it promised to cap future investments in the service at $150 million a year and $600 million total.
Analysts are skeptical
"We would urge management to shutter Voom and focus its high-definition efforts on its core cable business," said Fulcrum Global Partners analyst Richard Greenfield, pointing out that 83,000 of Cablevision's subscribers have taken high-definition set-top boxes. The strength of Cablevision's iO digital-TV service helped it buck the industry subscriber trend, executives said. Nearly 110,000 additional customers signed up for iO, topping 1,165,700, or about 40 percent of its 2.95 million cable TV subscribers.
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