The Spirit of Voom

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Critics of Cablevision Chairman Charles Dolan’s short-lived foray into satellite television called it questionable at best, folly at worst. But with that venture now headed for the history books, it is worth asking how the commercial space industry would look today if cold prudence always drove business decisions.

Certainly some of the disasters of recent years that cost investors billions of dollars would have been avoided, but so would many of the successes that have made satellite communications a highly profitable global business.

Boards of directors play a vital and indispensable role by providing checks and balances on management, but the view from here is that space would be a far less interesting and far less prosperous place were it not for dreamers and risk takers like Mr. Dolan. He tried to make a go of Voom from a tough vantage point — long after DirecTV and Echostar had established themselves with millions of subscribers, but probably a little too early to capture enough of the growing demand for high-definition television to compete with his well-entrenched rivals. So far, the user equipment needed to take maximum advantage of high-definition television is still a little too expensive to make it a mass market product. But that is a temporary situation. The price of consumer electronics always goes down rapidly as demand picks up.

But regardless of whether it was market timing or something else, Mr. Dolan’s dream of establishing a third major satellite TV provider in the United States appears dead. After weeks of open and increasingly bitter internecine warfare at Cablevision Systems Corp., the Bethpage, N.Y.-based cable TV provider founded by Mr. Dolan, the Voom satellite television service is slated to shut down April 30. The struggle pitted Mr. Dolan against his son, Cablevision President and Chief Executive Officer James Dolan, and a strong majority of the company’s board of directors.

Voom’s critics legitimately questioned the wisdom of entering a U.S. satellite television market that already had two well-established players. But the elder Mr. Dolan did not turn a tiny regional cable TV operation into an 800-pound gorilla in one of the world’s biggest telecommunications and entertainment markets by being timid about competing or by taking his cues from naysayers. It was that determination and willingness to bring a new product to a highly competitive marketplace that gave life to Voom — and that brief life is worth celebrating.

Perhaps it was a bridge too far, given how strong DirecTV and Echostar had become by July 2003, when Cablevision’s Rainbow-1 direct-broadcast satellite finally reached orbit. But rather than give up, Mr. Dolan reinvented Voom as a primarily high-definition television service, offering 39 channels in that format. At the time, DirecTV and EchoStar each offered fewer than 10 high-definition channels.

EchoStar and DirecTV have since unveiled plans to dramatically expand their high-definition television offerings. While this likely would have happened even if Voom never existed, it is equally fair to say that Mr. Dolan got the attention of his rivals when he targeted that emerging market niche.

Even when the board balked, Mr. Dolan fought on as long as he could and to be fair, since Cablevision is pulling the plug on Voom, no one will ever really know for certain whether he could have pulled it off or not.

The larger point is that much of the commercial satellite industry was built by the Charles Dolans of the world, the people who see a market opportunity before anyone else and have the courage to pursue it despite the risks. Grandiose dreams in the satellite industry often result in high-profile failures like Voom and the original Iridium and Globalstar mobile telephone services. But they also produce spectacular successes like DirecTV, Echostar and PanAmSat, whose founders were no less audacious — quixotic, even — than Mr. Dolan.

It may well be that common sense prevailed in the decision to take Voom off the air. Hopefully the intrepid entrepreneurial spirit that led to Voom’s creation and kept it alive in the early going will not be squashed along with it.

The satellite business is not for those with faint hearts or light wallets. May there always be people like Charles Dolan courageous enough to risk their own money, reputation and hard work to make those dreams come true.