An illustration of Rainbow 1 in space. Credit: Lockheed Martin

Rainbow DBS, the satellite service division of Cablevision Systems Corporation, announced that it would introduce, on October 15, the first service to offer a comprehensive array of high-definition television (HDTV) programming to customers across the continental United States.

The new satellite service is designed to meet the emerging demand for high-definition programming from a rapidly growing base of HDTV owners, by offering as many as 39 HD channels, including an exclusive VOOM package of 21 HD channels from Rainbow Media. To date, rival U.S. satellite and cable services have offered no more than seven syndicated HDTV channels. In addition, as many as 88 of today's most popular cable channels will be provided in standard-definition format, along with local digital over-the-air programming.

Rainbow DBS will unveil VOOM's extensive HDTV programming and begin offering the service nationwide on October 15. Customers who want to be among the first to subscribe can submit their name and contact information beginning October 1 at www.voom.com.

The company also announced that satellite-broadcasting pioneer Mickey Alpert will lead Rainbow DBS as senior executive vice president and chief operating officer, reporting to Cablevision Chairman Charles F. Dolan.

An unmatched television viewing experience
Mr. Alpert said: "VOOM represents the next generation of television programming, targeted to a growing market of consumers already making a major investment in home entertainment. Almost 6 million consumers have bought HDTV sets and other home theater equipment, only to find that the high-definition programming they are looking for simply doesn't exist. We will fill that gap by launching an exclusive VOOM package of 21 HD channels built around the interests of these high-end consumers, while also pulling together existing HDTV programming with a complement of cable favorites, premium packages and local digital over-the-air programming. Moreover, VOOM will act as a stimulus to those who are interested in buying HDTV sets, but are waiting for the content," Mr. Alpert concluded.

By aggregating and originating the best high-definition programming along with cable favorites, VOOM will provide consumers with an unmatched television viewing experience. In addition, Rainbow DBS will use over-the-air antennas to deliver local digital broadcast services in both high-definition and standard-definition - taking advantage of the FCC requirement to migrate from analog to digital signals, as well as the construction of more powerful digital broadcasting towers.

The state-of-the-art Rainbow 1 telecommunications satellite, launched in July, is now fully operational and will begin broadcasting to beta-test homes on October 1.

Hardware for the VOOM service will include a satellite dish and specially designed set-top receiver manufactured by Motorola, as well as a digital antenna for local broadcast signals. In markets with local HDTV programming, local channels will be integrated into the same user interface with the VOOM offerings.

VOOM will initially broadcast in MPEG-2, with an upgrade to MPEG-4 currently expected for the third quarter of 2004. Using MPEG-4, Rainbow DBS will be able to broadcast more than 200 channels, including at least 39 HDTV services. The Motorola receiver is the only one on the market designed to be easily upgradeable to MPEG-4, so that customers will not have to replace their receivers to enjoy the additional programming choices.

Experienced management team
Rainbow DBS has assembled an experienced management team, headed by Mickey Alpert. Mr. Alpert joins Rainbow DBS from Alpert & Associates, where he has provided consulting services in the communications and entertainment industries since 1986. During this time, he has worked with his clients and the major U.S. and Canadian DBS companies in developing and implementing strategic opportunities. He previously served as a senior officer of Comsat, where he led the development of the first U.S. direct broadcast satellite (DBS) initiative.

Joining Mr. Alpert on the Rainbow DBS senior management team are Bill Casamo, executive vice president, marketing and sales and Jay Aldrich, executive vice president, finance. Mr. Casamo previously held a similar position at DIRECTV and also was vice president, sales for the Americas, for Thomson Consumer Electronics. Mr. Aldrich was formerly a senior vice president with Alpert & Associates; a senior executive with PrimeTime 24, a satellite program provider; and worked in the finance and business development area with Rainbow Media. Additional Rainbow DBS executive announcements will be made on October 15.

In developing VOOM, the Rainbow DBS team has also drawn on the engineering and technology capabilities of Cablevision, as well as the programming expertise of Rainbow Media, which has launched a number of successful cable channels including AMC, Fuse, IFC (Independent Film Channel), News 12 Networks, WE: Women's Entertainment and Bravo.

Fulfilling an unmet consumer demand
HDTV-compatible televisions are one of the fastest growing segments of the consumer electronics industry, and consumers in this segment are among the best customers in the multi-channel pay market, because they spend heavily on home-entertainment. HDTV offers picture quality significantly sharper than standard definition and better than 35-millimeter movies, with sound quality comparable to that of today's compact discs.

According to Forrester Research, the number of HDTV households is expected to double this year, reaching six million by the end of 2003, and to double again to 12 million by the end of 2005. (Unlocking Profits From Digital Television, Forrester Research, March, 2003)

HDTV clearly also has room for substantial further growth, because this segment of the market is currently underserved. According to a recent study by the Consumer Electronics Association (CEA):

• Consumers are overwhelmingly unaware of existing HDTV content - 71 percent of those surveyed said they were not very familiar or not at all familiar with HDTV programming.
• Among potential HDTV purchasers, almost 30 percent of those surveyed cited lack of HDTV content as an inhibitor to purchasing an HDTV set.
• An even larger percentage of consumers surveyed lack basic information about how to receive the full benefits of HD programming:
  • 74 percent of consumers were unaware that they need a set-top box to view HD programming; and
  • 54 percent weren't aware that owning HDTV hardware would enable them to view programs in HD only if the programs are broadcast in HD.

The CEA will announce the full results of this survey at the upcoming CEA Industry Forum in Carlsbad, Calif. on October 13.

About Rainbow DBS
Rainbow DBS is the satellite service division of Cablevision Systems Corporation, one of the nation's leading entertainment, media and telecommunications companies.

In addition to its broadband, cable, Internet and telephone offerings, Cablevision owns and operates Rainbow Media Holdings, Inc. and its networks; Madison Square Garden and its teams; and, Clearview Cinemas. In addition, Cablevision operates New York's famed Radio City Music Hall.