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Here's a note of comfort for Charles Dolan.
As the founder and chairman of Cablevision Systems sells $800 million in bonds in a private placement to institutional investors as part of the planned spinoff of its high-definition satellite TV service, a new report says that the American public has a hearty appetite for the new technology.
A report by the Yankee Group forecasts that lusty demand will put HDTV in 59.3 million U.S. homes.
That's good news for Dolan, who plans to exit Cablevision and take over as chairman of the Rainbow Media spinoff.
As Cablevision reported in its second-quarter financials earlier this month, its Voom-branded Rainbow DBS service (which will be included in the spinoff) had only 25,000 customers.
The spinoff will include Voom plus other assets, such as three cable networks, American Movie Classics, The Independent Film Channel and WE: Women's Entertainment, which will help subsidize the launch of the satellite TV business.
Though Voom launched less than a year ago, Wall Street has been highly skeptical about its prospects and the subscriber figures seemed to bear out that view.
Still, the Yankee report noted that after initial sluggish growth for the four years following market introduction, HDTV sales grew 66 percent in 2003.
The report also noted that a full-court press by programmers, broadcasters, consumer electronics manufacturers and cable and satellite operators had put the new technology on the map.
One household in five plans to buy an HDTV, the study said, and HD capability is demanded by many consumers when they shop for a new set.
What's driving the surge?
Price certainly has a role. The average retail price of HDTVs is falling 20 percent a year, the report said.
Networks are offering more programs - including almost the entire primetime lineups of the three major networks - in high definition,
The study also noted that electronics manufacturers and cable companies are entering co-marketing agreements to provide HD sets to consumers.
Where does that leave Dolan?
He still has to convince consumers that Voom will offer a better HDTV experience or a greater programming menu than DBS competitors DirecTV and Dish Network, as well as cable competitors such as Cablevision.
Still, Dolan has made some other tough sales in the past.