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Cable Service Has 8,000 Subscribers But No 'Meaningful Revenues'

By Published on .

NEW YORK (AdAge.com) -- Voom has selected Interpublic Group of Cos.' Mullen to handle its advertising account after a review, according to executives with knowledge of the matter.
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Voom, which offers 35 channels of high-definition cable TV programming on a subscription basis, was launched last October. It is part of Rainbow Media Enterprises, a subsidiary of New York's Cablevision Systems Corp.

No 'meaningful revenues'
According to a Cablevision filing with the U. S. Securities and Exchange Commission in May, Voom had just 8,000 customers as of April 30 and "has not yet produced any meaningful revenues."

Headquartered in Bethpage, N.Y., Voom spent less than $1 million in measured media advertising buys last year.

Mullen referred queries about the ad account review to Voom, which did not respond to a call for comment. Matchworks, a consulting firm, conducted the review.

Mullen won the account in a competition against Interpublic sibling Martin Agency in Richmond, Va. Other agencies involved earlier in the review included Interpublic's Sloan Group, a New York direct and retail marketing group, and Omnicom Group's TBWA/Chiat/Day, New York.

Ad spending changes
Voom's prior creative agency was Interpublic's Lowe, which won the account in May 2003 when billings were projected to be $20 million. Voom received $794,000 in measured media last year, according to TNS Media Intelligence/CMR. (All of Cablevision spent $36 million in measured media last year.)

Voom will be under pressure to control marketing expenses, an issue that could limit what it spends on advertising. "The principal challenge for this business is to attract a sufficient subscriber base to reach and exceed a break-even point and to do so with subscriber acquisition and other costs that are within its funding capabilities," the company's May SEC filing said. "There can be no assurance that it will be able to do so."

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Bradley Johnson contributed to this report.

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