Rainbow’s Mag Rack Suffers Layoffs
By R. Thomas Umstead -- Multichannel News, 8/7/2003 5:00:00 AM
One week after securing a carriage deal with Mediacom Communications Corp., several employees of Rainbow Media Holdings Inc.’s Mag Rack video-on-demand service received pink slips earlier this week.
While it’s unclear how many employees were laid off, most were from the company’s programming and production department.
Sources said the changes were the result of Rainbow’s decision to use 'third-party' entities to program its 'multi-video-magazine' VOD service. None of the service’s nearly 40 magazine titles -- most of which had been produced in-house -- will be eliminated, sources close to the situation said.
Sources also said the layoffs are not related to the ongoing AMC accounting scandal.
'Rainbow has made a strategic business decision to use third-party entities for the development and production of original content for Mag Rack’s on-demand service, which has resulted in a small reduction of staff,' according to a Rainbow statement.
'While it is always difficult to make these type of decisions, we believe this is a more appropriate way for us to operate our business moving forward,' the statement continued.
Rainbow announced a distribution deal last week with Mediacom, which will place the service in its VOD-enabled systems beginning Aug. 31.
The service also has distribution deals with Insight Communications Co. Inc., Charter Communications Inc. and Rainbow parent Cablevision Systems Corp.
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