Voom Goes Boom12/19/2008 7:00 PM Eastern
Rainbow Media Holdings last week lowered the boom on Voom HD, with plans to shutter the domestic operations of its beleaguered suite of 15 HD networks. But it almost seemed like Voom HD, the brainchild of Cablevision Systems chairman Chuck Dolan, was doomed from the start.
Rainbow blamed the demise of Voom HD on the actions of its partner in the venture, Dish Network, which was the suite's largest distributor until it dropped the HDTV networks in a contract dispute in May.
That prompted Voom HD to sue Dish Network, seeking $1 billion in damages for what it claimed was Dish's violation of a 15-year carriage deal, a charge the satellite provider denies. That suit remains mired in the courts, and will be for a year or so, which was one of the reasons Rainbow CEO Joshua Sapan cited for pulling the plug on Voom HD.
But consultant Bruce Leichtman said that Voom HD's overriding problem, regardless of Dish Network, was that it was launched when there was a void of HDTV networks that needed to be filled, but few HDTV subscribers.
Now, while there are more viewers with HDTV sets, there are also dozens of high-definition versions of branded cable networks, such as ESPN HD. Those branded HD networks hold more of an allure to viewers than the Voom channels, which include services such as Monsters HD, according to Leichtman.
He said that while “it is true that Dish is the precipitous event” that lead to Voom HD's demise, the service's real problem was “what is the value of lesser-known content?”
Dish Network declined to comment last week.
Voom HD now has only one U.S. distributor, Cablevision, which said it will replace all the Voom HD services “with other quality HD programming,” reportedly in late January when they go off.
In a memo to employees last week explaining the Voom HD shutdown, Sapan said, “Unfortunately, as we analyzed the opportunities and challenges in the current environment and the lawsuit, it became clear that we can no longer operate Voom domestically.”
Voom's international service will stay open and be headed by Glenn Oakley, Voom's senior vice president of business development.
Voom HD evolved out of Rainbow DBS — a satellite-TV service that included Voom's HD networks — that launched in 2003 and was Chuck Dolan's pet project. Cablevision CEO James Dolan, however, opposed the service, and convinced the company's board to vote to close it in 2005.
But shortly before the service was set to go off the air, EchoStar (now Dish) did a deal where it committed to carry the Voom HD suite in exchange for a 20% stake in the HD service.
Last week, Scripps Networks announced that it had hired Voom HD general manager Greg Moyer as president of Scripps Networks International.