Rainbow Media Holdings, blaming a loss of carriage on Dish Network and the expected lengthy litigation stemming from that drop, is shutting down the domestic operations of its beleaguered Voom HD, its suite of 15 HD networks.
Dish Network had been the largest distributor of the Voom HD services, but it dropped them in May in a contract dispute with Rainbow. That left Voom HD with only one U.S. distributor, Rainbow parent Cablevision Systems Corp., which will replace the HD services, reportedly in late January when they go off.
Rainbow filed suit against Dish Network, seeking $1 billion for what it claimed was Dish’s violation of a 15-year carriage deal, and the tangled case remains in court.
In a memo to employees Thursday, Rainbow president and CEO Joshua Sapan blamed the suit and the scenario with Dish Network for leading to the demise of Voom HD domestically. The Voom HD operation, which includes two networks, will keep its international business running where it reaches 32 million subscribers in 36 countries.
“As you may have heard, Rainbow has made the difficult and painful decision to shut down the domestic operations of Voom, which regrettably will result in layoffs,” Sapan said in the memo. “Voom's domestic business was made possible through an affiliation agreement between Rainbow and EchoStar, which was established in 2005.”
“Unfortunately, earlier this year, a significant legal dispute arose with EchoStar (now known as Dish Network),” he added. “While that lawsuit is progressing, the expectation is that it will be at least a year before any sort of resolution is reached. Therefore, we have been evaluating different strategies and plans for Voom's domestic business.”
Said Sapan, “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, particularly without EchoStar fulfilling its obligations and providing its support. Some Voom staff will remain at Rainbow to manage the operation of Voom internationally, using our expertise in content development and the depth of our HD programming library to seek new distribution opportunities around the world.”
A Rainbow spokesperson confirmed that Voom’s domestic operation was being closed, but declined to comment further, or discuss how many employees will lose their jobs. But those staffers reportedly won’t have to leave for 60 days.
Cablevision will replace the 15 Voom networks with other HD channels, with that transition most likely coming in late January.
“We will replace these channels with other quality HD programming and there will be no reduction in the number of high-definition channels available to our iO TV customers,” a Cablevision spokesman said. “We currently offer 68 HD channels without any additional equipment or programming fees, unlike our competitors, and expect our HD lineup to continue to expand in the coming months.”
Earler this week, Scripps Networks announced that it had hired Voom HD general manager Greg Moyer as president of Scripps Networks International.
Glenn Oakley, senior vice president of business development at Voom, will take over the international operations for the HD service.