ZillionTV Cuts Staff

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Studio-backed startup ZillionTV, which is developing an Internet-to-the-TV service, has reportedly laid off almost one-third of its work force.

"As a result of our expanded go-to-market market strategy announced last month, the company has realigned its resources to support this growth," ZillionTV senior vice president of global marketing Liz Davidoff said in an e-mailed statement.

The Sunnyvale, Calif.-based company -- backed by Walt Disney Co., 20th Century Fox Television, NBC Universal, Sony and Warner Bros. -- had previously reported having about 100 employees. ZillionTV declined to detail the scope of the layoffs, but in a blog posting Thursday on XyHD.tv, a former employee claimed that nearly one-third of the staff was let go.

Last month the company announced it was delaying its commercial launch until the second half of 2010 and also said it was embarking on a direct-to-consumer service to supplement its telco-oriented distribution strategy.

In ZillionTV's original business model, ISPs are to offer a broadband video-on-demand service, with upwards of 15,000 titles, which are either free, ad-supported content or rental and download-to-own options. The hardware will be provided "free" but the service will carry a sub-$100 activation fee. The over-the-top version of the service would be available only areas where ZillionTV does not have an affiliate, according to Berman.

The company hasn't announced any of its telco partners but ZillionTV claims it is currently in closed trials on that front. It expects to start direct-to-consumer pilots in the fourth quarter of 2009 in select markets.

Other investors in ZillionTV include credit-card issuer Visa, set-top chip manufacturer Sigma Designs and several venture-capital firms.

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