VOOM hits Echostar with a writ

chris

HDTV channel provider VOOM has hit Echostar with a legal action.

VOOM supplies 15 channels of spectacular HDTV programming to Charlie Ergen’s Dish Network. The trouble is that Ergen owns Voom’s satellite. To be more accurate, Rainbow Media – itself part of the giant Cablevision operation mostly owned by the Dolan family - sold its satellite in 2005 to Echostar for $200m plus the rights to supply Rainbow’s Voom channels onto Echostar’s Ultimate HD tier of programming.

Rainbow Media will only say that it has been granted a temporary injunction (pending a full hearing) that forces Echostar to keep Voom’s HD channels on the $10 premium tier and not – as Echostar wanted – to move them to a lower-penetrated “HD only” tier, which costs $29.99 a month.

The twist in this particular tale is that Echostar is – sort of – suing itself, in that Echostar has an equity stake in Voom’s HDTV service.

The action seems similar to another lawsuit settled between DirecTV and Mark Cuban’s HDNet high-def suite of channels. Again DirecTV was seeking to move HDNet and HDNet Movies to a new tier containing HD-only channels. That action was settled with HDNet staying where it originally was, and HDNet Movies being shifted to DirecTV’s new tier.

Cablevision doesn’t publicly break out VOOM’s financial performance from many of its other Rainbow channels and ad-income. However, the division which contains Voom (and its News 12 Networks, ad-sales and other Rainbow businesses) overall had a good year in 2007. Revenues were up 19.6% at $247m (from $206m). More specifically, Voom subscriptions were in excellent shape, up 300,000 in the quarter to Dec 31, and up an impressive 1.8m in the year overall to 2.1m.

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