DISH -VS- VOOM - A Settlement has been reached!

[pendragon]

When you alternative is seeing Dish walk away entirely, followed by a 5 year+ legal battle, that should at least get you to the table. It should also get them marketing the channels elsewhere. But instead of forming a symbiotic relationship, Rainbow chose a parasitic relationship.

Businesses do not exist to serve customers nor have symbiotic relationships. Presumably Rainbow believes they are in the right and stand to show more return through the legal avenues rather than eking out a smaller existence after re-negotiating the contract. Correspondingly Dish believes they are in the right and stand to show more return through legal avenues rather than continuing to throw money away on Rainbow, year after year. I am simply surprised a contract like this was written in the first place.

By what facts do you make that conclusion? And did not Rainbow try to dictate a solution by interpret ambiguous language entirely in their favor as well?

I only said I wasn't clear about Dish's good faith, not that I concluded they acted in bad. And of course, both sides are choosing to interpret ambiguous language in their favor. Perhaps you mistake my remarks as strong support for Rainbow. I did like some of their programming, but many aspects of their business model made no sense to me.

The email record that has been brought to light does show an early desire and plan on Dish's part to use the auditing mechanism as a means to obtain contract relief. There is nothing wrong with that. Perhaps there are also records that demonstrate Dish had been thwarted by Rainbow prior to that time in an attempt to obtain a more mutually beneficial agreement, leaving the audit path as the next most reasonable step. I have not come across such, but that could be my ignorance as following this case has not been of strong interest to me.

For instance, Rainbow would have us believe that any and all salaries were part of its spending. Thus, without spending a dime on programming, they could have met their requirement just by splitting $100 Million. To me, that does not sound like what anyone intended.

This appears a highly exaggerated reading of Rainbow's argument, which asserts overhead costs were a legitimate part of their spending pot. Their overhead rate does not appear abnormally high, and businesses traditionally wrap overhead on top of direct costs when billing clients. Whether any overhead expenses should count towards the $100M, and if so which are allowable, are the crux questions the judicial system will have to address.

I disagree. I enjoy the HD programming I have been getting from other networks far more than anything I ever watched on Voom.

That wasn't my point. Clearly Dish believed/believes its brand was/is more marketable without VOOM than with, and I would be the first to agree. I'm sure there are more viewer-hours from the HD fare financed by Dish's savings on Rainbow than would be from the VOOM channels today without those subsequent offerings. But viewer-hours are not billed as revenue.

A trickier question is whether offering a lot more of the same has increased Dish's revenues than say if they had appealed to some niche markets. Personally, I find it a terrible waste of bandwidth to see the several suites of HD premium movie channels running the same movie on multiple channels over and over again, in this age of time-shifting. The Canadian DBS service we now prefer has only a few HD premium movie channels, but a given movie will run only twice in HD every few months. The quality of the picture is dramatically better and I see a generally broader content.

I suspect Dish loses a few subscribers because they have little interest in what majority watches. I'm certainly on that bubble. I didn't expect Dish to do anything to replace the VOOM channels after they were cut, but I have been surprised how often Dish replays the theme that VOOM-type programming offerings are coming. That simply has not happened.

 

[mike123abc]

Dish knew exactly how many customers watched VOOM and which VOOM channels they watched. The set top boxes report in the viewing habits. They knew VOOM was a losing proposition. Instead of being the must have of the new HD world, it was not attracting viewers. Channels that were popular were demanded in HD, even if they just showed upconverts or stretch-o-vision.

I am convinced Dish worked long and hard to find a way out of the contract because of the low VOOM numbers, coupled with the high expense. VOOM was stuck probably with a most favored nations clause that kept them from distributing through other providers. Other providers may have carried some of the channels, but VOOM was not going to be able to get another provider to carry them all at the rates Dish was carrying them. So, VOOM was never going to be able to sell to other providers because if they made a deal, Dish would get the same one.

Dish found what they thought was an out via the funding requirements. So, they took it. I do think we would still have 5 VOOM channels if VOOM thought they could make a go of it. But, the contract was much more lucrative to try to enforce than to agree to a compromise.

I still think Dish will come out ahead in the matter. The initial injunction was denied since the judge reading the contract and seeing the arguments from both sides thought Dish had the better case. VOOM might be able to convince a jury, but what will the appeals court decide. The appeals court could easily cut down any jury award to the point where Dish comes out ahead even if they have to pay VOOM some cash. The years that VOOM has been off Dish, dish has probably saved enough money to pay for the entire trial and any reward.

 

[riffjim4069]

VOOM had to spend x number of dollars per year on their programming, instead of spending on the programming they were spending it on saleries, bonuses and other things that DISH did not consider programming related.

DISH wanted to keep VOOM and took the 5 most widely watched channels but again VOOM said all or nothing so the other 5 were pulled.

I feel VOOM would still be here today if Cablevision didnt do that.

VOOM had to, in fact, spend x number of dollars per year (up to 500M) on their "service" which was, as the Judge stated, not clearly defined into the Affiliation Agreemenet; equally vague (again according to the Judge) is whether the VOOM service consisted of 10, 15 or 21 channels. An important point, and a hot-topic of debate, is that the Judge permitted all of VOOM's extrensic evidence---supplemental to the ambiguous Affiliation Agreement---showing both parties were aware, or should be aware based on due-diligence, of the "spent requirement" on the VOOM "service" because it was defined as including programming and overhead expenses. These overhead expenses along with Cablevision/VOOM's accounting practices were provided to DISH both during and after negotions; they were also exchanged during numerous emails and financials from 2005-2008. The extrensic evidence and related artifacts are filed with the Court Clerk and many are publically available...I stopped counting after twenty or so in which VOOM defined the "VOOM service".

The botton lines as, I have maintained all along, is that DISH/SATS signed a bad deal; VOOM was unable to successfully market the VOOM channels since they would be required to offer DISH most favored nation terms should they sell channels in smaller packages/lower prices/a la carte/etc.; so VOOM was complaisant to operate under the terms and conditions of the Affiliation Agreement with DISH being their sole customer. If a Jury believes the spend requirement was narrowly understood to include only direct programming costs, then DISH wins the case. However, if a Jury reviews the dozens, if not hundreds of artifacts showing that DISH knew (or should have known) the spend requirement for the VOOM service included programming and overhead charges...well, then VOOM wins. If VOOM wins, then it's up to the jury to decided how much to award in damages and penalties. It was interesting to note the Judge is barring DISH from from calling non-party expert witnesses from introducing expert reports when it comes to determining VOOM's damages should DISH be found to have illegally terminated the Affiliation Agreement.

Again...don't believe me, thousands of pages of documents are filed with the New York Unified Court System (eCourts) for your reading pleasure: WebCivil Supreme

 

[mike123abc]

Another problem for VOOM which was shown in the original denial of the injunction was that they billed VOOM via what they thought it used in CVC overhead. They would divide up peoples pay saying they are X% paid doing VOOM work Y% doing CVC work. The same with a lot of other overhead. If I remember Dish claimed there was a lot of nebulous billing, CVC was just billing VOOM an estimated overhead and did not have any documentation to show what resources VOOM was really using of CVC's overhead. So, even if overhead ends up being counted in the "service" can VOOM prove that CVC was not just making up expenses and charging them to VOOM.

 

[HDRoberts]

Another problem for VOOM which was shown in the original denial of the injunction was that they billed VOOM via what they thought it used in CVC overhead. They would divide up peoples pay saying they are X% paid doing VOOM work Y% doing CVC work. The same with a lot of other overhead. If I remember Dish claimed there was a lot of nebulous billing, CVC was just billing VOOM an estimated overhead and did not have any documentation to show what resources VOOM was really using of CVC's overhead. So, even if overhead ends up being counted in the "service" can VOOM prove that CVC was not just making up expenses and charging them to VOOM.

Bingo. The question goes far beyond rather or not "overhead" is included. They question is also what constitutes overhead. People seem to forget that Rainbow/Cablevision also own AMC, IFC, We, MSG, and others. I bet, given that there were 15 channels, Rainbow chose to arbitrarily attribute a big chuck of overhead to Voom just based on a fix percentage, when in reality, those channels probably used very little of Rainbow's services in the way an AMC or IFC would.

Still, that does not mean I buy the "overhead" claim, as any reasonable person should realize that simply having employees split $100M clearly was not the intent of a spending requirement, yet that is all Rainbow claims it was required to do.

 

[riffjim4069]

Pre-trial conference: December 9, 2010, at 9:30 AM.

Not much going on, but I though we would have a trail date by this time...

 

[whatchel1]

Not much going on, but I though we would have a trail date by this time...

So we gonna need a backpack while we are on this trail?

 

[riffjim4069]

So we gonna need a backpack while we are on this trail?

Yep, and I'll bring the trial-mix.

 

[Yes616]

Yep, and I'll bring the trial-mix.

What? No popcorn stand in the lobby?

 

[socalpanman]

So I get a Google notice of an MultiChannel News article Voom back from the Tomb. Anyone have access to it and what does it mean?

 

[mike123abc]

So I get a Google notice of an MultiChannel News article Voom back from the Tomb. Anyone have access to it and what does it mean?

Voom: Back From the Tomb - 2010-12-06 05:01:00 | Multichannel News

Yahoo cached results will let you read the result. If it fails, the only thing interesting was a couple lawyers quotes on what it means that Dish destroyed emails and the Judge will give the jury special notice about it:

“This is a big deal,” said Brant Martin, a partner in the Dallas law firm Wick Phillips Gould Martin. “Basically what it is, is the court telling the jury that you can assume that the evidence EchoStar destroyed helped Voom’s case. The practical effect of that is, juries sometimes take that as a quasi instruction from the judge that Voom is in the right.”

“It automatically puts the attorneys’ and the defendants’ credibility at issue,” said J. Sean Lemoine, also a partner at Wick Phillips. “The jury won’t know exactly what they did wrong, but [they’ll] know that they did something wrong and that the judge is not happy about it.”

 

[socalpanman]

Thanks mike

 

[towboy123]

Man I miss Voom the Rush channel is what got me into a 921. It was a sad day when Voom was gone

 

[cband]

What goes around comes around. That's what they get for getting rid of VOOM and real HD, to give us the ratings bonanza of the World Fishing Network.

Jeff

 

[HDRoberts]

That jury instruction is also a nice grounds for appeal.

The article is also wrong, which indicates possible bias. It says Dish agreed to carry 21 Voom channels. In the same judges opinion, that is ambiguous and a question of fact for the jury.

What goes around comes around. That's what they get for getting rid of VOOM and real HD, to give us the ratings bonanza of the World Fishing Network.

Jeff

Because the endless programming loops that were HDNews/Animania/Family Room/Ultra was so much higher quality.

 

[Hall]

What goes around comes around. That's what they get for getting rid of VOOM and real HD, to give us the ratings bonanza of the World Fishing Network.

I'm certainly not suggesting that WFN is a ratings blockbuster but you're foolish if you think Dish didn't know -- and use -- the actual ratings numbers for the VOOM channels. Actually, this applies to ALL channels that ALL providers offer when the customers have set-top boxes. In VOOM's case, Dish surely factored in a "hardly anyone watches" certain channels. Remember Dish wanted to drop some of the VOOM channels but not all of them ? Take a guess why...

 

[wallyhts]

"EchoStar has destroyed evidence and engaged in “egregious” conduct"

Huh!!!

 

[HDRoberts]

"EchoStar has destroyed evidence and engaged in “egregious” conduct"

Huh!!!

I think that is a bit extreme. Essentially, Dish has a policy of deleting email after 7 days if not specifically saved. In litigation, you cannot destroy that potential evidence if you think litigation is likely. But Dish failed to suspend that policy when they got indications Voom would sue if the agreement was terminated (even though the agreement was not terminated yet). But in reality, the only think lost is internal, non-privileged email. To me, what is important is the communication between Voom and Dish in the early days to fins out what the proper definition of "service" is.

 

[DustoMan]

I think that is a bit extreme. Essentially, Dish has a policy of deleting email after 7 days if not specifically saved. In litigation, you cannot destroy that potential evidence if you think litigation is likely. But Dish failed to suspend that policy when they got indications Voom would sue if the agreement was terminated (even though the agreement was not terminated yet). But in reality, the only think lost is internal, non-privileged email. To me, what is important is the communication between Voom and Dish in the early days to fins out what the proper definition of "service" is.

Seriously, that's a law? I think it's a bit of a stretch to go from neglecting to turn off an IT policy to willfully destroying evidence. So companies need to hire fortune tellers who can see the future and let them know the names of possible companies that can sue them? I mean, how can companies tell when another company is going to sue them, especially if they feel they are in the right? It's just not practical, you can't throw out ANY e-mail by that logic.

 

[Hall]

Seriously, that's a law? It's just not practical, you can't throw out ANY e-mail by that logic.

It's called Sarbanes-Oxley. Yes, it is a law. What most companies (publicly traded) have done as far as policy is any communication that may be $$$ related is not to be deleted.