Why DISH Network Dropped VOOM HD

DISH Network’s recent decision to drop the VOOM HD channel network has certainly drawn plenty of criticism from viewers who claim they love VOOM and its 24-hour HD programming format. From a business perspective however, the move had to be made.

For those not familiar with VOOM, the concept behind the company was to create and all-HD satellite television provider. After struggling to carve out a subscriber base, VOOM was given new life by Echostar when the parties reached an agreement to have all of the VOOM HD channels carried on DISH Network.

Earlier this year, DISH Network realigned its HD packages, forcing subscribers who wanted VOOM HD to pay $20 for all 15 channels. Subscribers who wanted the dishHD essentials package could subscribe for $10 a month, and would only miss out on the 15 VOOM HD channels and a few additional channels.

Of course, VOOM did not like that move, as it would erode their subscriber base. The parties headed to court to fight things out, DISH Network claiming VOOM had not held up their part of the bargain by failing to invest in new programming. DISH certainly has an argument there, as one of the biggest complaints about the VOOM network is its constant repeats. DISH Network finally pulled the plug, removing VOOM earlier this week, claiming breach of contract.

DISH Network head Charlie Ergen has always taken a hard-line stance with programmers, and has always been willing to cut the cord first and pay his lawyers to work it out in court later. His decision here will probably mean the end of VOOM, as it can count cable operator Cablevision as its only customer.

The bottom line with VOOM is that it was a niche product, enjoyed by only a few in the grand scheme of things. Very few, if any new customers were making the decision to subscribe to DISH Network based on gaining access to VOOM HD. While it may have to field a few customer complaints about VOOM in the short term, the longer term view required DISH Network to clear out the old in order to bring in the new.

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