ZillionTV, the streaming video set-top box-maker backed by Disney, Fox, Sony and Warner Bros, has laid off an undisclosed number of staff. A former employee reports that the company let go roughly a third of its 100-member workforce; ZillionTV would only confirm that it "realigned its resources," as part of a shift in its overall business model.
The company emerged from stealth mode in March, with the idea that it would provide an ISP-supported IPTV service, complete with a rewards programme that encouraged viewers to watch ads. Customers would only pay an "activation fee" for the free ZillionTV box; with no subscription revenues, the goal was to get users to upgrade to higher data plans with their ISPs (and likely get a rev share). Investors clearly bought into the idea beforehand: After raising a $4 million first round from VCs in early 2008, ZillionTV added around $19 million more from backers like Visa and the big media companies, including an $8.8 million add-on earlier this year.