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Dish Network is heading to court with several major broadcasters, with a focus on skipping ads

Fox, NBC and CBS are taking Dish Network to court because of a new feature that allows subscribers to skip over commercials in recorded content.

Dish is currently the No. 2 satellite TV provider with 14 million subscribers, and also filed suit to make ad-skipping acceptable with an official judgment.

If the current dispute isn’t handled immediately, there is a chance that it could cause distributors to pull their content from Dish.

The company’s “AutoHop” feature is unique because subscribers are able to skip all of the commercials, instead of fast-forwarding and jumping in small segments. AutoHop isn’t available to all 14M subscribers, and can only be used to skip commercials for prime-time broadcast TV episodes.

“Viewers have been skipping commercials since the advent of the remote control," said David Shull, Dish Senior VP of programming, in a statement. “We are giving them a feature they want and that gives them more control."

As more TV viewers watch TV episodes and movies on-demand on their DVRs, advertisers and TV broadcasters are looking to better monetize their content. The TV ad industry nears $20 billion per year, but advertisers are increasingly worried about DVR viewers -- a continually growing number -- simply skipping ads of recorded programs.

Fox and several other major broadcasts prohibit users from fast forwarding through on-demand content, so they have to wait for the ads to finish. In its licensing agreement with Dish, for example, Fox says the provider can retransmit prime-time content, though fast forwarding through commercials is prohibited.

Dish doesn’t believe AutoHop will make a long-term impact on whether or not commercials are viewed, but the big four broadcasters and Time Warner Cable strongly disagree.

After the service was first announced, Dish reportedly welcomed input from broadcasters, but there were immediate rumors of possible lawsuits. It should prove interesting to see which side wins the court debate, because it could have a major ripple effect hitting advertisers and subscribers.

Source: New York Times

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dvr + fast forward = it already exists
By MyndMelt on 5/25/2012 8:14:26 AM , Rating: 5
The commercial skipping only works on certain shows, certain networks. Its not likes its ALL the commericals. People are going to do this with their dvr anyways. This just removes the wear and tear on the fast forward button.

RE: dvr + fast forward = it already exists
By tastyratz on 5/25/12, Rating: 0
RE: dvr + fast forward = it already exists
By bah12 on 5/25/2012 11:21:53 AM , Rating: 5
In the past I would have agreed, but last night I watched the House finale. It really did a good job of spot lighting the HUGE amount of effort it takes to produce a prime time show, it is literally a staff of hundreds. That is a ton of effort for a 1 hour show. Considering the majority of people could get it free of charge via an HD antenna to a DVR and skip the commercials, if everyone actually did this where would all the money come from to pay all those people?

Like it or not shows exist to make money, historically how they did that is primarily through commercials. If you cannot sell an advertiser on the benefits of a 30 second spot, then the funding for the shoot is simply not there.

Break it down this way. Say a an average shoot is 4am to 11pm (not a stretch as the set crews and such usually get there quite early). Now lets say for that shoot you pay 100 people every hour at a VERY conservative rate of $100/hour. That equates to $190,000 just in labor. Throw in another $110,000 for overhead regarding electricity, set materials, equipment costs and you are looking at about $300,000 per episode.

This would actually be extremely cheap by today's standards, when you look at actual hit shows having to pay prime actors $1 million + per show. So in my very cheap hypothetical you'd have to sell your ~$15 min of commercial space for $20,000 per minute.

Herein lies the problem convincing advertisers your product is worth $20,000 / min in an environment where technology all but guarantees that a good % will never see that ad, is really quite a tough sell.

Don't get me wrong we all hate commercials, but they absolutely MUST exist. If they don't the content dries up. The market has already said they won't tolerate a pay per view scheme, so it really is the best way.

RE: dvr + fast forward = it already exists
By crimson117 on 5/25/2012 11:30:42 AM , Rating: 2
if everyone actually did this where would all the money come from to pay all those people?

They only pay primary actors $1,000,000+ per show because the advertisers pay so much for our eyeballs.

If advertisers paid less because peiople were skpping commercials, the actors would get paid less (just like actors on less popular shows draw lower salaries) and they could take the pay cut or walk.

If all advertising stopped, first of all you'd draw more viewers, and second of all there is still the revenue from paid TV like cable or satellite, where a good chunk of your bill gets forwarded by your provider to the networks already.

By Indianapolis on 5/29/2012 9:20:03 AM , Rating: 2
So if we start skipping commercials, they won't be able to afford to hire the same old tired over-paid actors to be in shows/movies over and over and over again? Sounds like a win to me. I would be delighted to never see Ben Affleck or Jennifer Aniston in another show ever again.

By johnsmith9875 on 5/29/2012 10:33:13 AM , Rating: 2
If they're paying actors $1,000,000 for a TV show, imagine what executives are getting paid!

By Reclaimer77 on 5/26/2012 9:49:39 AM , Rating: 1
Oh please. Advertising revenue's aren't going to crumble if a few thousand, or even millions, of people buy DVR's that can skip commercials. This is just getting absurd.

Most people don't even buy Tivo's anymore anyway because cable providers use their own DVR's when you sign up.

Don't get me wrong we all hate commercials, but they absolutely MUST exist.

They can exist, sure. Just don't tell us that we MUST view them.

By Solandri on 5/26/2012 12:44:55 PM , Rating: 2
Like it or not shows exist to make money, historically how they did that is primarily through commercials. If you cannot sell an advertiser on the benefits of a 30 second spot, then the funding for the shoot is simply not there.

If people want to skip the 30 second commercials, then the 30 second commercials are the problem, not the commercial-skipping technology. To argue the technology is in the wrong is morally the same as arguing that you shouldn't stop watching the TV to go to the bathroom when a commercial comes on. My remote control allows me to change channels away from a commercial. Should it now be illegal to add a timer on the remote which tells you when 30/60/90 seconds is up so you know to switch back?

The real problem here is that the 30 second commercial is considered by the industry to be holy and immutable. The industry needs to grow and develop a new revenue model which circumvents this problem with the 30 second commercial. My hunch is that we'll be seeing fewer commercials and more paid product placement in the future. If the ads are part of the show, there's no skipping it.

RE: dvr + fast forward = it already exists
By semo on 5/25/2012 8:31:19 AM , Rating: 2
Some ads are actually filmed in slow motion and there's also other tricks that ad firms use to work with fast forwarders. I think the problem here is that Dish Network's service skip some ads.

RE: dvr + fast forward = it already exists
By Labotomizer on 5/25/2012 9:38:55 AM , Rating: 3
I was going to say the same thing. Even when I fast forward at 3x I typically know what each commercial was and what product it was for. And I won't lie there are occasions where I'll stop and watch a commercial because of that. Some movie trailers and other things of that nature that catch my interest.

Advertising isn't this terrible thing people like to make it out to be. I don't have time to constantly research every new product that comes out that may be of interest to me. I count on ads to give me enough information that I may want to do more research.

By WalksTheWalk on 5/25/2012 5:12:23 PM , Rating: 2
To me the skip feature should be a moot point by now. When I had a VCR I could stop playing the program, fast forward a bit, skipping the commercials and resume the program. There were also many VCRs that could also place markers where it thought the commercials were so I could skip them during playback.

Check it out:

By Schrag4 on 5/25/2012 11:08:59 AM , Rating: 2
People have been skipping ads since the 1980s. Remember the VCR? It's funny because digital technology actually makes it easier for networks and providers to come together to PREVENT vieweres from skipping ads for the first time in decades.

One solution for the media companies is.
By dark matter on 5/25/2012 7:43:06 AM , Rating: 5
To take the approach from Clockwork Orange, that way they can be sure we watch their adverts.

RE: One solution for the media companies is.
By amanojaku on 5/25/2012 9:39:52 AM , Rating: 2
Exactly. I just get up and go do something else. That's not practical with online sites, since commercials can be as short as 15 seconds, in which case I just open another browser window to check mail or something. I am not influenced by commercials, beyond laughing at the funny ones. I only buy something if several trusted third parties have recommended it, and only if I have a need. I'm not a typical consumer, but I'm sure most of us are fed up that commercials take up almost half a show's run time. And many are legally deceptive, like those amazing burgers and sandwiches that you never find in the restaurant, or those colorful berries you never see in the store.

By Labotomizer on 5/25/2012 9:36:42 AM , Rating: 1
Influenced by a commercial? I'm not sure that's entirely what they exist for. I don't mind short commercials, such as the 2-3 I get when watching Hulu. I can watch a minute to a minute and a half of commercials. And sometimes it shows something interesting. I'll always do additional research before I make a purchase but sometimes commercials pique my interest enough to do that research.

Ads are better than ever if you ask me. They're far more targeted and when I see an ad it's more likely that it will be something I'll find interesting. It's not like it used to be where we were submitted to a barage of ads that had no relation to our interests. These days I don't think I see more than one tampon commercial a week whereas I used to see them all the time. And when I do see one it's usually because my wife has control of the TV. That's saying a lot.

By Trisped on 5/25/2012 5:08:41 PM , Rating: 2
If you can laugh at the funny ones then you are influenced.

Most commercials are about getting their name out, hopefully to the top of the list. You might not buy the products, but you know they exist, their basic feature set, and who makes them.

Personally I think traditional broadcasters are allowing themselves to go the way of the dodo by not providing more on demand viewing systems and finding ways to prevent add skipping.

Replay TV Went Through This
By WalksTheWalk on 5/25/2012 8:41:43 AM , Rating: 3
Dish Network had to have known this was coming. It's Replay TV lawsuit redux.

Personally I think it's good for someone to push these boundaries since it gives legal clarification to what is allowed and not allowed in the marketplace. There are arguments to be made for both sides and several gray areas regarding content control and the ability to modify (skip) broadcast content where ads are the primary revenue source.

By theapparition on 5/25/2012 11:44:42 AM , Rating: 2
Yeah I was going to say the exact same thing.

Replay TV was so much better than TiVo back in the day. Better hardware, software and user guide. They were coming on strong until the lawsuits killed them.

Still have some old Replay TV boxes in the basement somewhere.

RE: Replay TV Went Through This
By Reclaimer77 on 5/25/2012 2:20:22 PM , Rating: 3
I think what really killed Replay TV was the "Send Show" feature that let you share recorded shows with anyone lol. Pretty gutsy but what could they have been thinking?

Personally I think it's good for someone to push these boundaries since it gives legal clarification to what is allowed and not allowed in the marketplace.

Too bad these rulings have gone the wrong way. It's not the responsibility of the consumers or device makers to, and I'll use quotes from your link, respect "the lifeblood of most television channels", i.e commercials.

I cannot find any law where the viewing of commercials has been made mandatory. It's not. So how can companies be sued off the planet for offering that feature? It's abhorrent.

By WalksTheWalk on 5/25/2012 3:52:58 PM , Rating: 2
Yes, sharing was definitely the biggest issue for Replay and one of the major legal points that caused their legal problems.

As for skipping commercials, we've been able to record and forward through commercials for quite a long time now with the VHS recorders previously and now DVRs. There's a slight difference here in that skipping is not forwarding, but I could stop a VHS tape and forward without watching the commercials too. It just wasn't convenient.

To me, big content distributors like the TV networks, music and such, need a big wake up call. They are applying an analog business model to a digital age. What they need to do is get their digital distribution in place now so it's available everywhere to every device in a low-friction way. If they do this they stand a better chance in the picture later. Without a digital distribution model, the content creators will find their own and dis-intermediate the current distributors. They also need to consider that sometimes it's better to give some content away so it reaches a larger audience that would normally never see it. If the TV networks gave their content away for free via digital distribution with their commercials intact they would have a much larger audience and could better attract advertisers. Some people would skip the commercials but many would also watch them.

This is one of those instances
By Mathos on 5/25/2012 9:58:17 AM , Rating: 2
Where the federal government needs to step in and protect consumers rights. Essentially all advertisers and these TV broadcast networks are trying to double or triple dip. They already charge the service providers a licensing fee to be able to offer their content as part of their channel line up. Then, they also are paid by the advertising company, to show ads in "commercial breaks" during the sitcom/event. I tend to refer to those as drink, sammich, or restroom breaks. Now also add on to this, that these broadcast companies are also paid for product placement inside of the sitcom/show they are making or showing. Snapple and Sienfeld for example. Or clever placement of a coca cola can or sign in some other shows, etc.

Notice these are also the same groups that want to make it so you can't receive over the air broadcasting for free. This is one of those situations where the government needs to step in and say hey ppl have a right to not have advertising shoved down their throat 24/7 and should be allowed to skip ads, and no you can't pass the cost on to consumers.

RE: This is one of those instances
By GatoRat on 5/25/2012 9:57:07 AM , Rating: 2
TV isn't a right nor a necessity. I cancelled my satellite TV and now use Hulu and Netflix. I may start using Amazon. There are a few shows I haven't been able to watch and I don't particularly care.

Dish has the right to add an ad-skipping feature to their product and the networks have a right to not let Dish broadcast their content.

Your last point makes no sense. The government should force companies to provide a service for free? Who's going to pay for it? Taxes? Again, people are NOT having advertising shoved down their throats, they are willingly accepting advertising in exchange for entertainment.

Here;s the answer
By Dr of crap on 5/25/2012 8:21:26 AM , Rating: 2
When the "hop" button is pushed, then a screeen should pop up asking - "Do you really want to skip over ALL the ads?"

It seems like we are headed
By leviathan05 on 5/25/2012 8:27:56 AM , Rating: 2
towards much more intrusive advertising as the way to recoup ad revenue lost to both DVR and downloading of shows. Some type of constant advertising that takes over a portion of the screen even while the show is on is inevitable.

The only programs where traditional ads will continue to work is live broadcasts of sports, news, and other things that people want to watch as they happen.

By klstay on 5/25/2012 9:08:03 AM , Rating: 2
On shows where I can skip past the ads I do and those where it is disabled we always simply mute until the show is back on and get a drink or something in the meantime.

Obvious point...
By Motoman on 5/25/2012 10:35:23 AM , Rating: 2 that TV shows are paid for by advertisers. No advertisers, no TV. Not in any conventional sense, anyway. The stuff that everyone wants to watch on the major networks, like CSI, NCIS, American Idol, whatever, all cost enormous amounts of money to produce. Without major funding from advertisers, those shows wouldn't exist.

Having said that, I do feel that things are a bit different on the paid-for TV side. Which is to say, cable and satellite. I know most DTers are far too young to remember the advent of cable, but one of the promises was that there would be fewer commercials because the stuff was being at least partially funded by the consumer. Yeah...didn't turn out that way. While I can "feel" for advertisers on the OTA side of the equation, where it's a free service to the consumer, I am pretty irritated that I have to put up with so much advertisement on my paid-for TV service that I pay large amounts of money for each month.

There are competing factors here that probably can't be rationalized...the need for large amounts of money to produce popular shows, and the desire for consumers to avoid having ads shoved in their face (especially on paid-for TV services). Ultimately these factors are incompatible...but balance has to be found in order to maintain any kind of status quo (which is to say, to keep the big networks in the business of production their big-budget shows).

Things like DVRs, Roku, various other online services, etc. that can allow the user to bypass ads is of course great for consumers (the skip button for our DVR is just as worn out as yours is), but a very bad thing for advertisers...the clear concern being why spend any money on ads that people aren't going to see.

Ultimately I think that there are some fundamental changes already in-program product placement. The one that drives me nuts the most is in NCIS LA, where everybody's laptop has a glowing MS Windows logo on the lid. You know...because MS makes laptops... >.< The other thing that I think might start to happen is whole-program sponsorship...where one major advertiser just sponsors the whole program, and it's run fairly without ads, but just enough so that you know who's paying for your show.

At any rate, with so many consumers changing their viewing habits and advertisers seeing their dollars get wasted, we may very well be in for some big shakeups. Righteous raging against too many commercials is all well and good, but one has to consider that if the networks aren't getting funds for big-budget shows from advertisers...where are they going to get it from?

By Quadrillity on 5/25/2012 1:50:23 PM , Rating: 2
How about.... major networks start providing "À la carte" digital on-demand services that are paid with 1) subscriptions and 2) ONE continuous commercial break per "episode" viewing. This has worked wonders for those who stream tv episodes on tv network websites. I used to watch House M.D. using this delivery method.

- I want to only pay for the channels or episodes that I watch.

- I don't mind losing the ability to skip commercials if I am guaranteed that only one will be played per viewing.

The Hopper
By dlmartin53 on 5/26/2012 4:25:10 PM , Rating: 2
All this fuss over the Hopper. It is the only device Dish has with the skipping technology. It is expensive and most likely will see limited use. So we are going to court over a principle not any real threat to revenue.
With 14 million subscribers, you are going to see only a few thousand adopt the new tech at $300 and two year commitment.

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