Dish Network In Trouble Over Ad-Skipping DVR
May 25, 2012 4:06 AM
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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.
New York Times
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5/25/2012 10:35:23 AM
...is 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 underway...like 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?
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