DVR Commercial Skipping Feature From Dish Could Be Part of Retransmission Debate
A DVR feature offered by Dish Network that lets viewers skip commercials could lead to issues around retransmission consent agreements, some broadcast and satellite industry experts said. Auto Hop, the feature unveiled last week, uses technology that skips over ads during playback.
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Dish’s retrans contract talks are likely to be extraordinarily complicated by this, said John Hane, a broadcast-TV lawyer at Pillsbury. The stations striking retrans deals may have even more complicated negotiations ahead of them, he predicted. Broadcast TV is financed 80 to 90 percent by ads, he said. “If I'm a broadcaster and Dish comes to me and says I'm going to carry your signal, but not clear your ads, Dish is telling me it'll undercut 80 and 90 percent of my revenue base.” The broadcaster will then have to ask Dish to pay 100 percent of the cost of production and distribution of the broadcast signal, he said. “I'd have to have a hole in my head to cut that deal.”
Auto Hop works with most shows recorded using PrimeTime Anytime, the feature that allows recording of primetime shows on the four major broadcast-TV networks, Dish said. It allows a viewer to watch a show with the Auto Hop option commercial-free starting at 1 a.m. the day “after a show has been recorded to the Hopper’s PrimeTime Anytime library,” Dish said in a news release. The service is consumer-initiated and consumers fast forward through commercials already, said Vivek Khemka, Dish product management vice president. “The video file isn’t corrupted.” The program can be viewed again with the ads, he said during a conference call. CEO Joseph Clayton said he doesn’t expect countermeasures from the networks. If enabled by customers, Auto Hop allows the broadcasters’ shows to have more visibility and more time for their content to be viewed, he said. The service will not skip over news and weather alerts, Khemka said.
While Dish’s new DVR isn’t widely used so far, other concerns could arise, said an NAB spokesman. If use of Ad Hop takes off, “there’s going to be probably a lot of concern over this in terms of copyright implications and the impact on revenue streams of free TV stations,” he said. Advertising is the only business model for broadcast TV, he said. “We don’t charge a monthly subscription for our service, as opposed to our competitors."
This feature “has to play a big role in Dish’s future retrans negotiations,” said Craig Moffett, Bernstein Research analyst. One could argue that Dish could use this feature as a bargaining tool, he said. Dish “could trade it away in return for lower retransmission fees,” he said. On the other hand, “it seems the ask for retrans fees from Dish by the broadcast networks has just gone way up,” he said.
"If you're a broadcaster, you're not happy about this,” said Bruce Beckner, a cable lawyer at Garvey Schubert. Broadcasters have a legal right “to have their complete, unaltered signal retransmitted in real time to the customer without deletions of anything,” he said: But “there’s a wide latitude for what the parties can bargain for.” A station can bargain for Dish not to include Auto Hop in the agreement, he added.
Dish also revamped its Remote Access App. The company said that “improves the performance and enhances the on-screen dashboard so customers can easily find and watch their favorite programs” on the iPad.