4:33pm

Mon July 2, 2012
Business

Dish's Ad-Skipping Ability Roils Broadcast Networks

Originally published on Mon July 2, 2012 6:35 pm

Transcript

MELISSA BLOCK, HOST:

The satellite TV provider Dish Network is offering subscribers a new feature that automatically skips over ads, but broadcast networks hate that idea, and they're suing. CBS, NBC and Fox say the feature, called Auto Hop, violates copyright laws and puts the whole TV industry's foundation in danger. Joe Flint has been covering this for the Los Angeles Times, and he joins me now. At, Joe, let's talk about Auto Hop. It's a feature on Dish's new digital video recorders, or DVRs. How does it work?

JOE FLINT: If you record programming on one of the broadcast networks, ABC, CBS, NBC or Fox, when you watch that show later, you can press a button and the device automatically knows where the commercial breaks are and skips right over them. Your screen goes dark for a couple seconds and then the show resumes after the break is over.

It does not work as well on local news or live sporting events, anywhere where commercial breaks are more sporadic in the way they are distributed.

BLOCK: And it doesn't work on cable channels, either. This is just for the broadcast networks, right?

FLINT: Right now, the Auto Hop is offered only for use on the broadcast networks. It's nothing to do with technology. This is the way Dish is marketing it. I'm sure there are some reasons to go with that, but ironically, cable TV has a lot more commercials than broadcast and yet the service can't be used on cable network.

BLOCK: So the idea is Auto Hop is basically doing what you could do with your thumb and the fast-forward button on your remote control. It's just doing it automatically. It saves you that step?

FLINT: Correct. The Auto Hop turns three steps into one. In theory, you press the button, the screen goes dark and then, boom, the commercials are gone.

BLOCK: Well, the networks who have sued, what are they claiming here? How is this a copyright violation?

FLINT: They're claiming it's a copyright violation in the way the Auto Hop does what it does. It's one thing for me to fast-forward through those commercials. It's another thing for Dish to automatically take that out of our hands. Of course, we still have to activate the Auto Hop and Dish feels that the Betamax decision 28 years ago clears the way for what they're doing and that decision, of course, gave consumers the right to record programming off the TV for later viewing in the home.

BLOCK: So there's this copyright argument. There's also a huge financial problem here for the networks, right? Because advertisers pay what they pay based on the number of eyeballs seeing those ads.

FLINT: The networks are very concerned about anything that could take away ad revenue and, obviously, a device that eliminates the commercials is a threat. It's one thing to - even when you're fast-forwarding through those commercials, we all know we still see the glimpse of the car driving by or whatever beer is being sold. This takes those out of the equation.

BLOCK: And what does Dish Network say?

FLINT: Dish says simply it is giving viewers a choice, that consumers have been skipping commercials for generations and this is really just advancing the technology a little bit. I also think there's a little bit of business gamesmanship going on here. Dish is very concerned about what programmers charge them to carry them and there are some in the industry who feels that the Auto Hop is really a negotiating ploy for them and almost just something to throw back at the programmer's face.

BLOCK: You mean to get lower rates?

FLINT: Perhaps to try to get lower rates. Of course, the flip side is that the networks will say, fine. You want to offer the Auto Hop? We're not going to sell you our programming.

BLOCK: Are other providers following in Dish's footsteps? Are they also offering this technology to skip over ads?

FLINT: So far, Dish is out there on their own with the Auto Hop. Clearly, the technology is there for others to do the same, but I was at the cable industry's big convention about a month ago in Boston and none of the other major distributors, whether it's a Comcast, Time Warner Cable, DirecTV, are interested in sort of marketing this, and most of those companies sell advertising, as well, so they have something to protect here, too.

It's interesting that Dish is out trying to sell this Auto Hop device and, in the meantime, the networks have retaliated by not selling them television time to promote it, so they're now promoting the thing on radio, so there's a little bit of irony in here.

BLOCK: Joe Flint covers the media industry for the Los Angeles Times. Joe, thank you so much.

FLINT: Thank you. Transcript provided by NPR, Copyright National Public Radio.