Ad-stripping comes with dire consequences

If the ability to strip commercials from TV series becomes commonplace, the investment firm noted, the consequences could range from increased product placement to cord-cutting.

“We believe that any threat to the existing mass audience advertising model could destabilize the entire television ecosystem,” said Moody’s analyst Neil Begley.

AutoHop has the potential to dilute the value of TV advertising, which Moody’s warns could lead to downturns in spending on commercials. That, in turn, could force the networks to insert more product pitches directly into the shows.

To compensate for reductions in ad revenues, content companies would attempt to hike retransmission fees, which could push distributors to pass those increases onto pay-TV subscribers. More consumers would drop their subscriptions rather than stomach increases to their bills.

Fox, CBS and NBC sued Dish on Thursday; the satcaster filed its own request the same day for the courts to uphold the legality of AutoHop.

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