The broadcast networks are seeing challenges to their business model from high-tech invaders both big and small this week.
With a dispute still raging with AMC Networks, Dish Network may be teeing up a new battle with the Big Four thanks to a new DVR feature introduced Thursday. The push came as as the broadcasters moved to repel a pair of disruptive upstarts on their flank, Aereo TV and Skitter TV.
The satcaster unveiled “Auto Hop,” which enables viewers to watch broadcast-TV shows sans commercials one day after they air. The Auto Hop option prompts the viewer at the beginning of a TV program with the choice to automatically strip out all of the ads, rather than manually fast-forward at each commercial break like most DVRs do.
But by empowering viewers to skip commercials with ease, Dish is cutting into the broadcast’s primary revenue stream within the C3 window, the three-day period after a program airs live in which the nets charge ad rates.
In a conference call Thursday announcing Auto Hop, Dish CEO Joe Clayton seemed to anticipate backlash from broadcasters.
“What we are trying to do here is give the consumer what he wants,” he said. “If they want to fight that, it might be a fairly large-sized battle.”
Bernstein Research analyst Craig Moffett predicted Auto Hop could land Dish in hot water with the broadcasters. “Given the already long list of industry-unfriendly features promoted by Dish, one wonders if Auto Hop will be the final straw that provokes legal action from the broadcast networks,” he said.
Auto Hop is an offshot of another Hopper feature “PrimeTime Anytime,” which allows subscribers to record an entire evening’s primetime programming on the broadcast networks. That functionality was unveiled in January at the Consumer Electronics Show, where it was one piece of a broader repositioning of Dish heavily concentrated on new in-home set-top boxes loaded with cutting-edge features.
The automatic recording of bulk amounts of primetime programming is reminiscent of another standoff between the broadcasters and Cablevision, which were embroiled in a multi-year legal battle over a remote-storage DVR that the cable operator ultimately won the right to deploy.
But it was the broadcasters that prevailed in 2001 when a now-defunct DVR manufacturer ReplayTV offered technology similar to Auto Hope, prompting lawsuits that ultimately led that company to bankruptcy.
There was no formal response Thursday from the broadcast networks, which have faced down other disruptive technologies in recent months including Nimble TV. One such venture, Skitter TV, informed its subscribers Thursday that feeds from the Big Four affiliates in its sole market, Portland, Ore., were being taken down after the broadcasters asked that be done while they reviewed their retransmission agreements.
The Big Four and other nets filed Wednesday in support of its request to slap a preliminary injunction on Aereo, a venture launched in March with backing by IAC that transmits broadcast signals to wireless devices. Petitioners called on the courts to respect federal protections afforded over-the-air TV.
“Congress has acted consistently to protect OTA television fro the irreparable harm that freeriders, like Aereo, pose,” the filing reads.
While distribution technologies often spur lawsuits, programmers sometimes opt to let the technology play out only to seek compensation down the line.
“With or without legal action, however, it seems certain the “ask” for retrans fees from Dish by the broadcast networks has just gone way up,” warned Moffett, who predicted Dish could eventually extend the capability to cable channel programming.
Dish is already locked in a carriage dispute with AMC, which stands to lose transmission of cable nets including IFC And Sundance to the satcaster’s 14 million subs.