Ad-skipping DVR prompts fight for the future of TV
POSTED: Saturday, May 26, 2012 - 4:00pm
UPDATED: Saturday, May 26, 2012 - 4:04pm
NATIONAL NEWS (CNN) — It turns out that consumers like the idea of watching TV shows with no other ads. And, surprise, the television networks are less than thrilled.
On Friday, news was continuing to emerge about a flurry of lawsuits between Dish Network, which last week released a tool to let its DVR customers do exactly that, and the major television networks.
It's a battle over a new technology tool. But, in some ways, it's a microcosm of the fight for the future of television and how we watch it.
"With Dish's aggressive move to please the end customer rather than advertisers, it's clear that in the fight for TV revenue the gloves have finally come off," James L. McQuivey, an analyst for Forrester Research, told The New York Times. "The fact that Dish would be willing to anger some of its most important content partners just goes to show how desperate these times we live in really are."
Two weeks ago, Dish rolled out Auto Hop, a feature for its DISH DVR that lets users who subscribe automatically skip ads while watching recorded shows.
It didn't take long for the lawsuits to start flying back and forth. Fox, NBC and CBS all filed suit in federal court on Thursday, and Dish fired back with a claim of its own against the networks.
The scuffle is the latest in a series of fights between traditional entertainment providers and Web-based delivery systems that can be traced back to Napster vs. Metallica and beyond.
Whether it's illegal downloads (the target of the failed Stop Online Piracy Act in Congress) or DVR systems that let users quickly and easily zoom past advertising, the new-media landscape offers a host of hurdles that have left some entertainers and, by extension, entertainment companies, struggling to adapt.
It's an argument that will sound familiar to those who have followed those fights.
The TV networks are saying that DISH has, in effect, violated their copyrights by stripping away the traditional way they make money.
"How does Charlie Ergen expect me to produce 'CSI' without ads?" CBS chief executive Les Moonves said this week, referring to Dish's CEO.
For their part, Dish argues that people have been skipping TV ads, in one way or another, since the invention of television. Viewers have muted ads for decades, and the DVR's fast-forward function only hastened the process.
"We are giving them a feature they want and that gives them more control," said David Shull, Dish senior vice president of programming, in a statement.
Janney Capital Markets analyst Tony Wible said the tool might not make that much difference for the typical TV watcher, though.
Ad Hop's commercial-skipping powers only kick in at 1 a.m. the day after the original program airs. He says that means the overwhelming majority of DVR viewers will watch when ads are still intact.
An AdWeek article that highlighted Wible's comments also noted that, according to Nielsen, 82% of broadcast TV viewing and 90% of cable viewing still takes place the day a show airs.
As CNNMoney noted, this isn't the only front on which the entertainment vs. tech war is being waged.
On Wednesday, several local New York stations, including the local Fox, PBS and Univision channels, filed suit against a new technology called Aereo.
Aereo would allow consumers to watch and record broadcast TV online by hooking up a small antenna to an Internet connection. The broadcasters are seeking an injunction against Aereo, claiming the company is allowing consumers to bypass cable retransmission fees.