Judge: 'Hopper' Is a Better DVR3 Oct, 2013 By: Erik Gruenwedel
Media companies loathe Dish Network’s ad-skipping DVR despite the fact its technology makes common sense
Imagine a DVR that allows a user to automatically skip commercials on recorded programs instead of having to manually fast-forward through them. Seems like the logical next-step in the evolution of television in the living room, similar to the remote control, close-captioning, video-on-demand, pause and play, right?
New York District Court Judge Laura Taylor Swain thought so, and on Sept. 18 denied a preliminary injunction motion filed by ABC TV against Dish Network and its Hopper DVR, which features the controversial AutoHop ad-skipping technology.
The ruling was similar to a Los Angeles District Court judge’s decision last year against Fox Broadcast Co.’s injunction motion filed against Hopper.
Swain did deny Dish’s motion to dismiss a separate counterclaim filed regarding retransmissions by CBS Corp. against Hopper.
On Oct. 2 Swain’s redacted decision was made public. In it she found that Hopper did not violate ABC (or CBS’) copyrights since a Dish subscriber must manually enable the PrimeTime Anytime feature that automatically records primetime network programing for up to eight days.
“If the customer does not enable the PTAT function, the Hopper will not record ABC’s (or any other network’s) television programming,” Swain wrote.
Referring to a previous Second District Court decision regarding infringement of Cartoon Network programming, Swain said the pivotal factor in the Hopper case is the initiation of copying versus the selection of offerings for possible copying.
“There is, thus, no factual basis upon which Dish could be found liable for direct infringement of ABC’s right of reproduction,” she wrote.
Swain said the PrimeTime Anytime constitutes fair use among Dish subscribers, and is not a VOD service, which ABC, CBS and Fox have alleged.
“Although more technologically advanced than previous DVRs, the Hopper is, at its core, another type of home recording device,” she wrote, adding that ABC executives have testified that DVRs boost the C3 ratings for its programming. C3 refers to the three days after initial broadcast Nielsen tracks viewers. It is believed that Nielsen will soon extend that to seven days, or C7.
The networks use that data to sell advertising, which amounts to about $60 billion in revenue annually.
BTIG Research analyst Richard Greenfield said Swain’s ruling (and others) bodes well for Aereo TV’s separate litigation challenges, in addition to the increased rollout of cloud-based data storage.
With multichannel video program distributors, like cable, satellite and telecommunication migrating to cloud-based storage for their broadband platforms, new software companies such as Commercial Break are marketing technology that functions similar to AutoHop.
“While commercials are critical to television industry profitability, we doubt many consumers actual enjoy ads, particularly with an ad load of 22-plus minutes every hour,” Greenfield wrote in a Sept. 26 blog.
Indeed, Dish’s AutoHop is reportedly at the center of retransmission negotiations going on between the satellite TV provider and The Walt Disney Co.’s television unit.