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Fox Files Lawsuit Against Dish’s Ad-Skipping DVR

24 May, 2012 By: Erik Gruenwedel

Dish Network countersues Fox and other major networks

Twentieth Century Fox Film Corp., Fox Broadcasting and Fox Television Holdings May 24 collectively filed a lawsuit against Dish Network LLC alleging breach of contract and copyright infringement regarding the satellite TV operator’s ad-skipping DVR.

The suit filed in U.S. District Court in Los Angeles alleges Dish’s rollout of the Auto Hop DVR service jeopardizes the future of free over-the-air television, among other charges.

“We were given no choice but to file suit against one of our largest distributors, Dish Network, because of their surprising move to market a product with the clear goal of violating copyrights and destroying the fundamental underpinnings of the broadcast television ecosystem,” the complaint reads.

Auto Hop allows Dish subscribers to automatically skip television ads on primetime network programming recorded in high-definition. The technology does not allow viewers to skip ads during the initial broadcast.

Regardless, reaction from TV executives has been swift and blunt. NBC Broadcasting president Ted Harbert called Auto Hop an “insult” to the TV ecosystem, while CBS CEO Les Moonves characterized the service as “illegal,” adding it undermined the network’s ability to produce primetime programming.

Meanwhile, Dish has filed a lawsuit against Fox, NBC, ABC and CBS in U.S. District Court in New York claiming the Auto Hop technology is no different than fast-forwarding conventional programming on a DVR.

In its countersuit, Dish contends the Auto Hop remains in compliance with its agreements with the networks. The satellite TV operator said monthly subscriber fees include significant “retransmission fees” that it pays to the major networks. With broadcasters making much of their content available for free on websites such as Hulu, Dish said they continue to “demand” substantial increases in their retransmission fees.

“Consumers should be able to fairly choose for themselves what they do and do not want to watch,” David Shull, Dish SVP of programming, said in a statement. “Viewers have been skipping commercials since the advent of the remote control; we are giving them a feature they want and that gives them more control.”

Dish’s suit included NBC, ABC and CBS after the three networks refused to carry ads touting the Auto Hop.

“We respect the business models that drive our industry, but we also embrace the evolving nature of technology and new ideas,” Shull said. “Advances in the ability to measure and target viewership will give the entire industry — including advertisers — the ability to develop better programming, more effective advertising and deliver an overall better experience to the viewer.”

The executive said the majority of viewers watch primetime shows live or during the same evening - the time that is most coveted by advertisers. Shull said the Auto Hop only works when activated by the viewer. He said the response by networks has been extreme.

"Will the networks next ask consumers to stop changing channels?" Shull said.

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