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Dish CEO on Ad-Skipping DVR: 'We Have Already Won'

8 Aug, 2012 By: Erik Gruenwedel



Dish Network and several major television networks may be headed to bi-coastal courtrooms in the fight over the satellite TV operator’s controversial ad-skipping DVR, but to consumers the technology is a winner, CEO Joe Clayton told analysts.

Speaking Aug. 8 in a conference call to discuss Dish’s second quarter results, Clayton said rollout of The Hopper DVR with the AutoHop ad-skipping feature furthers a practice that consumers have embraced since the introduction of the remote control.

He said AutoHop was instrumental in Dish posting a quarterly net subscriber loss of just 10,000 members, which was substantially lower than any other multichannel video program distributor in the quarter.

Clayton said Auto Hop has won immediate praise from consumers and “hell and damnation” from the major broadcasters. He said giving consumers the option to skip ads on recorded — not live — primetime TV shows is a good selling tool and a prerequisite to the bottom line with Dish not raising prices on its bundled program choices.

Dish’s DVR household penetration is expected to increase 22% by 2016 to 11.7 million units, compared with 9.6 million units this year, according to new research from IHS Screen Digest.

The Hopper DVR is expected to add 600,000 units a year in 2013 and 2014, slowing to 500,000 units in 2015 and 400,000 units in 2016. The Hopper is projected to add 700,000 units this year from 2011. Dish’s DVR shipments are second only to those of DirecTV, and are ahead of rivals such as Comcast and Time Warner Cable.

AutoHop technology allows subscribers to voluntarily skip advertising on recorded — not live — primetime network programming. Because of this, Fox Broadcasting, NBC Universal and CBS Corp. filed separate lawsuits May 24, alleging a breach of terms in the licensing deals that allow Dish to retransmit their network feeds. The lone holdout, ABC Networks, did not immediately file suit, but parent company Disney CEO Bob Iger has said publicly that Dish’s action “feels like a bite to the hand that feeds you.”

The networks’ suits will be heard in a Los Angeles courtroom.

Dish, in turn, filed a suit against the broadcasters, including ABC, alleging they conspired to thwart the satellite operator’s marketing of the Hopper, in addition to preventing rollout of technology allowed under provisions of the “Betamax” court ruling decades ago.

The 1984 Supreme Court ruling, which reversed the appeals court decision, ruled in favor of Sony’s Betamax DVR allowing consumers for the first time to record TV broadcasts.

Dish’s suit will be heard in a New York court in Manhattan.

“We do not know how the courts will rule on AutoHop, but we do know that we have already won in the court of public opinion,” Clayton said.


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