JESSELL AT LARGE

Take Your Cue From Moonves: Skip Dish

All broadcasters should follow the lead of CBS's Leslie Moonves and threaten to use their retrans clout to come down hard on Dish Network and the Auto Hop commercial-skipping feature of its Hopper DVR. Allowing subscribers to skip all spots in recorded programs at the touch of a button is a broadcasting killer.

“Hopper cannot exist,” CBS CEO Leslie Moonves told investors at the Bank of America Merrill Lynch Media Conference Wednesday. “If Hopper exists, we will not be in business with [Dish]. We cannot produce episodes for $3.5 million apiece and have the people at Dish say they will pull out the commercials. We will not be on Dish. We will go elsewhere.”

The message to Dish is clear: Stop marketing the Auto Hop feature on the Hopper mega-DVR that automatically zaps TV commercials or be prepared to stop including the CBS O&Os in its satellite TV service after the current retrans deal expires.

I think he was also sending a message to CBS affiliates and perhaps the affiliates of other networks. They, too, should cut off Dish at retrans time if its persists with Auto Hop.

Moonves can’t sit in a room with CBS affiliates and conspire to set common retrans terms. But he can make a public statement and broadcasters can read it and act accordingly.

That’s the American business way, made famous in TV by John Malone during his reign as the king of cable in the 1990s. He would make a comment at a press conference and every other cable operator would know what to do next. That’s one of the reasons that broadcasters went without retrans fees for more than a decade.

So, let’s put this on a bumper sticker: “Skip Spots, Skip Dish”

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Got it? Good.

It would help, by the way, if other broadcasters would publicly state that they won’t do business with Dish until it dumps the Hopper ad-zapper. It would let Moonves know he is not alone and let Dish know that it may have created a bigger mess than it figured.

Remember, Dish Chairman Charlie Ergen is a gambler and he does hold some cards — 14 million paying subscribers that collectively account for 12% of TV homes.

His instinct will be to bluff his way through this. At a New York press conference the day after Moonves spoke, Dish Network CEO Joe Clayton began that process. “Let me say this to Mr. Moonves and the broadcasters, they would be well advised to tune into the consumer,” Clayton said at press conference yesterday.

Clayton added in an interview: “Mr. Moonves feels that he can bully the consumers and that he can bully his programming partners. I don’t think that plays well.”

Isn’t that a hoot? Dish portraying itself as the champion of the people and a victim of bullying.

The concern for consumers is a little ironic given that the FTC just filed suit against Dish for alleging badgering millions with telemarketing calls even after they asked to be on do-not-call lists.

And Ergen & Co. is anything but a victim. Among the last of the great media entrepreneurs, he made billions with highly aggressive legal, regulatory and marketing tactics that sometimes not only went beyond accepted business practices, but sometimes beyond the law.

For nearly a decade, until a federal court finally shut him down in 2006, Ergen flagrantly flouted a law barring satellite operators from importing distant broadcast signals into a market if local affiliates were available.

He was only allowed back into the distant signal business in 2010 after promising in a settlement to distribute local TV signals in all markets.

Over the past two years, Dish has been involved in nearly half of the 45 program blackouts in the wake of carriage talks gone bad. In almost all the cases, the broadcasters involved are small groups in small markets without much clout. But then, bullies rarely pick up someone their own size.

Of course, the worst kind of bully is the one that runs off to complain to the grownups about those it can’t push around. Dish is the worst kind. It is stomping around Washington these days contending that paying broadcasters — as it has been paying cable networks all these years — is an intolerable and crushing burden.

Hopper isn’t all bad. Giving subscribers a single button that allows them to record all of primetime of the Big Four networks might work in the networks’ favor. But also giving them a single button that automatically skips all the commercials completely undermines the broadcasting business model that still mostly relies on people watching commercials. If Dish gets away with it, others will follow.

I know, broadcasters raised similar alarms about VCRs and earlier generations of DVRs, and in retrospect they were too shrill. But this is clearly different. The Hopper auto-zapper is a broadcasting killer if it becomes pervasive.

The fate of the Hopper will not be determined solely in the marketplace. Dish and the broadcasters have squared off in the courts. But the courts move slowly and where they will come down is anything but certain. Unbelievably, they just allowed Aereo to move ahead with its wacky scheme for distributing TV stations on the Web without permission of the stations or other copyright holders.

The thing for affiliates to do in the case of Dish is to follow the lead of Les and fight this out across the retrans negotiating table. The affiliates can win if they believe Dish needs network programming more than they need Dish distribution.

All together now:  “Hopper cannot exist.”

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.


Comments (16)

Leave a Reply

Matthew Castonguay says:

September 14, 2012 at 3:50 pm

DISH says broadcasters would be well advised to tune into the consumer. That’s really rich, coming from a company with such absymal customer service.

    Christina Perez says:

    September 16, 2012 at 9:55 pm

    And yet Dish Network advertises “The Hoppah” in those entertaining commercials featuring working class families with deep Boston accents…. go figure.

Manuel Morales says:

September 14, 2012 at 3:59 pm

I think the answer is simple- Push my signals though Autohop? $3/sub. Leave them alone? $2/sub. Again, it costs money to produce programming so if the ads are being skipped and Charlie and Co expect a good product the lost ad revenue will have to come from somewhere.

Jeff Groves says:

September 14, 2012 at 6:39 pm

If Dish wins their case (I’m certain this will go all the way to the US Supreme Court) I suggest they apply itn ton ALL the Channels both Over-The-Air AND Cable. I’m certain the other Pay-TV Providers will follow suit, and someone will make a system INDEPENDANT of the Pay-TV Providers. Maybe then will advertisers realize people don’t want obnoxious commercials stuffed down their throats, and we also have better things to do than cope with 20+minutes of commercials per hour.

    Teri Keene says:

    September 14, 2012 at 8:49 pm

    20+ minutes of commercials per hour. Wow, sounds like radio.

Gregg Palermo says:

September 14, 2012 at 11:31 pm

Broadcasting is so 20th century. The sooner the FCC pulls the rug out from under them, the better for consumers who don’t want commercials. Give the spectrum to the phone companies, who need it more and are willing to pay for it. It’s hard to have sympathy for an industry whose market share is so shriveled up since the 1980s.

Mike Brown says:

September 15, 2012 at 1:20 am

Well Harry, while I was not surprised to read your anti-Hopper/DISH comments, I can only hope that most broadcasters will be more “forward-thinking.” Local broadcasters had better thing long and hard before “going nuclear” and holding DISH and its consumers hostage over the Hopper. Such a short-sighted move can only lead to a massive public outcry against the local broadcaster…and remember — Charlie is a Master Gambler — he would love nothing more than to “Go All-in” on this one — backed with millions of consumers who could care less about the antiquated “broadcast Model” — they could well pressure Congress to drive a stake into the heart of Retransmission Consent once and for all.

For my part, I hope the “Dream Team” of Charlie and Joe Clayton sell millions of Hoppers while the networks continue to spend countless piles of money on lawyers in a multi-year battle against the Hopper.

Broadcasters can “live the dream” that the world of the 1950’s (and the 1950 consumer mentality) still exists — or they can “wake up” and focus on how to move their operations out of the Stone Age and into the world of multiple screens and “TV Everywhere.”

The choice is yours — evolve fast or just flip the switch on the transmitter and fade into the sunset…

Harry W. Thibedeau
25+ year satellite industry professional

kendra campbell says:

September 15, 2012 at 8:47 am

I can’t imagine actually watching a program (other than a major sporting event) without recording it first and skipping commercials. Broadcasters/Cable have done their best to drive folks away with the awful commercial glut.

Hope Yen and Charles Babington says:

September 15, 2012 at 9:17 am

I recently proposed an electronic system that would allow the consumer to select any repetitive audio material for automatic muting. This would permit bleeping out the audio from whatever commercials the consumer no longer wished to hear. Such a system, expanded to include video, would partially reduce commercial penetration, but would require active input/programming from the consumer. Such an idea as this would doubtless be expandable to accomplish the auto-hopper ‘effect’. An interesting dilemma – signs that the waves in the sea of retrans are far from calming down!

Ashley Messina says:

September 16, 2012 at 8:00 pm

If the viewing is completely ad-supported, Moonves is right. But, where any money whatsoever changes hands from the viewer to the broadcaster to allow the viewer to receive the signal, Moonves is wrong. Moonves is right where re-trans fees are not involved. But, he’s very wrong where they are. He needs to decide which side of the table to eat from.

Bill Greep says:

September 17, 2012 at 8:32 am

I think Harry is “spot on” as usual. Broadcasters need to unite against DISH and understand that there is a legitimate reason why Time Warner passed on the very same technology (2 years ahead of DISH) because they recognized the potential disruption… including to their very own model. We take for granted our free over-the-air option, but ask those who cannot afford cable/dish systems how important it is to them. Those pushing this want the TV 2.0 version with shows only available over HULU-NETFLIX options and they don’t realize that the costs will skyrocket. All sports will be pay-per-view and those who cannot afford all of this will be out of luck. Broadcasters… Back Harry’s idea and send a message to those who challenge the current model.

Jay Miller says:

September 17, 2012 at 10:32 am

Hey Rustbelt Alumnus..Sounds like your a broadcasting dinosaur from the 70’s!. Probably never sold a commercial in your life . Stay in the Rustbelt will you???

Ellen Samrock says:

September 17, 2012 at 1:36 pm

Obviously Charlie Ergen feels that what he’s paying CBS in retrans gives him the right to do this and their may be nothing contractually which prevents him from doing it. This means any future negotiations in retrans agreements involving the networks will have to include a clause that prevents commercial hopping technology.

Roger Lyons says:

September 18, 2012 at 12:44 pm

Dish has over 13 million subscribers. The Hopper DVR has been out for six months. I’m pretty sure less than a million of their subscribers have the Hopper (and not every one of those subscribers have Auto-Hop, which is not automatic, activated). Pulling your station just because of a technology a fraction of their subscribers have (and many DVR users still skip commercials manually) is short-sighted and only hurts the broadcaster. Then again, their dreams of Mobile DTV succeeding are just that as well.

Ida Anderson says:

September 20, 2012 at 12:27 pm

Broadcasters do not have a constitutional right to have commercials viewed. And yes, Les might not be able to produce 22 episodes of CSI at 3.5 million each. So find a different model. Broadcasters used to make 39 new episodes a year and they worked it out so they could make fewer. The technology isnt going away or have you failed to learn that after all these years?

Sue Nunez says:

September 25, 2012 at 8:16 pm

I have been using the Auto Hop ever since this guy in my office at DISH showed me how it works. Now that I skip commercials so I can have enough time to watch the news and get the kid’s lunches ready in the morning Moonves would have me believe that is illegal? Who would honestly entertain the thought of making a law that forces people to watch commercials? Bulling is exactly what it sounds like Moonves is doing and I am happy DISH won’t let them bully 12% of American homes.


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