TV networks sue Dish Network over a commercial skipping feature called 'Auto Hop'

Well there's a drama a-brewin over in TV land. Recently, the Dish Network announced a new feature for cable subscribers dubbed "Auto Hop." The feature enables users to automatically watch recorded shows without having to watch any of the commercials. Not surprisingly, the networks are anything but thrilled.

Well there's a drama a-brewin over in TV land. Recently, the Dish Network announced a new feature for cable subscribers dubbed "Auto Hop." The feature enables users to automatically watch recorded shows without having to watch any of the commercials.

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Naturally, content providers were incensed given that money from advertisements is what enables content providers to fund programming, and, of course, generate profits.

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In the wake of Dish's announcement, they were served with lawsuits from the parent companies of CBS, Fox, and NBC this past Thursday.

CNN reports:

In a damning court filing, Fox chastised Dish Network for its "bootleg broadcast video on-demand service" that makes "an unauthorized copy" of the entire primetime broadcast schedule. Fox said AutoHop "will ultimately destroy the advertising-supported ecosystem."

Meanwhile, CBS added that Dish's Auto Hop feature will deprive them "a vital means of payment for their works."

While it's easy to sit back and not feel one once of pity for advertisers or the networks, it's important to realize that without ads, there would be no Mad Men, there would be no Breaking Bad, there would be no 30 Rock, etc.

Granted, it's easy to skip over commercials these days with DVRs, but if you give users the option of watching TV completely devoid of ads entirely, with no need to even fast forward through commercials, TV may start to become a whole lot less interesting than users might imagine.

Or, perhaps, networks would try and recoup those lost advertising dollars by raising the price of DVDs or streaming costs.

Admittedly, I fast forward through my fair share of commercial programming, but I can't say I don't see where the networks are coming from.

Notably, the Auto Hop feature is only activated the day after a program airs. So if you want to watch Sunday's Simpson's episode, you'd have to wait until 1 am on Monday morning. And given that 82% of network programming and 90% of cable TV programming is watched on the day a program airs, some are arguing that the Auto Hop feature will have a negligible effect on advertising viewership and rates.

Analyst Tony Wible of Janney Capital Markets went so far as to say that only "1% percent of advertising revenues is at risk, given the viewing patterns and low penetration of the [Auto Hop] technology.”

So maybe all of this is much ado about nothing.

But what if Auto Hop type features become standardized across many cable providers? What if DirecTV implements something similar next year? What if the recorded shows will become watchable without commercials just two hours after first airing?

It's clearly to early to tell if Auto Hop will have any discernible impact on the bottom lines of networks, but it's not hard to see where they're coming from and why they're so concerned.

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