Dish Network today announced a new Auto Hop feature, which will enable customers to play a video without commercials starting the next day (1 PM EST) after recording of content. This feature works on its PrimeTime Anytime service – the capability to simultaneously record the four major networks (ABC, NBC, CBS and Fox). Technically, it appears to have technicians / editors manually entering (or verifying automated detection) of commercial breaks from an operators center.
Skipping ads in DVRs is nothing new - TiVo’s original implementation of commercial skipping (via a 30-second jump) was changed into a fast-forward to provide customers with some exposure to advertising. Just over a year ago (in May 2011), Dish and Echostar settled their patent dispute with TiVo, giving them rights to use this technology.
Dish Executives, in a conference call about the feature, appear to be looking for a compelling message to resonate with consumers. Dish was successful at adding a significant number of subscribers in the first quarter (104K subscribers), although it experienced a significant drop in profits. Further – its current subscriber count is still lower than that of a year ago (14.056 versus 14.191M), despite an overall growing satellite market in the US and worldwide.
It is clear that this feature will raise the ire of broadcasters (and their advertising customers) – and they will pursue legal challenges to the feature. Dish appears ready to fight this – although another legal fight will further drag down profit unless it is highly successful at attracting new customers. Cable and Satellite companies rely on the good graces of broadcasters, notably during retransmission consent negotiation. Dish will find itself unwelcome at the table by taking the customers’ side in this battle.