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Dish's AutoHop is about leverage as much as it's about skipping ads

November 08, 2012|By Joe Flint
  • CBS Chief Executive Leslie Moonves says the network has to make money through advertising in order to provide quality programming.
CBS Chief Executive Leslie Moonves says the network has to make money through… (Associated Press )

CBS Chief Executive Leslie Moonves has not been shy about his ill feelings towards the AutoHop, a new feature from satellite broadcaster Dish Network that makes skipping ads in TV shows recorded off of ABC, CBS, NBC and Fox as easy as pushing a button.

"I can't produce premium shows like 'CSI' without advertising," Moonves told the Los Angeles Times this year. He reiterated that thought on a call with Wall Street analysts Wednesday saying, "the fact of the matter is, we produce content and need to get paid for it."

But every man apparently does have his price, even Moonves. S&P Capital analyst Tuna Amobi asked Moonves on the call if there were "any scenarios where you might consider trading off advertising revenue if you felt that you could be adequately compensated by pay TV affiliate operators that are offering ad skipping functionalities?”

"I suppose if Dish wanted to pay us $5 a sub, we might consider letting them do that," Moonves responded.

Although Moonves was being flip, his remark points to what this battle is really about -- and it's not just skipping commercials.

Dish's AutoHop works only on the four big broadcast networks even though cable television has a lot more commercials per hour on average. Dish has said the AutoHop feature on its digital video recorder works only on broadcast shows because those are the most popular programs. But many cable programs have audiences as big as broadcast shows.

This is really about leverage. Broadcasters such as CBS are seeking higher payments from pay-TV distributors such as Dish. The AutoHop gives Dish leverage to try and lower so-called retransmission consent fees.

Negotiations over the AutoHop will likely have to wait until the law weighs in. CBS, NBC and Fox have sued Dish claiming the AutoHop violates copyright infringement. No trial dates have been set. On Wednesday, Fox's request for a preliminary injunction to stop Dish from offering the AutoHop was denied.

Dave Shull, Dish's senior vice president of programming, said Moonves and other broadcasters "would do well to tune into the consumer. Give the customer choice and control, give the customer a better experience and you will win every single time."

The choice CBS and others may ultimately make though will be to not sell programming to Dish.

ALSO:

Fox's request for preliminary injunction against AutoHop denied

Battle over Dish Network's AutoHop isn't just about commercials

Broadcast networks heading to court over Dish's AutoHop feature

Follow Joe Flint on Twitter @JBFlint.

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