Business Models

by Karl Bode

Filed Under:
dvr, hopper, television

abc, dish networks

Dish Cripples Hopper For ABC In Exchange For Internet Streaming Rights

from the tit-for-tat dept

Not long ago, Dish Networks introduced a new DVR called Hopper that tries something rather unique: it actually offers features that make users happy, such as the ability to automatically skip ads (something users were doing anyway). Once again claiming that giving consumers what they want would destroy the TV universe as we know it, broadcasters quickly responded by suing Dish and claiming that Hopper's ad-skipping technology violated copyright. The cases haven't been particularly successful for broadcasters, who've found themselves swatted back by the courts on several key issues.

Now Dish has struck a new long-term programming deal with ABC that will lock down Hopper's ad-skipping technology so it can't be used on new episodes until three days after they air. In exchange, ABC will immediately agree to drop their lawsuit against Dish. It's unfortunate that Dish chose to buckle and make Hopper less useful to consumers, and restricting functionality only acts to make the TV viewing experience even more fractured and confusing than it already is. Which content will ad-skipping work on? Which online streaming service has locked down the exclusive contract for content I enjoy?

On the other hand, a statement by Dish indicates that the company didn't walk away empty handed; they appear to have used ad-skipping as leverage to get broader licensing for an online TV service that may or may not ever launch:
"The extensive and expanded distribution agreement grants DISH rights to stream cleared linear and video-on-demand content from the ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN and ESPN2, as part of an Internet delivered, IP-based multichannel offering."
As we've covered at length, the highway of Internet TV innovation is littered with countless corpses of failed Internet TV efforts, none of which could secure the licensing rights to make their ambitions work. While it's important that Dish has secured some Disney licensing rights, it's ridiculous that the company had to make useful hardware less useful in order to do so. Still, in a statement Dish CEO Joe Clayton slathered ABC with a heaping helping of platitudes:
"The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner. Not only will the exceptional Disney, ABC, ESPN entertainment portfolio continue to delight our customers today, but we also have a model from which to deliver exciting new services tomorrow."
Yes, nothing quite says visionary like suing over a feature that simply helps consumers by automating something they were already doing. If Dish strikes similar deals with their new "forward-leaning" broadcast friends we'll never see the lame broadcast argument that ad-skipping violates copyright truly tested in court, preventing useful precedent for future cases. In that sense, Dish struck a short term deal they find useful, while potentially harming innovation long term.

As for this all being worth it because of Dish getting online streaming rights, we can't see the deal specifics, so it's unclear what kind of obnoxious restrictions ABC placed on the streaming content to prevent Dish's over the top service from being truly disruptive (like broadcasters have done repeatedly with Hulu). There's also nothing that guarantees other broadcasters are willing to follow suit with similar deals, since most of them remain utterly terrified of over the top (OTA) TV. A Disney-only online streaming service would be highly limited, and all consumers got in exchange was a DVR that does less than it did before. Visionary, indeed.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Mar 5th, 2014 @ 3:42pm

    This makes a lot of sense from Dish's perspective. If they had won in court, collateral estoppel would prevent Dish from suing any competitor who launched a similar product. By settling, Dish gets to keep a watered-down version version of hopper while deterring any competitors from launching a similar product, lest they be sued by ABC.

    reply to this | link to this | view in thread ]

  2. identicon
    SlinkySlim, Mar 5th, 2014 @ 4:30pm

    smoke stacks

    Pirate factory operating at full capacity I see. 24/7/365 pirate production facilities fully staffed by a dozen fat white guys making as much as an entire village. Bravo. Keep 'em coming fellah's.

    reply to this | link to this | view in thread ]

  3. icon
    Dave (profile), Mar 5th, 2014 @ 6:27pm

    This deal could be a strike at Comcast.

    Consider this:

    1.) The Comcast-NBCU merger practically prevents NBC from withholding its programming from other services, but even if it didn't, if Dish wants to settle on similar terms with NBC, Comcast can't afford to be viewed as a holdout. Any appearance that Comcast abusing their market position could convince regulators to block the buyout of TWC.

    2.) Should Dish get this IPTV service off the ground, Charlie Ergen could go in front of the press (and Congress) and claim that Comcast's data caps are anti-competitive, because they prevent Comcast Internet customers from using Dish. That could force Comcast to concede on data caps to get the TWC acquisition through.

    3.) In terms of the marketplace, Dish has a long-term partnership with Frontier Communications to be the TV portion of their "triple play" package, but Frontier can't offer that package to apartment dwellers who can't put up a satellite dish. If Dish gets this IPTV service working, that changes, and those renters who hate Comcast and TWC can have a legit alternative for TV service.

    I don't know about you, but I'm okay with losing Auto-hop if it means either putting the kibosh on data caps, blocking the Comcast-TWC merger, or costing either of them a large number of customers.

    reply to this | link to this | view in thread ]

  4. icon
    pixelpusher220 (profile), Mar 5th, 2014 @ 9:00pm


    maybe from Dish's perspective, but not from their *customers*.

    That said, Tivo still totally allows you to program a 30 second skip into it. Watch show, click 6 times, continue watching show.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, Mar 5th, 2014 @ 9:07pm

    Re: This deal could be a strike at Comcast.

    You're assuming that the Comcast executives are rational people, rather than the siciopaths they appear to actually be.

    But it's not their fault, it's just capitalism at work.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, Mar 6th, 2014 @ 4:57am

    They are traitors and should never be given financial support.

    reply to this | link to this | view in thread ]

  7. identicon
    Isma'il, Mar 6th, 2014 @ 10:33am

    Ditch the Hopper

    and the extra fees that go along with it. Instead buy your own DVR and zap commercials off of any channel. I got one for my DirecTV box and it works great. It also has a DVR-DVD transfer function if I ever want to keep anything I record.

    reply to this | link to this | view in thread ]

  8. identicon
    Anonymous Coward, Mar 6th, 2014 @ 12:14pm

    On the contrary, I think these negotiations with Dish give hopper legitimacy in that the networks have recognized Dish's right to provide the feature by using it as a bargaining chip at the negotiating table. Frankly this should open the proverbial flood gates on third party DVRs and Tuner software integrating similar features (at least until the inevitable patent trolls show up).

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, Mar 6th, 2014 @ 12:16pm

    Re: smoke stacks

    Pirates work on ships, silly.

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, Mar 6th, 2014 @ 12:17pm

    Re: Re: This deal could be a strike at Comcast.

    Considering Comcast owes its current market position to government favors I don't think your statement could be less accurate.

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, Mar 7th, 2014 @ 6:26am

    Re: smoke stacks

    You are a moron. Skipping ads for products you never intend to buy is not piracy. I would also like to point out that in some third world countries, people in villages may make no money.

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, Mar 7th, 2014 @ 12:30pm

    Re: Re:

    DirecTV DVRs offer the same feature, though its "hidden" (undocumented).

    reply to this | link to this | view in thread ]

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