Networks Don’t Like Dish’s Commercial-Skipping Auto Hop – But Try Convincing Viewers It’s Bad

Viewers may not appreciate the ad-skipping technology if they end up paying more for Dish

The least popular thing on TV is Dish's new ad-skipping feature Auto Hop — at least among network executives. But that doesn't mean viewers won't embrace it.

The question is whether they'll still like it if it leads to higher Dish bills. Or — if things go completely wild — less access to their favorite shows.

Also read: Dish Dropping AMC Networks After Legal Setback

Neither are likely to happen soon, especially since the new feature (see photo of ad, left) is a mere week old and unknown to most viewers. It's still unclear what effect, if any, it will have on network viewing.

But networks consider it enough of a threat to their traditional model to bash it this week, in comments that may have actually raised its profile among the audiences they hope will not embrace it.

"They can’t just take our signal and change it and put on a black spot where our commercials were," CBS CEO Leslie Moonves told reporters Wednesday.

Dish got a blast of free publicity — albeit negative publicity — by announcing the feature last week, just before the networks began introducing their 2012-13 slates at this week's upfront presentations to advertisers.

At the very first upfront, NBC broadcasting chairman Ted Harbert kicked off days of Hop-bashing by telling advertisers it was "an insult to our joint programming."

The feature allows viewers to skip commercials when they watch ABC, CBS, Fox and NBC shows the day after they air or later. In doing so, it helps viewers stray even further from their traditional covenant with advertisers: They get free broadcast TV and have to watch commercials in exchange.

That agreement has been under threat for decades, first with VCRs and now with DVR. But Auto Hop is especially threatening because it allows viewers to automatically skip all ads, without actively fast-forwarding or skipping ahead. When they watch a show the day after it airs or later, they only need to enable Auto Hop one time to pretend, for a short while, that they live in an ad-free world.

Dish notes that the network has offered a 30-second skip feature for years, and says the Auto Hop feature comes in response to consumer demand for an ad-skipping feature. (Those who still want to watch ads don't have to use Auto Hop.)

"Viewers have been skipping commercials since the advent of the remote control," Dish CEO Joe Clayton said in a statement. "We are simply making it easier."

The question now is what networks can do about it. Neither networks nor Dish would comment.

"All I want to say at this point is that we are evaluating the technology, but it's tremendously disappointing that Dish has chosen to market a product with the goal of destroying the fundamental underpinnings of the broadcast television ecosystem," Fox spokesman Scott Grogin told TheWrap.

But networks could try to make up for lost ad revenue by demanding that Dish TV, the second-largest satellite TV provider with about 14 million customers, pay higher fees to air their programming. Those costs could then be passed on to — you guessed it — Dish customers. (If that happens, some of them might suddenly have a new appreciation for the old "watch the commercials" model.)

It's much too soon to say that will happen, however. Dish contends that it already pays high rates for retransmitting networks and has agreed in recent years to significant increases.

Dish also says Auto Hop may actually help networks.

Auto Hop is part of Dish's Hopper Whole-Home DVR set-top box, which allows people to access DVR-ed shows from any TV in their home. Clayton said the Hopper’s PrimeTime Anytime feature allows viewers, with one click, to record all primetime shows from the four networks in HD. He said it appears that the feature is leading to more viewing of primetime shows.

If that leads more people to tune in in real time, that's good for networks. But it's not much help if they only watch the shows on Dish, ad-free, the day after they air.

Peter Rice, chairman of the Fox Networks Group, called it "a strange thing to do," and said Fox was "still evaluating it." ABC entertainment president Paul Lee said the network is "not supportive of anything that doesn't support our advertisers."

Despite networks' discomfort about Auto Hop, all their public mentions of it could help promote it.

Networks have talked tough about the feature in part to align themselves with the advertisers to whom they are trying to sell ads these week.

But viewers also pay attention to the upfronts — or at least press coverage of new shows and trends. The executives' remarks have helped publicize Auto Hop to a wider audience, and that could lead to more people signing up for Dish to take advantage of it.

Could the dispute reach the point that Dish and the big broadcasters will stop doing business together? That's highly unlikely, given the networks' dominance of the TV landscape. But Dish has threatened to stop offering smaller channels.

The spat with the four networks comes as Dish is also feuding with AMC Networks, which it says it will drop when their contract ends next month. Voom HD, an indirect subsidiary of AMC Networks, is suing Dish for $2.5 billion for breach of contract, though Dish says it is dropping AMC because of high rates and low ratings, not because of the lawsuit.