Broadcast Wars: Here’s Why Networks and Dish Won’t Give In

Gannett (NYSE:GCI) and Dish Network (NASDAQ:DISH) may have resolved their most recent battle, but the war is far from over. Broadcasting power Gannett, which has ABC (NYSE:DIS), NBC (NASDAQ:CMCSA), and CBS (NYSE:CBS) affiliates, has vowed it will not rest until something is done about Dish’s controversial AutoHop feature, which allows viewers to enjoy network primetime shows without having to sit through commercials – only one day after they air.

The two sides managed to reach an agreement in the eleventh hour that will allow Dish to continue retransmitting Gannett’s stations, narrowly avoiding what would have been a blackout for Dish customers in 19 cities nationwide. The terms of the deal were not disclosed, but Gannett has made it clear the issues over AutoHop have not been put to bed.

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CBS Chief Executive Leslie Moonves put it plainly while speaking at a conference for investors earlier in the month: “AutoHop cannot exist.”

Networks fear the ad-skipping DVR feature could threaten the foundation of the TV broadcasting business model, which is supported by advertisement commercials. A rep for one broadcaster said that if Dish is going to continue offering its customers the ability to circumvent ads then “something will have to give.”

And broadcasters are doing everything they can to make sure that happens. In addition to taking a hard stance and demanding more money in negotiations of retransmission deals, networks have taken to the courts, suing Dish for copyright infringement. News Corp.’s (NASDAQ:NWSA) Fox has even filed a request for an injunction that would halt AutoHop altogether. The U.S. District Judge presiding over that case has heard both sides’ arguments and is expected to issue her ruling soon.

Dish, on the other hand, is defending its divisive DVR technology, arguing that it is ultimately the viewer who decides to skip the advertisements. “Viewers have been skipping commercials in the privacy of their own homes for generations,” said Dish VP of Programming David Shull. “Gannett is stifling innovation and crushing customer choice and control. That’s insulting to our subscribers, and we won’t stand for it.”

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