Dish Cuts Out Ads, and Broadcasters Aren’t Happy

Dish Network Corp’s (NASDAQ:DISH) introduction of “AutoHop,” an innovative technology that allows viewers to skip ads, has not gone down well with TV broadcasters.

Don’t Miss: A.M. Radar: BlackRock Ups CHK Stake, VeriFone’s Stock a Victim.

Fox (NASDAQ:NWS), NBC (NASDAQ:CMCSA), and CBS (NYSE:CBS) sued Dish Thursday for introducing the service, which allows top rung customers to download the last eight days of prime programming from ABC, NBC, CBS and Fox and watch without commercials.

According to Fox, the service is unauthorized, a violation of a licensing agreement between the two companies, and has the potential to destroy the advertising-supported ecosystem that is the foundation for TV programming.

NBC and CBS also filed suits on similar grounds. According to NBC, “Dish simply does not have the authority to tamper with the ads from broadcast replays on a wholesale basis for its own economic and commercial advantage.”

CBS stated, “This service takes existing network content and modifies it in a manner that is unauthorized and illegal. We believe this is a clear violation of copyright law and we intend to stop it.”

Interestingly, Dish responded with a counter-suit filed in a New York federal court seeking judicial clearance of the technology. According to Dish, the innovative service does not violate copyrights and is very popular with subscribers.

Further, the service is not very different from the manner in which customers use their DVRs. Dish’s senior vice president of programming said in a statement: “Viewers have been skipping commercials since the advent of the remote control — we are giving them a feature they want and that gives them more control.”

Don’t Miss: Will Morgan Stanley Help the Disgruntled Facebook ‘Little Guy’ Investor?