A row has erupted in the United States over a set-top box that allows viewers to skip adverts in recorded television programs. America’s three largest broadcasters – Fox, NBC and CBS – have filed individual lawsuits against Dish Network, America’s second largest satellite broadcaster and the maker of the set-top box, in a court in Los Angeles. At the beginning of 2012, Dish Network launched its new digital video recorder called ‘The Hopper’, but only recently, on 10 May, an ‘auto hop’ application was added, which allows viewers to skip commercials that interrupt their recorded shows. The broadcasters claim ‘hopping’ is against the law because the device turns the recorded show into an unauthorised version of a program that is copyrighted. Fox said the legal effect of ‘The Hopper’ should be classified as ‘re-broadcasting’ and is therefore infringing the channels’ copyrights. Fox Spokesman Scott Goggin even added The Hopper could end up “destroying the fundamental underpinnings of the broadcast television ecosystem”.
Dish on the other hand claimed in its countersuit ‘this case is about freedom of consumer choice; individual families’ choice to elect, if they want, to time-shift their television viewing and watch recorded television without commercials’. Around eight million Dish subscribers in the US currently have the ‘ad hop’ recorder, which represent only 6% of the broadcast market in the US. Industry experts, however, were not surprised by the broadcasters’ fierce reaction to The Hopper. Their biggest fear is the technology will spread to other operators. Devices like these and the rise of online TV are seen as huge commercial threats for traditional television stations. If technology such as Dish’s top box were widely deployed, some industry experts believe that could mean the beginning of the end of advertising on non-live, prerecorded shows, which count – by far – for the most hours of mass audience television. It would send shockwaves through the advertising industry and broadcasters would lose millions, if not billions, in revenue. After all, who is going to pay for expensive television commercials if consumers can easily skip them?
Despite the broadcasters’ efforts, many television and media experts think it is safe to say that – in the long run – this development is inevitable. The Hopper has illustrated that technology is catching up with existing television advertising models and copyright lawsuits will merely delay, not halt, a new, more advanced era of watching television: what you want, when you want it, where you want it. Dish has shown us that the current television models will no longer hold. As a result, existing broadcasters will need to innovate quickly and efficiently if they want to keep up with the technological advancements transmitters, competitors and consumers are taking advantage of.
The most logical solution for television networks might be to ‘saturate’ television shows with product placements and endorsements, instead of running separate advertisement slots. After all, even technology cannot ‘cut out’ those commercials. Although many countries, in particular European governments, are very reluctant to allow sponsored television, broadcasters are increasingly indicating advertisements in game shows and movies are necessary to make up for lost revenues. Otherwise, retransmission fees will rise and those costs will be ‘hopped on’ to the consumer. The competition from TV stations that operate solely online, the so-called ‘catch up’ services, movie websites as well as devices like The Hopper is simply too big. The District Court in Los Angeles is expected to make a decision in the next few weeks, so stay tuned for a case that may well change the face of television.
Michiel Willems © June 2012 CP Publishing
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