Sunday, June 24, 2012

Hop Right Over Those Commercials

Not since 1984 when the commercial networks tried to get a Federal Judge to declare illegal the use of the new Betamax tape machine have commercial TV networks been in such a twitter over the introduction of a new electronic gizmo. It seems that Dish, the satellite TV company, has a new product.  Called Hopper, the device is a digital video recorder on steroids.  According to the ads for Hopper it can record and store up to 2,000 hours of HD programs and record up to 6 shows at once.  It can be connected to up to four high definition televisions and play out different recorded programs to each one at the same time.

Hopper can automatically record all the programs in the entire primetime schedules of the major commercial networks and store the programs for up to eight days.  As of this writing the networks that can be recorded are ABC, CBS, NBC and Fox.  It would seem that all of these features would be embraced by the TV magnates.  A closer look at Hopper reveals that this new DVR can be set to skip all commercials.  While skipping commercials is not new to the digital recording world, the Hopper makes is so easy that the networks feel that none of their messages will be seen.

In late May CBS, Fox and NBC filed separate law suits in Los Angeles Federal District court.  The suits all accuse Dish of promoting to its customers the deletion of commercials and causing financial damage. The argument continues to contend that enabling people to watch time-shifted programs without commercials undermines the ability of the networks to offer the same shows through other commercial-free video services like DVD or Blu-Ray.  The suit states that allowing Dish and its customers to store programs indefinitely hurts the market for those shows in other distribution platforms.

The Dish executives counter that it is not Dish or Hopper that skips the commercials. The customer must activate the machine to perform that function.  You have heard that argument before “….guns don’t kill people…” 

This is only the latest in the battle between the status quo and new technology.  While the music industry tried to fight change, the fact is that it has been changed.  How people listen to music and buy (or don’t buy) music has changed.  Distribution channels restructured with the introduction of digital music storage and expansion of the Internet.  Television viewing, too, is now undergoing rapid and significant change.  More people than ever are abandoning “appointment viewing” and opting for time shifting or on-demand options via the web.  For the networks to fight against this new technology instead of looking for a new financial model that embraces it may lead to their demise.

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