For the past month, you may have seen programming
alerts on your television screen warning that Dish Network viewers will lose
their local NBC and ABC programming unless they contact Dish to complain.
The issue centered around a dispute between Dish
Network and Gannett Co., that owns ABC, CBS and NBC-affiliated stations in 19
cities, including WTLV and WJXX in Jacksonville.
The companies just settled this particular dispute
and Jacksonville Dish subscribers don’t have to worry about losing their
programming. But there could be a bigger issue lurking in the future.
Several news sources have reported that this dispute
centered on Gannett asking for increased fees to carry their stations. But as
leverage, Gannett wanted to include penalties on Dish because of their new
“AutoHop” feature on their Hopper digital video recorders that allows customers
to automatically skip commercials from the previous day’s broadcasts.
No details of the settlement were reported but there
are other pending lawsuits involving Dish and the other broadcast networks that
specifically addresses the ad-skipping feature.
As reported by David Kravets of Wired.Com, Fox, CBS
and NBC have filed federal suits against Dish claiming that the DVR’s service
breaches copyright law and transmission agreements. He says the networks are
labeling the practice a “bootleg” service that produces unauthorized copies of
their shows by recording programming that can be seen at a later date.
But the real issue here, according to the networks,
is that if the courts don’t block the service, it “will ultimately destroy the
advertising-supported ecosystem that provides consumers with the choice to
enjoy free over-the-air, varied, high-quality primetime broadcast programming.
Another development that is likely to muddy the
waters is that Apple was just granted a patent that will allow its users to
skip unwanted audio and video broadcast commercials when listening or viewing
content like songs, podcasts or other media, including Apple’s new TV
offerings.
As a television viewer, you might think it would be
great to skip through some of those loud and obnoxious car dealer spots or
embarrassing hospital commercials. But there is a great potential downside for
viewers, and more so for small businesses who rely on local broadcasts to help
advertise their products and services.
If a local TV station cannot deliver an audience,
specifically a targeted demographic, to an advertiser, then that station will
not be able to survive. And without the station, viewers will be without their
favorite network shows and their valued local programming.
Joe Arico, author of the article “Consequences of
Skipping Commercials” on Mobiledia.Com has an interesting take on what could
happen if technology like AutoHop threatens the traditional broadcast model,
which generates most of the profits and revenue for local broadcast stations.
Arico says if advertisers cannot reach viewers with
traditional commercials during programs, the networks may look at other
opportunities to reach potential customers. One example he describes is having
a favorite television character blatantly using or promoting commercial
products within the context of the show.
That already happens now, more in movies than TV,
under the practice called product placement. The best extreme example is
demonstrated in the movie, The Truman Show with Jim Carrey. Throughout the
show, various movie characters would go into product pitches constantly
confusing the movie’s central character, Truman.
The main point of using product placement in
television shows, means that regardless of how someone watches a show, recorded
or not, the product exposure is guaranteed.
Another way Arico believes networks could increase
their ratings and bypass DVR viewing is with more live programming. Studies show
programs that networks air live, such as the American Idol, The Voice and
sporting events, have better ratings and little DVR viewing.
He also believes the networks will place an emphasis
on even more live reality shows and decrease the amount of scripted shows they
produce. Reality TV is often inexpensive to produce and it performs just as
well as hour-long dramas and half-hour sitcoms.
With our new technology, everything is up in the air.
For added revenues, local stations are pushing their digital sites as strong as
their broadcast products. Live streaming; sites like Hulu; packages such as
Netflix; and others are also changing the viewing landscape.
Even with all of the technological changes, some
market analysts say that the ad-skipping feature might eat into just one
percent of advertising revenues and that maybe the broadcasters are overstating
their case.
But we have already seen the hemorrhaging of the
newspaper industry. We may just be seeing the beginning of the end of
traditional broadcast advertising, too.
