Dish reckons the legal action taken against its ad-skipping service only proves it's innovating in the right direction and is ahead of its time.
That's according to Charlie Ergen, the Dish supremo who told an AllThingsD conference in California that Dish was like Indiana Jones - always getting itself into impossible scrapes and then escaping at the last minute, and that objections to its AutoHop system are akin to Hollywood's fear of video tape which eventually proved hugely profitable once the studios had worked out how to make it pay.
AutoHop removes adverts from TV shows, but only those streamed from the Dish Primetime Anytime service which narrowcasts shows from a Dish cloud up to a week after broadcast, by agreement with the broadcaster. But the broadcasters didn't know Dish was planning to cut out the adverts, and objected in a case which Fox lost last November but is still pursuing.
That's fine, according to Ergen, because litigation shows Dish is heading in the right direction, and that advertising has to change:
"I don’t want to kill ads. I think advertising is great, and I’m very aware that there’s multiple revenue streams in television, subscription and advertising. But I also don’t want to put my head in the sand, and I think the world is changing."
Hopper is intended to deliver targeted adverts, rather than just cutting them out, but that's an idea which advertisers, and the TV networks, are having trouble adapting to so for the moment the ads are just skipped with a single tap on the remote.
PVRs routinely let viewers skip adverts, and in the UK BARB (the ratings agency) tracks that to the point that advertisers on, say, Sky, don't pay for the advert if the viewer doesn't watch it. Sky tells us that 70 per cent of viewers using Sky+ skip the adverts, but only a fifth of Sky viewing is time-shifted (the rest is live) and that tends to be additional, so for the moment the overall numbers remain about the same.
But AutoHop takes things a little further, as the viewer doesn't even see the ads on fastforward, and as time-shifted viewing gets more popular TV will have to find another way to fund itself.
Embedded advertising is one way (fancy some Highland Water after watching Dancing on Ice last Sunday?) but Ergen reckons targeted advertising is the way to go, and is pitching his Hopper box as the best way to deliver it. ®