Skipping ads just got harder for DISH Network (NASDAQ: DISH ) customers. In a legal settlement finalized earlier this week, the satellite supplier agreed to limit features of its Hopper device for skipping ads while recording live TV broadcast via any of Walt Disney's (NYSE: DIS ) various networks. Fool contributor Tim Beyers explains the implications for the TV business in the following video.
Specifically, DISH said it will alter Hopper in such a way that users won't be able to skip ads for the first three days after live broadcast. Why? Because networks tend to sell ads against "live+3" ratings, including views of recorded shows.
Hopper's ad-skipping technology reduces the relevancy of such ratings, forcing marketers to consider other options. A bad outcome not only for Disney but also any broadcaster that depends on commercial interruptions for earning meaningful revenue. That the House of Mouse took DISH to court over Hopper is hardly surprising.
In fact, according to The Hollywood Reporter, the two companies had spent months negotiating a new retransmission deal for Disney's lineup, including ABC and ESPN. Tim says it's likely other networks will ask DISH for similar concessions.
For its part in the deal, DISH gets access to on-demand Disney programming in-home and on mobile devices. The two companies also said they plan to cooperate on developing new advertising models. Perhaps, Tim says. For now, the deal all but guarantees that the traditional TV business will be sticking around for a while.
Now it's your turn to weigh in. Do you like this deal? Are would you rather the industry work together on ways to change the TV business? Please watch the video to get Tim's full take and then leave a comment to let us know where you stand.
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